Nigeria's Import and Export Policies and Trade protection
аспирант кафедры «Маркетинг», Российский университет дружбы народов (Россия, г. Москва, ул. Миклу-хо Маклая, 6; e-mail: firstname.lastname@example.org)
Аннотация. Нигерия - самая густонаселенная страна с изобилием природных ресурсов, но нефть - основной источник экспортных доходов страны. Нигерия является активным участником международной торговли и является членом-учредителем ВТО с 1995. Часть импортной и экспортной политики связана с тарифами, запретом на импорт и имеет размеры, чтобы поощрить экспортирование. Однако при этом, еще требуется усилить эту политику, для того, чтобы способствовать экспорту сельскохозяйственной продукци.
Abstract. Nigeria is Africa most populous country with abundance of natural resources, but petroleum is the country's major source of income and export commodity. The country's is active in international trade and was a founding member of WTO in 1995. Some of the import and export policies borders on tariffs, import prohibition and measures to encourage exportation. A lot is still required to strengthen these policies so as to promote the exportation of Agricultural produce.
Ключевые слова: Нигерия, экспорт, импорт, ВТО, субсидия.
Keywords: Nigeria, export, import, WTO, subsidy.
Nigeria is the United States largest trading partner in Sub-Saharan Africa and supplies a fifth of it's oil (11% of oil imports). It has the seventh largest trade surplus with the US and 50th largest export market for US goods and the 14th largest exporter of goods to US1. Nigeria major international export partners are shown in figure 1. Export in Nigeria is reported by the Central Bank of Nigeria to have increased to 7.08USD Billion in June 2013 from 7.06 USD Billion in May 2013. Average export between 2002 and 2013 is put at 5.1 USD Billion. Outside petroleum other products commonly exported are: Cocoa beans and products, palm kernels and products, rubber and groundnut. Major imports are food, live animals, beverages, tobacco, animal, vegetable fats and oil, inedible crude materials, mineral fuels, chemicals, manufactured goods, machinery and transport equipment1 Nigeria also import Arms and military equipment's from Britain, Italy, United state, France, Russia and Germany. Most household commodities are imported from China.
The Word Trade Organization (WTO) is an organization comprising of developed and developing countries unified by international trade but with different needs and objectives which are safe guided by the respective member countries trade policy. Some of the developed countries want to retain protectionism on farm subsidies to domestic agriculture practise which do not augur well with developing countries. The US subsidies to cotton farmers is about 3 times US foreign aids to all African countries.
This type of subsidies make it difficult for farmers in developing countries to compete with them in international trade. The American 'origin restriction' which stipulate that exports to US must be based on products from US rather than their competitors if removed will accrues benefit worth $420million to Africa according to IMF. The Developing countries on the other hand push for the international liberation of fair trade on agricultural products.
Trade policy of WTO member countries is taken seriously and reviewed regularly to measure
the commitments of members to the policies, WTO rules and to provide information on new market opportunities. The WTO reviews the trade policies of the world's four largest traders (the European Union, the United States, Japan, and Canada) once every two years, the policies of the 16 next largest traders once every four years, and the policies of all other traders once every six or more years. After extensive consultations with the member country under review, the WTO Secretariat publishes its review together with2 a companion report by the country's government2.
Nigeria had had issues with WTO over import prohibitions. In 1996 WTO committee on balance of payment ruled that Nigeria's reason for import prohibition could not be justified. The Government promise to eliminate such measures by 1997 did not hold and a proposal was made for an 8 years3 plan to phase out all import prohibitions by 20053. It's however not clear if all the items currently on import prohibition list by Nigeria Government are ratified by WTO.
NIGERIA IMPORTS AND EXPORT POLICIES
Importation and exportation of goods in Nigeria is mostly influenced by the rules and regulations of Nigeria custom service. The custom duties Act of 1958 has a provision for the level of special duty on any good seen to be dumped in the country. The Act defines dumping as when the export price of goods are lower than the 'fair market price'. There is no any other notification made to WTO on antidumping since 1998, there is however mention of the need to protect local industries from unfair competition within the frame work of WTO in the 2004 budget statement. A bill on anti-dumping4and countervailing measure is under consideration4.
WTO Trade Policy Review on Nigeria June 1998
Oyejide, T.A, Ogunkola, E.O, Jereny A, Adenikinju, A and Bankole A.S (2003).
4 Trade Policies and Practices by measure-World Trade Organization (www.wto.org/english_eltpr_e/tp75_e.htm)
Экономика и предпринимательство, № 6 (ч.1), 2015 г.
Figure 1: Nigeria -Export-Million US $
Source: Merchant Trade Matrix, Impors and Exports
Structure of the MFN tariffs, 1997/98-03 (Per cent)_
1997/98 1999/00 2001 2002 2003 U.R.a
1. Bound tariff lines (% of all tariff lines) 19.2 19.2 19.2 19.2 19.2 19.2
2. Duty-free tariff lines (% of all tariff lines) 0.2 0.2 0.2 0.0 0.0 0.0
3. Non-ad valorem tariffs (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 0.0
4. Tariff quotas (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 0.0
5. Non-ad valorem tariffs with no AVEs (% of all tariff lines) 0.0 0.0 0.0 0.0 0.0 0.0
6. Simple average tariff rate 24.4 26.0 26.0 29.0 28.6 118.4
Agricultural products (WTO definition)0 32.8 32.1 32.1 50.4 50.2 150.0
Non-agricultural products (WTO definition)c 23.1 25.1 25.1 25.8 25.3 49.2
Agriculture, hunting, forestry and fishing (ISIC, Div. 1) 26.7 26.3 26.7 41.5 41.4 150.0
Mining and quarrying (ISIC, Div. 2) 18.3 18.4 18.4 18.4 17.9 n.a.
Manufacturing (ISIC, Div. 3) 24.4 26.1 26.2 28.5 28.0 109.1
7. Domestic tariff "spikes" (% of all tariff lines)0 0.5 0.5 0.5 5.2 5.0 0.0
8. International tariff "spikes" (% of all tariff lines)e 51.6 57.9 57.9 57.4 56.5 100.0
9. Overall standard deviation of applied rates 18.0 14.6 14.5 22.0 22.3 47.4
10. "Nuisance" applied rates (% of all tariff lines)' 0.0 0.0 0.0 0.0 0.0 0.0
n.a. Not applicable.
a Based on the total number of bound tariff lines.
b WTO Agreement on Agriculture.
c Exclude petroleum.
d Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate (indicator 7).
e International tariff peaks are defined as those exceeding 15%.
f Nuisance rates are those greater than zero, but less than or equal to 2%. Source: WTO Secretariat calculations, based on data provided by the Nigerian authorities.
Nigeria uses the HS 1996 at the eight-digit level. Its 2003 applied MFN tariff had 5,146 lines. Final bound tariffs range from 40% on aluminium alloys and machinery, to 150% on vegetable products, fats and oils, and prepared food. The average bound tariff rate is 118.4%, and the coefficient of variation is 0.40.Additional duties applying only to imports include: Port development level of 7% of the duties payable, an ECOWAS community level of 0.5%1. Import duties generally varies from 0% to 35% with average at 16.96%. Some products like books are duty free while import duty on some products like cigarette is very high at 50% to 100%2. Import duty on rice is 110%, the federal government is considering reducing the tariff to curb smuggling from neighbour3ing countries which have import duty on rice at 10%3. Below is the structure of the MFN tariffs from 1997 to 2003.
Trade Policies and Practices by measure-World Trade Organization (www.wto.org/english_eltpr_e/tp75_e.htm)
3 Nigeria: New Policy on Rice Importation (allafrica.com)
Value Added Tax (VAT)
Decree no 102 of 1993 stipulates VAT of 5% calculated as duty- inclusive (c.i.f) on goods produced in the country and on imported goods, except on goods on the exclusion list.
In January 2002, Nigeria notified the WTO committee on safe guards that import prohibitions on wheat flour, sorghum, millet and kaolin where in place. The process of enacting a legislation on safe guard is on-going.
Rules of origin
The Nigeria Customs duty Act specifies the rule of origin as goods considered originating from a country if they are wholly produced in that country or if value added during production is at 75%. ECOWAS rules of origin also applies which specify that a good has community origin, if 60% of the raw material used is from a member state of ECOWAS (Economic Community of West African States). Or if value added is at least 35% of cost price.
Journal of Economy and entrepreneurship, Vol. 9, Nom. 6-1
Export taxes, charges and levies
The export amendment decree of 1992 prescribes that all raw material or unprocessed commodities, whether mineral or agricultural, may be subject to the payment of an export levy as may be prescribed, from time to time, by order of the NEPC. In this respect, an administrative levy of US$5 per tonne is applied to exports of cocoa, and1 of US$3 per tonne to exports of other raw materials1.
Import prohibition in Nigeria is aimed primarily at protecting local manufacturers. This has started since the early 1970s with importation ban on textile and clothing products. Importation ban on prod