The United Kingdom has urged Nigeria to accelerate its economic reforms by addressing harmful practices linked to state-owned enterprises that hinder trade and investment.
Simon Manley, the UK’s Permanent Representative to the World Trade Organization (WTO), made this call during Nigeria’s Trade Policy Review in Geneva on Monday.
Manley praised Nigeria’s progress in economic reforms but stressed the need for deeper and faster actions to create a business-friendly environment.
Manley commended Nigeria’s removal of fuel subsidies and improvements in monetary policy, describing these as bold and necessary steps.
However, he raised concerns about market-distorting practices by state-owned enterprises, particularly in key sectors like energy, noting that such practices stifle competition and discourage private sector participation.
He noted that as of 2022, about 40 state-owned enterprises were reportedly involved in practices that negatively impacted the business environment.
British businesses raise concerns over regulatory barriers
Manley highlighted feedback from British investors in Nigeria, pointing to issues such as harmful subsidies, forced technology transfers, discriminatory enforcement of competition policies, and complex regulatory frameworks. He emphasized that addressing these barriers would not only boost investor confidence but also enhance Nigeria’s trade performance and economic prosperity.
He said: “There are concerns around the impact of state-owned enterprises on the business environment. As the Secretariat noted in its report, as of 2022 around 40 state-owned enterprises were operating in key sectors like energy. These state-owned enterprises, to be honest, often employ market-distorting practices and benefit from unfair competition in our view.
“Other concerns that British businesses investing in Nigeria have raised include examples of harmful subsidies, forced technology transfer, discriminatory enforcement of competition policy and of complex regulatory barriers. And we have indeed picked up on some of those issues and concerns in our Advanced Written Questions.
“So, we would encourage our Nigerian colleagues to address these harmful practices in order to boost investment, boost trade, improve its business environment and ultimately increase Nigerian prosperity.”
The UK representative emphasized the importance of the recently signed UK-Nigeria Strategic Partnership, which aims to identify mutual growth opportunities and reduce trade barriers.
He acknowledged Nigeria’s increasing trade diversification, with manufacturing and agriculture becoming more prominent contributors to the economy. He also praised the country’s infrastructure investments in energy, housing, and transport, which have supported economic growth.
On AfCFTA and the digital economy
The African Continental Free Trade Agreement (AfCFTA) was recognized as a pivotal development for Nigeria’s trade landscape. Manley commended Nigeria for its progress under the AfCFTA, including its participation in the Guided Trade Initiative. He noted that implementing the Digital Trade Protocol could significantly reduce trade costs and unlock the potential of Nigeria’s digital economy.
He said: “According to the joint World Bank-WTO Policy Note last year on digital trade in Africa, if African countries were to improve their digital regulatory environment to that of the best on the continent, trade costs could fall by 17% in goods and 25% in business and professional services. So, we look forward to Nigeria implementing that Digital Trade Protocol to the benefit of its businesses, its consumers and its future growth.”
Manley also highlighted the UK’s support for the Nigeria AfCFTA Coordination Office, which has facilitated the country’s engagement with the agreement.
He shared an inspiring example of Madam Chinwe Izenwa, a 73-year-old Nigerian entrepreneur and the first to use AfCFTA’s Guided Trade Initiative, as a testament to Nigeria’s strides in women’s economic empowerment.
Manley further lauded Nigeria’s proactive role within the WTO, from dispute settlement to plurilateral negotiations on e-commerce and investment facilitation.
He expressed hope that Nigeria would become one of the founding parties to the WTO’s e-commerce agreement, given its pivotal role in shaping a balanced and inclusive global trade framework.
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