On Monday, the United Kingdom highlighted that regulatory challenges and subsidies from Nigeria’s state-owned enterprises have been significant obstacles to trade and investment in the country.
Simon Manley, the UK’s Permanent Representative to the World Trade Organization (WTO), made these remarks during Nigeria’s Trade Policy Review in Geneva, urging a comprehensive review of the country’s business environment.
Manley commended the removal of fuel subsidies in May 2023 but pointed out that ongoing market-distorting practices by state-owned energy enterprises have continued to discourage private-sector participation. His appeal for a policy overhaul was informed by feedback from British investors operating in Nigeria, who expressed concerns over forced technology transfers, biased competition policies, and complex regulatory systems, all of which they believe hinder investment opportunities.
“There are significant concerns regarding the role of state-owned enterprises in Nigeria’s business climate,” said Manley. “As of 2022, nearly 40 state-owned enterprises were involved in critical sectors such as energy. These entities, in many cases, engage in market-distorting practices that create unfair competition.”
Manley also outlined other major concerns voiced by British businesses, including harmful subsidies, forced technology transfers, and discriminatory enforcement of competition laws. He emphasized that addressing these challenges would be key to improving the investment climate, boosting trade, and enhancing Nigeria’s economic prospects.
Manley stressed the importance of maintaining the recently established UK-Nigeria Strategic Partnership, which is designed to foster growth opportunities and reduce trade barriers. He noted that resolving these barriers would help strengthen investor confidence and improve Nigeria’s position in the global trade arena.
Acknowledging Nigeria’s progress in trade diversification, with manufacturing and agriculture becoming more significant contributors to its economy, Manley also praised the country’s commitment to the African Continental Free Trade Agreement (AfCFTA). He added that Nigeria’s implementation of the Digital Trade Protocol could play a crucial role in lowering trade costs.
He referenced a joint World Bank-WTO Policy Note from the previous year, which indicated that improving Africa’s digital regulatory environment could reduce trade costs by 17% for goods and 25% for business services. “We are optimistic about the potential benefits of the Digital Trade Protocol for Nigeria’s businesses, consumers, and overall growth,” Manley concluded.
