Trade Facilitation: Nigerian Businesses, Others to Save $1trn Eromosele Abiodun

Nigerian businesses and others around the world stand to gain about $1 trillion annually if Nigerian ratifies the World Trade Organisation (WTO) Trade Facilitation Agreement (TFA).

The TFA will enter into force once two-thirds of the WTO membership has formally accepted the agreement.

Nigeria is yet to ratify the TFA despite promises made by Nigeria’s Ambassador to the WTO, Ademola Adejumo.

Adejumo last year promised that the agreement would be ratified when he led a delegation from the World Bank on a courtesy visit to the Executive Secretary of the Nigerian Shippers’ Council (NSC), Hassan Bello.

On the contrary, Nigeria’s West African rival, Ghana has ratified the agreement and recently submitted its instrument of acceptance to the WTO.

In addition to Ghana, the following WTO members have also accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama.

Others are: Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei Darussalam, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Afghanistan, Senegal, Uruguay, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica, Mongolia, Gabon, the Kyrgyz Republic, and Canada.

Concluded at the WTO’s 2013 Bali Ministerial Conference, the TFA contains provisions for expediting the movement, release and clearance of goods, including goods in transit. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues. It further contains provisions for technical assistance and capacity building in this area.

Specifically, if ratified and

implemented, the WTO’s TFA could save Nigerian businesses at least N2.4 trillion annually in transaction cost.

The amount is 15 per cent of the country’s average total trade value of N16.4 trillion annually which could be saved if trade facilitation processes, such as automation and single window platforms are effectively implemented.

Speaking on the development, Managing director of Trade Development and Facilitation Consulting (TDAF) at the World Trade Centre II, Geneva, Switzerland, Tom Butterly, stressed that for developing countries such as Nigeria and Ghana, trade transaction cost can be more than 15 per cent, indicating a bigger need for West African countries to embrace the single window reform and ratify the TFA.

Butterly said many countries are now focusing on implementing deep trade facilitation reforms, with the single window becoming a game changer.