On Monday, the world woke to news that Nigeria’s Former Minister for Finance, Ngozi Okonjo-Iweala has been appointed Director-General of the World Trade Organisation, making her the first woman and African to hold the position.
The World Trade Organisation (WTO) is an intergovernmental organization responsible for global rules of trade between nations in order to enhance free movement of goods and services and has been in existence since January 1, 1995.
International trade is vital for the expansion of a country’s economy as it encourages the development of markets simultaneously creating employment, while addressing the risks of national monopolies.
Nigeria is one of Africa’s largest economies and a leader in crude oil exports. As we anticipate direction of Ngozi Okonjo-Iweala leadership at the helm of the world’s largest trade organisation, Legal Business takes a look at Nigeria’s key international trade policies.
World Trade Organisation
Nigeria is a member of the World Trade Organisation (WTO) and has been since inception and is a signatory to several agreements by the WTO including Trade Related Investment Measures (TRIMS), Trade Related ATrade Related Aspects of Intellectual Property Rights (TRIPS), General Agreement on Tariffs and Trade (GATT), and General Agreement on Trade in Services (GATS)
African Growth and Opportunity Act (AGOA)
The African Growth and Opportunity Act (AGOA) is a United States Trade Act enacted on 18th May 2000 to create market access for products of sub-Saharan origin to the USA. Member states of the AGOA can provide duty-free access for eligible products to the USA and have competitive tariff advantage over non-AGOA countries. AGOA is currently in force until 2025 and covers agricultural products, apparel and footwear, motor vehicle components, chemicals, wine, and steel
Joint Declaration on Cooperation with the European Free Trade Area
The Joint Declaration on Cooperation (JDC), signed on 12 December 2017 between European Free Trade Association states (EFTA) and Nigeria was created to address cooperation on trade-related issues such as exchange of information on trade in goods and services, customs and origin matters, technical barriers to trade, intellectual property rights, public procurement markets, competition, and trade and sustainable development.
Global System of Trade Preferences among Developing Countries (GSTP)
The GSTP is a preferential trade agreement signed on 13 April 1988 with the aim of increasing trade between developing countries in the framework of the United nations conference on trade and development. It entered into force on 19 April 1989 and its notification to the WTO was on 25 September 1989. Nigeria became a signatory during the third Round of Trade Negotiations (São Paulo Round) concluded in December 2010, which is yet become effective.
Economic Community of West African States (ECOWAS)
The union was established on 28 May 1975, with the signing of the Treaty of Lagos with its stated mission to promote economic integration across the region. A revised version of the treaty was agreed and signed on 24 July 1993 in Cotonou. Considered one of the pillar regional blocs of the continent-wide African Economic Community (AEC), the stated goal of ECOWAS is to achieve “collective self-sufficiency” for its member states by creating a single large trade bloc by building a full economic and trading union.
ECOWAS Trade Liberalization Scheme
ECOWAS Trade Liberalization Scheme (ETLS) is a trade instrument designed by the Economic Community of West African States (ECOWAS). The scheme offers unhindered market access to the fifteen member Countries and promotes economic relations within the sub-region. Countries covered by the Scheme are; Nigeria, Ghana, Benin, Côte d’Ivoire, Gambia, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Senegal, Sierra Leone, Togo, Burkina Faso, Cape Verde. The ETLS guarantees free movement of goods and persons between member countries; No quantitative restrictions; Total exemption from import duties and taxes, and Non-payment of compensation for loss of revenue for items (ii) and (iii) as a result of their importation
African Continental Free Trade Agreement (AfCFTA)
The AfCFTA is a free trade area founded in 2018, with trade commenced as of 1 January 2021. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations. The free trade area is the largest in the world in terms of the number of participating countries since the formation of the WTO. The agreement was brokered by the AU and was signed on by 44 of its 55 member states in Kigali Rwanda on March 21, 2018. The general objectives of the agreement are to:
• create a single market, deepening the economic integration of the continent
• establish a liberalised market through multiple rounds of negotiations
• aid the movement of capital and people, facilitating investment
• move towards the establishment of a future continental customs union
• achieve sustainable and inclusive socioeconomic development, gender equality and structural transformations within member states
• enhance competitiveness of member states within Africa and in the global market
• encourage industrial development through diversification and regional value chain development, agricultural development and food security
• resolve challenges of multiple and overlapping memberships
President Buhari signed the AfCFTA in July 2020 and it was ratified in November 2020.
Nigeria has bilateral investment agreements with 31 countries, 15 of which, are in force. These countries include India, China and the United States amongst others.