Nigeria’s trade costs too high to attract investments –Okonjo-Iweala

From Juliana Taiwo-Obalonye, Abuja

Director General of the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala, yesterday told the Federal Government that Nigeria’s trade costs were too high to attract foreign investment, disclosing that the cost was equivalent of 306% tariff, one and half times higher than the cost in high income countries.

She made the declaration  via a video link  on the second day of the Mid-term Ministerial Performance Review at the presidential villa, Abuja, with President Muhammadu Buhari, ministers and other top government officials in attendance, where she stressed on the need to improve security to attract foreign and domestic investments.

According to her,  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.

The former minister of finance and coordinating minister of the economy, noted that 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.

“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%.”