The Director General of the World Trade Organization (WTO), Dr Ngozi Okonjo-Iweala, has said Nigeria’s trade is too high to attract investment.
Dr Okonjo-Iweala, who was a former Minister of Finance and Coordinating Minister of Economy under the administration of former President Goodluck Jonathan stated this via a video link on the second day of the Mid-term Ministerial Performance Review at the presidential villa, Abuja.
She further spoke of the need to improve the nation’s security in order to attract foreign and domestic investments, Vanguard reported.
The WTO DG said the country must cut down not only on trade cost but also infrastructure cost, linkage cost, regulatory cost, customs cost, and all costs associated with moving goods from the factory to the final consumer to complement investment facilitation.
She pointed out that Nigeria’s trade cost was equivalent to 306 per cent tariff, one and half times higher than the cost in high-income countries.
According to her, congestion, capacity constraints and high costs at Nigerian ports do not encourage investment as they make it difficult to build supply chain operations in the country.
She said: “Improving security and lowering transaction cost for foreign investment, even for domestic investment, would be necessary. And Nigeria is part of a group of countries negotiating an agreement on investment facilitation at the WTO.
“Once this agreement is negotiated, ratified and is being implemented, it could be instrumental in attracting additional trade-oriented investment.
“To complement investment facilitation, Nigeria has to cut down on trade cost, infrastructure cost, linkage cost, regulatory cost, customs cost, basically, all costs associated with moving goods from tie factory or farm gate to the final consumer.
“Nigeria’s trade costs are too high. According to the World Bank-ESCAP trade costs for 2019, trade costs for African countries are on average equivalent of a 304% tariff and for Nigeria, it’s even slightly higher at 306%.
“These numbers are one and half times higher than trade cost in high-income countries. Such high costs are not conducive to forming regional value chain.
“Congestion, capacity constraints and high costs in our ports make life difficult for anyone seeking to build supply chain operations in Nigeria and hence, expand trade from there.”