The United Kingdom on Monday said that regulatory hurdles and subsidies in Nigeria by state-owned enterprises have hindered trade and investment in the country.
The UK’s Permanent Representative to the World Trade Organization (WTO) Simon Manley, at Nigeria’s Trade Policy Review in Geneva called for a review of Nigeria’s business environment.
While commending the removal of fuel subsidies in May 2023, Manley said market-distorting practices by state-owned enterprises in energy have continued to discourage private-sector participation.
The plea for policy review, Manley said, was a result of feedback received from British investors in Nigeria, who highlighted forced technology transfers, discriminatory enforcement of competition policies, and complex regulatory frameworks, as harmful policies affecting investment.
“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 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 to boost investment, boost trade, improve its business environment and ultimately increase Nigerian prosperity.”
While noting the importance of upholding the recently signed UK-Nigeria Strategic Partnership, which aims to identify mutual growth opportunities and reduce trade barriers, Manley emphasized that addressing these barriers would not boost investor confidence and Nigeria’s global trade position.
He acknowledged Nigeria’s increasing trade diversification, as manufacturing and agriculture become more prominent contributors to the economy.
Manley said the African Continental Free Trade Agreement (AfCFTA) was recognized as a pivotal development for Nigeria’s trade landscape, adding that the implementation of the Digital Trade Protocol by Nigeria could significantly reduce trade costs.
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 per cent in goods and 25 per cent 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.”