The Director-General of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, says Nigeria needs to cut down its trade and infrastructure costs to attract more investments.
While speaking at the just concluded two-day Mid-term Ministerial Performance Review retreat, Okonjo-Iweala, also suggested a reduction of linkage and regulatory costs as well as Customs duties to encourage investments.
The WTO boss, who spoke to the retreat via a video link, observed that the country’s trade cost is higher than the cost in high-income countries.
She also stressed the need to improve security to attract foreign and domestic investments.
“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,” the WTO boss said.
“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 the 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 a 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,” Okonjo-Iweala added.