Sunday, 5 February 2017

HOW NIGERIA’S ECONOMY CAN GROW THROUGH LEVERAGING ON TRADE FACILITATION

Dr. Okechukwu Enelamah
Nigeria took a major step in its commitment to improve ease of doing business through trade facilitation on January 20 2017, when it submitted the instrument of acceptance of World Trade Organisation’s Protocol on Trade Facilitation Agreement (TFA) on the sideline of World Economic Forum in Davos, Switzerland.

Nigeria’s Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, submitted Nigeria’s instrument to the Director General of WTO, Roberto Azevêdo, at an event to mark the deposit. With this, Nigeria became the 107th WTO member state to ratify the agreement, while Nepal submitted its own instrument on January 26, 2017, thus needing just two more ratifications to reach the two-third threshold required for the TFA to come into force. Other African countries that have ratified include Botswana, Niger, Togo, Côte d’Ivoire, Kenya, Zambia, Lesotho, Mali, Senegal, Swaziland, Gabon, Ghana and Mozambique.

According to Dr. Enemalah, “Nigeria’s ratification of the Trade Facilitation Agreement is a reflection of our commitment to the WTO and a rules-based economy. It is evidence of President Muhammadu Buhari’s commitment to rapidly implement his presidential initiative on the creation of an enabling environment for business. Nigeria would like to see a strengthened WTO that reflects the development principles of developing countries like Nigeria.”

We believe that the minister and the Nigerian team worked tirelessly to push through the process, which I believe is another milestone for the country. This therefore positions the country on the right pedestal to harness expected gains of the TFA when it fully comes into force. TFA aligns with Nigeria’s objective of deepening the ease of doing business in the country through enabling policy environment.

Reactions continue to pour in since Nigeria submitted the Instrument to the WTO indicating that we are fully on board to harness immense opportunities offered by the protocol to global economy. Trade experts around the world see the ratification by Nigeria as an impressive step given her position in Africa as the continent’s largest economy.

Ease of Doing Business
President Muhammadu Buhari in October, 2016 approved the establishment of the Presidential Council on Ease of -Doing Business to further strengthen the administration’s resolve to enhance ease of doing business. And in addition to correct the perception that Nigeria is a tough environment to do business. This will attract the much-needed foreign direct investment and local direct investment in Nigeria. Trade facilitation is a tool for economic development, inclusive growth and job creation. It is also in tandem with the policy of diversifying the economy from oil.

The WTO’s General Council adopted the resolution on protocol on Trade Facilitation Agreement at its summit in November 2014 to address challenges posed by barriers and constrains to trade across the member-states by the customs services. WTO during its 20th anniversary noted thus: Under current border procedures, the average transaction can involve numerous steps. The Trade Facilitation Agreement (TFA) sets forth a series of measures for expeditiously moving goods across borders inspired by the best practices from around the world. The Agreement is ground-breaking in that, for the first time in WTO history, the commitments of developing and least-developed countries are linked to their capacity to implement the TFA. In addition, the Agreement states that assistance and support should be provided to help countries achieve that capacity.

An amendment protocol for the Trade Facilitation Agreement was adopted by the General Council in November 2014 to bring the TFA into the WTO’s legal framework. The Agreement will enter into force when two-thirds of WTO members ratify the TFA and deposit their instruments of acceptance with the WTO Secretariat. Hong Kong, China, became the first member to do so in December 2014.

Domestication
The protocol on TFA was ratified by Nigeria’s National Assembly and subsequently assented to by President Buhari. The process for its domestication by Nigeria began in 2014, when the country submitted its Category A notification to the WTO outlining substantive provisions of the TFA it intends to implement upon entry into force of the Agreement. Observers see this as a good sign that the country is ready to align her economic strategic obj ectives and goals with results.

The protocol on Trade Facilitation Agreement aims to ease the flow of goods across the borders through removing several barriers that inhibits movement of goods across borders. Developing and least developed countries are beneficiaries of the TFA as it supports them to overcome seamlessly, several barriers and constraints that affect import and export across their borders. The immediate impact is that ease of doing business will improve by a wide margin resulting in improved revenue, reduction in customs processes as well as income for producers and traders. The TFA protocol is expected to usher in an era of ease of doing business by shortening requirements for documentations and number of days required to process them.

A WTO publication, Easing Flow of Goods Across Border: Trade Facilitation Agreement published to mark its 20th anniversary, notes that as at 2014, customs transactions from country to country records the following requirements for export and import respectively. For export, there are between two to eleven documentations, which span from six days to eight-six days to be concluded. While for import transactions, two to 17 documentations are required which span from four days to 130 days before finalization. The protocol on Trade Facilitation Agreement aims to ease the flow of goods across the borders through removing several barriers that inhibits movement of goods across borders.

Nigeria will benefit immensely from TFA in terms of inflow of foreign direct investment, job creation, capacity utilization in view of emerging investment friendly policy framework it will usher in. The evolving opportunities through FDIs, technology transfer it creates in return would boost the economy. There is consensus among experts that the size of Nigeria’s market makes it the most lucrative investment destinations in sub-Sahara Africa with a high return on investment. Nigeria is an emerging market, which makes it one of the new frontiers for investment considerations.

The key thing Nigeria must do now is how to leverage on the TFA to grow her economy. There is no better time than now to explore the opportunities inherent in the WTO to grow our economy by positioning the country to reap benefits from other global pool of investments. Additionally, Nigerians still stands to gain from the export of its products to other countries within the WTO framework, which aims to increase opportunities for businesses in Nigeria. The recognition this brings to Nigeria to the world stage is immense. It could not have come at better time than now that every effort is geared towards increasing Nigeria’s share of non-oil revenue sectors of the economy. (Guardian)