TRADE POLICY REVIEW OF NIGERIA 13 –15 JUNE 2017 OPENING STATEMENT BY AMBASSADOR CHIEDU OSAKWE TRADE ADVISER, NIGERIA
On behalf of the Nigerian Delegation, thank for convening this meeting of the Trade Policy Review Body (TPRB) for Nigeria’s 5th Trade Policy Review. I speak for the record, so a Note of thanks.
For the record, I should add that Dr. Okechukwu Enelamah, Honourable Minister for Industry, Trade and Investment of Nigeria, should have led the Nigerian Delegation to this Trade Policy Review. Minister Enelamah, however, is in Berlin, representing President Buhari at the G20 Leaders outreach with Africa.
On behalf of my colleagues here in the Nigerian Delegation, I would like to thank all WTO Members who are gathered here today to participate in Nigeria’s Trade Policy Review. Let me acknowledge the presence in the Nigerian Delegation of H.E. Ambassador Audu KADIRI, Nigeria’s new Permanent Representative to the United Nations and Other International Organizations in Geneva (UNOG); and, Mr. Audu Suleman, the Chargé d’Affaires, at the Nigerian Trade Office to the WTO, who has worked very hard on the process and substance, with the Nigerian Team, on this Nigeria’s 5th Trade Policy review.
As we start, well beyond this Delegation, the Federal Government of Nigeria (FGN) pays tribute to WTO Director-General Roberto Azevedo for his strong leadership of our Organization, and for steering the WTO in the right direction, particularly in a period of challenge, uncertainty and fragility in the global economy. What happens in the WTO and what the WTO does, matters, massively because the WTO remains an indispensable public good, a major player for global economic governance and the primary forum for international trade cooperation. Director-General Azevedo, his Top and Senior Management continue to enjoy the confidence and support of the FGN. Nigeria is honoured and grateful that Ambassador Yee Woan, Permanent Representative of Singapore to the WTO, is the discussant for Nigeria’s Trade Policy Review. The standards, achievements and example of Singapore in the global economy, reflect best practices to which Nigeria aspire.
On a personal note, I am pleased to see many friends and colleagues of mine gathered here today all around this room. The Delegation looks forward to your engagement as we review Nigeria’s Trade Policy. The TPR is one of the healthiest and most constructive exercise in the WTO, in process and substance.
The Fifth Trade Policy Review of Nigeria comes at the right moment by pure coincidence. The Nigerian Delegation is neither here for a perfunctory ritual, spaced out over 6/7 year intervals, nor is the delegation here in a defensive trade policy exercise. No, that is not the reason we are here. Nigeria is here to engage and signal that there must be neither mistake nor ambiguity about the direction in which Nigeria is headed. Nigeria is approaching this Trade Policy Review as Acceding Governments approach the domestic economic and trade policy reforms associated with the WTO accession process. Like the accession process, Nigeria attaches importance to the TPR process as an instrument and platform for structural reforms.
What is the context in which Nigeria has approached this exercise? In 2014, Nigeria suffered, painfully, an exogenous shock triggered by the end of the Commodity supercycle. This was caused by the collapse of oil prices, which resulted in the 60% loss of external receipts for Nigeria with strong negative effects for the BOP and external reserves. The exogenous shock, combined with endogenous shocks from unsustainable subsidies to the oil sector, corruption and serious governance weaknesses. The net effect was that the bottom fell out with the slide into recession in 2016. The clear signals transmitted by the market was that Nigeria must reform or decline. Nigerians chose the former. This was the context in which Mr. Buhari was elected as President of the Federal Republic of Nigeria, on 29th May, 2015, to implement an agenda for change, reform and structural transformation to diversify and modernize the largest economy on the African continent. There are no illusions about the magnitude and scale of the challenge, but the Nigerian Delegation here confirms that the business of change and reform is strongly underway. We also confirm that President Buhari and Vice President Yemi Osinbajo shall not be deterred from the goal of implementation of a domestic agenda for economic and trade policy reform and structural transformation. And the Delegation is pleased to report that reforms underway are generating positive results in improved processes, sound policies, re-structuring and institution-building.
This is why the Nigerian Delegation is here, as a Team of Reformers in Government – not a bunch of bureaucrats – because Nigeria considers that this 5th Trade Policy Review is not only necessary, but provides an opportunity to communicate the changes underway in Nigeria’s economic and trade policy direction. Also, Nigeria is hopeful that WTO Members in this Trade Policy Review Board will use this TPR as an opportunity to support Nigeria’s serious and far-reaching domestic policy reforms which are on-going. Nigeria sees this 5th Trade Policy Review exercise as one of the effective instruments for building a stronger win-win partnership with its trading partners and a platform for modernizing and updating Nigeria’s trade integration a fast-paced 21st Century 24-hour global economy.
The Government has initiated far-reaching reforms; reforms that are work in progress. The macro-economic setting is the Economic Recovery and Growth Plan (ERGP) launched on 5thApril, 2017, by H.E. President Buhari. Details are in the Government of Nigeria Report. The plan sets the foundation for the structural transformation, diversification and competitiveness of the Nigerian economy, on the basis of a market economy, driven by the private sector and with public-private partnerships, where necessary, such as in the areas of infrastructure and public utilities. Essentially, the Plan is focused on 5 priority areas namely: i) agricultural transformation for food security; ii) energy sufficiency in power and petroleum products; iii) transportation infrastructure; iv) industrialization with focus on SMEs, and v) stabilizing the macroeconomic environment.
To establish the context for our more specific exchanges and the Q and A, let me, briefly, point to a few selected areas of domestic and structural policy reforms.
From Nigeria’s recent economic crisis and recession, Nigeria has learned that a coordination deficit in domestic economic policy-making carries a high risk for growth and development. This coordination deficit cost the Nigerian economy during the last decades. Part of the reforms underway, is systematic and institutional introduction of greater coherence in fiscal, monetary and structural reform policies. The purpose of this is to restore market confidence, robust and sustained growth, take account of WTO-consistency questions and, in so doing, be mindful that the effects of Nigeria’s economic and trade policies are mutually welfare-enhancing, creating win-win outcomes and, strengthen the rules-based global economy. The coherence objective is being implemented in the Economic Management Team (EMT) chaired by H.E Professor Yemi Osinbajo, GCON, SAN, Vice President of the Federal Republic of Nigeria, and comprised of the Ministers involved in economic policy-making. The weekly meeting of the EMT is supported by a Technical Team of Special Advisers.
Trade Policy and Negotiations:
The ERGP identifies trade policy as an engine for competitiveness and growth. Currently, trade accounts for 19% of GDP, second only to agriculture at 26%. Trade (imports and exports) accounts for approximately 1.2 million jobs. In trade negotiations, several of which are underway, with others on the threshold of negotiations, the objective is for market access expansion for growth in the economy. In the delegation today, I am pleased that we have with us Dr. Yemi Kale, Nigerian’s Statistician-General. We are attaching greater premium to a solid, de-politicized statistical foundation in Nigeria’s trade policy. The National Bureau of Statistics (NBS) collects and reports on trade data more systematically.
This Trade Policy Review provides an opportunity to report the overhaul underway of the institutional infrastructure for the conduct and management of Nigerian Trade Policy and Negotiations. On 10th May, the Nigerian Federal Executive Council (FEC) approved the establishment of the “Nigerian Office for Trade Negotiations” (NOTN) to coordinate and lead on all of Nigeria’s trade negotiations and contribute to coherence in trade, monetary, fiscal and structural reform policies. The NOTN is being set-up. It shall be headed by an Ambassador, Trade Adviser and Chief Negotiator for Nigeria. As the establishment of the NOTN will be based on world class standards, Nigeria will be consulting with many of you as the Office is established.
As Nigeria takes trade policy and negotiations more seriously than ever, more time and energy are being invested in the negotiations for the establishment of the Continental Free Trade Area for Africa (CFTA). Last week, in Niamey, Nigeria was elected as Chair of the CFTA Negotiating Forum to provide leadership to drive these negotiations to conclusion next year; and, the objective is to establish an integrated African market for trade in goods and services.
On the more specific range of Members’ concerns since the last review, Nigeria has acted to address some of these concerns. For instance, the Federal Government has lifted the restrictions on 36 raw materials that were part of the 41 listed items that could not access foreign exchange (hard currency) at the official exchange rates. The removal of these restrictions on the remaining items is work in progress and shall continue, as the external reserve situation ameliorates and improves.
Ease of Doing Business and Trade Facilitation:
The Presidential initiative on the Ease of Doing Business is the signature statement and test of President Buhari’s Administration to tackle the institutional and systemic challenges of doing business in Nigeria. With Cabinet Ministers and Agency Heads, the Administration is determined that it shall not be business as usual in Nigeria. The Presidential Enabling Business Environment Council is chaired and driven by Vice President Professor Osinbajo and Dr. Oduwole, the Secretary. The Secretariat is housed in the Nigerian Investment Promotion Commission, headed by Ms. Yewande Sadiku, who is here with us today. Carefully recruited reform champions are implementing robust measures to transform the environment in which business is done in Nigeria across several key areas: transparency; default approvals; One Government; travelers’ entry into and exit from Nigeria; and, Port Operations. These reforms are institutionalized in the Presidential Executive Order 01 on the Ease of Doing Business, signed recently by Acting President Yemi Osinbajo. The implementation will reinforce the gains from the WTO Trade Facilitation Agreement. Beyond the notification of its category A commitments, Nigeria recently notified its Category B and C commitments, which is being processed by the WTO Secretariat for circulation to all Members. Nigeria considers the WTO Trade Facilitation Agreement, a key aspect of the development agenda of the rules-based Multilateral Trading System, which requires companion domestic policy reform such as the Nigerian Presidential Initiative on an Enabling Business Environment.
A major part of creating jobs will be solved by developing a manufacturing base, where “stuff” is made, that is part of the regional, continental and global supply and value chains. Any economy “must make things and create value” and in doing so generates network effects. In these conditions, job opportunities are created. To support these objectives, Special Economic Zones (SEZs) are being created. To be clear and to avoid misinterpretation, the logic of the SEZs is to stimulate efficiency in industrial hubs in the face of an economy with a magnified dimension of the classical problem of economics: infinite demands and finite resources. More recently, on 30th May, the “Nigerian Industrial Policy and Competitiveness Advisory Council” was inaugurated, with a huge component of the Nigerian private sector, to advise and drive an industrial strategy, based on innovation, creativity and enterprise to ensure competitiveness (and also, prevent moral hazards and market failures).
The digital economy:
The 21st Century is defined by the digital economy. Nigeria harbours no illusions about its challenges and complexities, but we are committed to working to harvest its opportunities. Being defensive or evasive about the digital economy is not an option. A Smart Nigeria Digital Economy Project is under advanced policy development. The key policy components have been identified in the questions from Members already answered. They range across a 100% broadband coverage of Nigeria; e-commerce development by supporting the operators in the real sector; using technology to create a platform for the integration of Small and Medium Enterprises into regional, continental and global markets; development of digital payment infrastructures; capacity-building and training of software engineers and coders; e-government; digitizing data across sectors; to, cyber security, etc. A lot of this work is underway. This work is exciting. The young in the economy are fired up. Nigeria believes that this is an area where the WTO urgently needs to work and move ahead rapidly. As you already know, Nigeria is championing this agenda in the WTO as a member of Friends of E-Commerce for Development (FEDs); and, co-sponsoring proposals with Singapore and several others. Nigeria is carefully examining the EU proposal on online transactions, positively, and shall revert, soon. The digital economy agenda should not be held hostage to other issues. Nigeria shall push harder in this area.
The digital economy:
Trade and investment are two sides of the same coin. They are inseparable in policy and practice. Nigeria is working to focus its investment promotion efforts not only to encourage wealthy Nigerians to invest in direct opportunities in their own country, but to target FDI from countries with which, amongst other considerations, we actively trade. The Ms. Sadiku, the Head of Nigeria’s Investment Promotion Commission (NIPC) is with the Delegation today. Nigeria’s trade negotiations will be linked to investment opportunities and access to Nigeria’s markets.
Domestic Resource Mobilization (tax policy):
Tax policy is being overhauled. Nigeria’s tax to GDP ratio is 6% versus the average of 30% for developing countries; one of the lowest in the world. A new policy is being implemented to improve tax collection and hence domestic resource mobilization. This will create efficiencies and spur individuals to invest in public policy and ensure that government is accountable. All Nigerians who earn an income should pay taxes so they can hold Nigerian Governments accountable.
Broadly, this is the context for Nigeria’s trade policy review, 6 years after the last. The context is one of reform, change and transformation. This is why Nigeria very much welcomes the engagement by Members which we consider very positive as reflected in the  questions from  Members. Nigeria asks that you sustain this engagement and dialogue. Please, keep the questions and comments coming, well after this exercise. It will strengthen the Nigerian economy and ensure its competitiveness. In Nigeria, President Buhari’s Government is strongly committed to building a modern welfare-enhancing economy that is integrated into the regional, continental and global economy. There are policy shifts that Nigeria delayed for far-too long, which are now being corrected, at this time, through policy reforms, re-structuring and institutional adjustments.
Nigeria seeks a balanced, win-win relationship with its WTO Member partners on the basis of a modern, updated 21st global economy in dynamic transformation and fast-paced technological evolution. The Government is implementing bold policy changes and measures to ensure that it shall not be stuck in the past. The objective is for intensive engagement in a manner that reflects policy and technological realities, innovation, creativity and enterprise, in a market economy where firms can enter and exit on the basis of competitiveness. On 18 November 1960, (a little over a month after independence) Nigeria committed to the rules-based global economy by acceding to the GATT ‘47. In 1995, Nigeria reaffirmed this commitment with original membership of the WTO. In February, this year, Nigeria was part of the original membership of the TFA and the Amendment to the TRIPS Agreement.
As Members also know, Nigeria is championing an updated and modernized agenda for trade policy and negotiations here at the WTO, including robust implementation of agreements already reached in Hong Kong, Bali and Nairobi. Nigeria wants to see a WTO that is constantly updating its rule-book and delivering solutions that contribute to growth. This is an indispensable Organization. If it did not exist, economies would band together to create it.
Finally, Nigeria would like to see a WTO that supports the domestic policy and structural reforms of countries like Nigeria; according to which trade would serve a development agenda that spurs growth, creates jobs, reduces poverty and, to quote the WTO Director-General “contributes to peace, security and solidarity amongst countries”. This is Nigeria’s message at its 5th Trade Policy Review. Work with Nigeria and you will not be disappointed. Africa’s largest economy is pulling on all the stops and starting to pump on all pistons.
As I conclude, let me thank Willy, Jacques, Mena and Xinyi Li, for the stellar work in preparing for this review. The quality of staff and output by the WTO Secretariat are without doubt second to none amongst the Secretariats in other international Organizations. Nigeria appreciates the work that you have done.