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V. AID FOR TRADE

(1) MAINSTREAMING TRADE INTO THE NATIONAL DEVELOPMENT STRATEGY

(i) Mainstreaming at the policy level

1. Nigeria's Vision 20:2020 provides the framework for the national development strategy,
which focuses on the diversification of the economy away from oil. The objective of Vision 20:2020
is to place Nigeria among the top 20 economies in the world by the year 2020. Among the core
elements of the strategy is the modernization of agriculture, rehabilitation of infrastructure, and
development of the power sector.

2. Vision 20:2020 is being implemented through three medium-term development plans. In the
first, the National Implementation Plan (2010-2013), four thematic areas were identified: physical
infrastructure; productive sector; human development; and the development of a knowledge-based
economy. The productive sector thematic area covers seven subsectors: agriculture and food
security; oil and gas; manufacturing; small and medium enterprises; solid mineral and steel
development; culture and tourism; and trade and commerce. These subsectors have been identified as
drivers of GDP growth of 11% per year for the 2010-13 period as envisaged by the Plan.1

3. Prior to Vision 20:2020, trade had been recognized in the National Economic Empowerment
and Development Strategy (NEEDS) as critical for economic development. 2 Under Vision 20:2020,
various strategies and initiatives have been identified to support the mainstreaming of trade into the
national development strategy. The overarching aims have been to support the growth of non-oil
exports, to increase utilization of preferential trade arrangements and to strengthen Nigeria's
participation in international trade negotiations. Specific sectoral priorities and targets have been
identified in the National Implementation Plan and, to a large extent, donor support has been aligned
to these priorities.

(ii) Mainstreaming at the government-donor partnership level

4. Few bilateral donor agencies operate in Nigeria. The main donors are the World Bank, the
United States Agency for International Development (USAID), the U.K. Department for International
Development (DFID), the African Development Bank (AfDB) and the European Union. These five
donors account for over 80% of annual development assistance to Nigeria. 3 In 2009, the World Bank,
USAID, DFID and the AfDB agreed to a common single Country Partnership Strategy (CPS) in order
to better coordinate their activities and to increase the effectiveness of their support. There is also
close coordination with other donors, including the Canadian Development Agencies (CIDA),
Japanese International Co-operation Agency (JICA), the French Agency for International Co-
operation, and the United Nations, some of which are expected to join the partnership during the
period of implementation.

1
Government of Nigeria (2009).
2
During 2004-07, Nigeria's national development strategy was anchored on the National Economic
Empowerment and Development Strategy (NEEDS), which focused on three priority areas: (i) improved
services delivery for human development, (ii) improved environment and services for non-oil growth, and
(iii) enhanced transparency and accountability for better governance. Based on the NEEDS framework, the
Government introduced the Seven-Point Agenda in 2007, focusing on: (i) energy emergency; (ii) agriculture and
food security; (iii) wealth creation and poverty alleviation; (iv) land reform; (v) security of lives and property;
(vi) human capital development, including compulsory education for children; and (vii) transport revolution,
including improved mass transit.
3
World Bank (2009a).
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5. Main focuses of the Country Partnership Strategy are: (i) improving governance,
(ii) maintaining non-oil growth, and (iii) promoting human development, in line with the
Government's national development strategy. Prior to the 2009 Country Partnership Strategy, some
donors had directed their assistance to a selected number of states in order to avoid spreading
assistance too thinly and because of issues related to poor governance in some areas. However, the
new approach was to support more states without particular attention to specific areas. 4

6. Within the Government, the agencies with statutory responsibility for the coordination of
official development assistance are the National Planning Commission (NPC) and the Federal
Ministry of Finance. The NPC coordinates all grants and technical assistance, while the Federal
Ministry of Finance is responsible for coordinating all concessionary loans.

(2) AID-FOR-TRADE NEEDS

7. One of the main impediments to trade and economic growth in Nigeria has been poor
infrastructure, including transport, power, and telecommunications (see Chapter IV), and this has been
recognized in Nigeria's Vision 20:2020. Power outages, poor quality of supply, and low access to
electricity are continuing problems and the delivery of adequate and reliable power is one of the
priority areas in the Vision 20:2020. The carriage of goods and people relies almost exclusively on
road transport but the network is in poor condition due to poor maintenance. The Federal
Government is making efforts to encourage other means of transport and addressing the needs of
freight and logistics, such as linking Nigerian ports and major airport to railways. Considerable
progress has been made over the past few years in improving telecommunications, particularly mobile
phones, but more needs to be done, especially for broadband communications.

8. Trade facilitation has been ranked as one of the highest priorities and the Government
identified needs relating to border administration in order to improve the operational capacity of the
Nigeria Customs Service; these include training and capacity building for customs officers and other
relevant trade facilitation agencies, particularly on valuation, control and release of goods, and risk
management. An inter-ministerial Trade Facilitation Task Force 5 has been set up and serves as the
focal point for trade facilitation activities and provides a coordination role.

9. Nigeria also faces challenges related to poor quality of goods and services that do not meet
international standards. Compliance with international standards has been difficult due to limited
technical, human, and standards-related infrastructure. National laboratories will have to be improved
or in some cases built while the trade regulatory agencies, particularly the Standards Organization of
Nigeria (SON), also need to be upgraded in order to effectively monitor the standard of Nigerian
products and to ensure that Nigerian goods meet international market standards. In this respect,
several donors have been providing technical assistance and capacity building in the area of sanitary
and phytosanitary (SPS) standards. For example, with support from the Standard and Trade
Development Facility (STDF), Nigeria is benefiting from a regional project on SPS capacity building
to mitigate the harmful effect of pesticide residues in cocoa and to maintain market access. 6

10. Nigeria presented its trade and productive-capacity-related needs at the August 2010 Session
on Aid for Trade of the WTO Committee on Trade and Development. 7 Seven areas for support were
identified: (i) trade policy advocacy, (ii) trade policy development, (iii) enhancing the

4
World Bank (2009a).
5
The Trade Facilitation Task Force is made up of 23 ministries, departments and agencies, private
sector representatives, and development partners.
6
ICCO (2010).
7
WTO document WT/COMTD/AFT/W/23, 13 August 2010.
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competitiveness of supply capacity, (iv) compliance support infrastructure and services, (v) physical
infrastructure, (vi) legal and regulatory framework, and (vii) trade facilitation and trade-related
financial services. Following meetings with development partners, including UNDP and other
stakeholders, the Federal Government decided to regroup the seven categories of activities into three
broad areas of support for trade and productive capacity in Nigeria: (i) mainstreaming trade into
national development strategies, (ii) enhancing trade competitiveness, and (iii) institutional and
human resource capacity development.

(3) SPECIFIC TRADE-RELATED TECHNICAL ASSISTANCE NEEDS

11. Nigeria faces challenges related to legal, regulatory, and institutional reform. Support has
been provided by donors, such as USAID, in certain areas, including customs reform and the
development of new customs legislation. However, difficulties remain with the review of legislation
in other areas, such as TRIPS. The authorities recognize that legislation will have to be accompanied
by implement regulations and institutional reform, which will require support from development
partners.

12. At the international level, Nigeria would benefit from assistance to strengthen the institutional
and human capacity in the multilateral trading system and to meet its obligations under the WTO
Agreements, particularly Customs Valuation, Agriculture, SPS, and TBT. Nigeria also needs support
in the dissemination of trade-related information, as indicated in its request to the WTO in 2009 to
establish three reference centres. Nigeria has not met all its notification obligations in the WTO, and
capacity building would help the responsible government agencies to prepare and analyse
notifications.

13. With respect to SPS issues, support is needed in the area of notifications, to ensure that
producers and exporters are informed of the SPS requirements of their trading partners, and how to
coordinate SPS-related activities at the national level, including the effective involvement of
stakeholders. At a national WTO training workshop on TBT, held on 26-29 July 2010, several needs
were identified relating to harmonization, conformity assessment, transparency requirements and
procedures.

14. Nigeria undertook a trade facilitation needs assessment in 2008 with support from the WTO
Trade Facilitation Trust Fund. The exercise helped Nigeria assess its technical assistance and
capacity-building priorities if it were to implement WTO Members' proposals on issues related to
freedom of transit, fees and formalities, and the publication and administration of trade regulations.
The assessment also highlighted the need for more regular consultations with stakeholders on trade
facilitation to address issues that constrain Nigeria’s trade. Nigeria could request support from
development partners to facilitate discussions on how to implement some of the recommendations of
the needs assessment. In this regard, more financial and technical support could be provided to the
Trade Facilitation Task Force.

15. Nigeria has had particular problems with fully implementing the Customs Valuation
Agreement. Some training has been provided by the WTO Secretariat to enhance the understanding
by customs officers of the valuation control techniques, including post-import audit and risk
management, as well as the establishment of a data-base. However, more training is needed to enable
customs officers to implement the Agreement effectively and to support the ongoing reforms being
undertaken by the Nigerian Customs Service. The Nigeria Customs Service is in the process of
upgrading to ASYCUDA ++, which should improve customs clearance procedures. Support is also
needed for improving the availability and use of ICT through the electronic digitization and
documentation of customs and other trade-related documents.
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16. As reported in the last TPR for Nigeria, the legislation on intellectual property rights covers
patents and industrial designs, trade marks, and copyright, but does not include protection for
geographical indications, lay-out designs of integrated circuits, undisclosed information or plant
varieties, or for specified border measures. Technical cooperation may help Nigeria complete the
coverage of its IP legislation to cover these areas and to update existing legislation where necessary.
It could also improve the skills and knowledge of regulatory officials, particularly in the area of IPR
enforcement.

(4) AID-FOR-TRADE SUPPORT TO NIGERIA

17. Foreign aid represents less than 1% of GDP in Nigeria. According to the OECD Creditor
Reporting System Database, Nigeria received a total of US$1.92 billion in aid for trade between 2002
and 2008 (Table V.1). Annual commitments averaged US$189.743 million between 2002 and 2005,
and support increased to US$728.74 million in 2008. However, aid for trade accounted for
approximately 18% of total sector allocable ODA in 2002-05 but fell to 7% in 2007.
Table V.1
Aid-for-trade support, 2002-08
(US$ million at 2008 current prices)
Sector 2002 2003 2004 2005 2006 2007 2008
Transport & storage, total 124.23 17.55 0.18 1.05 2.32 10.13 416.71
Communications, total 0.15 0.59 0.67 2.21 2.02 7.36 5.29
Energy, total 13.28 2.53 0.62 173.79 10.68 99.08 6.18
Banking & financial services, total 3.31 25.74 19.85 0.28 39.63 24.15 37.83
Business & other services, total 22.92 0.24 23.77 3.73 9.37 0.21 23.13
Agriculture, total 5.88 77.72 0.7 15.75 27.26 31.71 233.05
Forestry, total 0.13 0.08 .. .. .. 0.06 1.71
Fishing, total 0.04 .. 0.02 0.08 .. 0.06 0.02
Industry, total 1.21 5.49 65.23 42.45 63.04 11.44 2.6
Mineral resources & mining, total .. 0.03 86.19 0.67 1.19 0.08 0.93
Trade policies & regulations, total 1.30 0.59 1.30 3.13 17.06 0.94 1.39
Tourism .. .. 0.01 .. .. .. ..
Total 172.45 130.56 198.54 242.14 172.57 278.22 728.74

.. Not available.
Source: OECD, Creditor Reporting System Database.

18. Support has been concentrated in economic infrastructure and in building productive capacity
in transport, energy, and agriculture. More than 80% of the aid for trade in 2007 was directed into
transport, energy, and agriculture, and in 2008 almost 90% was directed into transport and agriculture.

19. The top eight aid for trade donors for 2007-08 were the World Bank, the United States, the
United Kingdom, the Netherlands, Austria, Denmark, the EU, and the African Development Bank.
The four main donors, the World Bank, USAID, DFID and AfDB, which account for over 80% of
annual development assistance to Nigeria, agreed on a joint single country partnership strategy for
2010-13 in order to have a greater impact.

20. World Bank support has focused on infrastructure and human development and it has
co-financed projects with the AfDB in the transport sector and with the DFID in the energy sector. 8
8
In May 2010, the IDA lending portfolio in Nigeria consisted of 23 active projects with total
commitments of US$3.56 billion in various sectors including roads, energy, education, health, social protection,
private-sector development, and rural development. Infrastructure and human development comprise almost
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As of June 2009, the World Bank, through the International Development Association (IDA),
provided US$99 million in grants to Nigeria through trust funds to support the promotion of
infrastructure and other sectors related to human development.

21. DFID is the donor coordinator on trade policy issues in Nigeria and has been active in
supporting the work of the Trade Facilitation Task Force including the elaboration of a short, medium
and long-term Action Plan. However, a large part of DFID's support to Nigeria has been in the area
of the human development, with most of the funds allocated to improve health and HIV/AIDS, and
education.

22. The EU has also provided support for the work of the Trade Facilitation Task Force through
funding for short-term action plans such as sensitization and public awareness events in ports,
borders, and transit corridors. However, EU support has been mainly through the European
Investment Bank and the Central Bank of Nigeria, with the provision of long-term loans and equity to
fund small and medium-term investments in industry, agri-industry, mining, tourism, and related
services.

23. USAID assistance to Nigeria in the area of trade capacity building has focused mainly on
trade facilitation (transit corridor support, including time-release studies), customs operation and
administration (including the development of a risk management programme), the development of
new customs legislation, information technologies, export promotion, and business services and
training. The adoption of modern customs legislation incorporating WTO disciplines and Revised
Kyoto Convention best practices has been given a high priority by the Ministry of Finance, the
Nigeria Customs Service, and the Presidential Task Force for Customs Reform.

24. The African Development Bank (AfDB) support to Nigeria has focused on infrastructure
development. For example, in 2008 the AfDB approved the financing of US$33 million for a
transport facilitation project (the Nigeria-Cameroun highway), and US$100 million was committed in
2009 to finance the Economic and Power Sector Reform Programme. In 2010, the AfDB is planning
to provide financing (US$18 million) for a Capacity Building Project for Public-Private Partnership in
Infrastructure.9

25. Nigeria has been active in requesting technical assistance from the WTO. Over the last three
years, it has benefited from four national technical-assistance activities, covering agriculture, SPS,
TBT, customs valuation, and rules of origin.

26. At the regional level, Nigeria has participated in more than 20 training seminars and
workshops organized by the WTO. The subjects covered included: agriculture, dispute settlement,
non-agricultural market access, government procurement, SPS, TBT, WTO rules on regional trade
agreements, trade remedies, and trade and development. Several Nigerian officials have also
participated in specialized and thematic Geneva-based training activities, including the Specialized
Course on TBT, trade and environment, SPS, agriculture, dispute settlement, government
procurement, NAMA, services, regional trade, trade and development, and TRIPS. A number of
Nigerian officials have completed several interactive on-line training courses offered by the WTO on
various topics. In addition, one officer, from the Federal Ministry of Commerce and Industry,
benefited from the ten-month trainee/internship programme at the WTO Secretariat in 2009.

27. Nigeria is benefiting from two WTO Standards and Trade Development Facility (STDF)
projects. The first project is on SPS capacity building for private and public-sector organizations in

two-thirds of the lending portfolio.

9
African Development Bank (2010).
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the area of food exports of sesame seed and shea butter. The project started in October 2010 and is
being implemented by the Nigeria Export Promotion Council with supervision from the International
Trade Centre (ITC). The total cost of the project is US$520,040, of which grant funds from the
WTO-STDF account for 70% (US$339,240); the Federal Government of Nigeria is responsible for
the remaining 30%.

28. The second STDF project is regional strategy on SPS capacity building to mitigate the
harmful effect of pesticides residues in cocoa and to maintain market access. This project, which
covers Cameroun, Cote d'Ivoire, Ghana, Nigeria, and Togo, will start in 2011 and will be managed at
the international level by the International Cocoa Organisation and implemented at the national level
by the Cocoa Association of Nigeria. The total budget for the project is approximately US$5 million;
the contribution from the STDF is US$600,000 and the remainder will be provided mainly by the
Agricultural Commodity Programme of the African Caribbean and Pacific Group of States.
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