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.
“A facility that allows partners involved in trade and transport of goods to lodge and obtain standardised information, the single window is a major indication of a country’s readiness for trade facilitation and it provides for single entry point by the shipper with the information being shared among government agencies involved in trade and other private sector players, such as banks and insurance.
“For a typical West African country, such as Nigeria, or Ghana, there are about 200 pieces of information to be provided by an importer/exporter at offices of about 14 government agencies, banks and insurance and some of these may require a return visit where mistakes occur,” he said.
Butterly said the single window reduces time of doing business by 50 per cent and can bring down cost of doing business by 25 per cent.
He said: “The single window reform is now helping to create a fundamental change of the mindset. Countries even in Africa that have embraced and implementing the single window have been able to reduce cost of doing business significantly and are doing so well. They include Coasta Rica and Rwanda and Ghana is also able to save about $200 million in 2015. Ghana is also forecast to move up from current global position of 171 to 121 out of 189 countries and Sub-saharan Africa rank of 36 to 16 out of 47 countries in ‘World Bank Trading Across Borders’ (ease of doing business) survey by 2020.”