Often, when we get into the discussion of Nigeria and Africa in the global trade landscape, the narrative gravitates towards simplifying tariffs as a linchpin for fostering trade relations and catalysing growth. Yet, this discourse is markedly incomplete without thoroughly examining non-tariff barriers (NTBs), which present a labyrinth of challenges, often more daunting and multifaceted than their tariff counterparts.
For Nigeria, Africa’s largest economy, dismantling NTBs is not just a trade imperative; it is a strategic necessity to ensure food security, bolster manufacturing, and position the nation as a trade hub for West Africa, especially in the context of the African Continental Free Trade Area (AfCFTA).
Non-tariff barriers are the restrictive regulations and procedures other than tariffs that countries use to control the amount of trade across their borders. Unlike tariffs, which are clear in their intent and quantification, NTBs encompass a wide range of policy measures that could be trade-distorting but are not always apparent or direct. These include quotas, import licensing systems, sanitary and phytosanitary standards (SPS), technical trade barriers (TBT), and various customs and administrative entry procedures.
Non-tariff barriers are the restrictive regulations and procedures other than tariffs that countries use to control the amount of trade across their borders.
Overcoming non-tariff barriers
To harness the potential of NTB reduction for bolstering food security and emerging as a trade and manufacturing nexus in West Africa, Nigeria must embark on a comprehensive, multifaceted strategy encompassing regulatory harmonisation, capacity building, and infrastructural enhancement. Let’s take each of these ideas briefly. To leverage NTB reduction for food security and to become a manufacturing and trade nexus in West Africa, Nigeria must embark on a multi-faceted strategy that includes regulatory harmonisation, capacity building, and infrastructural development.
A critical step in dismantling barriers to trade (non-tariff barriers, or NTBs) involves harmonising regulations and standards with international norms. This, along with streamlining customs procedures to reduce border wait times, can significantly boost trade. Digital customs processes, which eliminate physical paperwork and enhance efficiency, are key to achieving this. Nigeria can look to the European Union’s Single Market for inspiration, where regulatory harmonisation has significantly eased cross-border trade among member states, promoting economic growth and attracting foreign investment.
Also, to strengthen sanitary and phytosanitary measures, we need to invest in quality control labs and training for farmers on international standards. Kenya’s success in exporting horticultural products to the European market, despite stringent SPS measures, serves as a practical model. By enhancing SPS compliance, Nigeria can not only protect domestic agriculture but also access new markets. For Nigeria, improving food security while boosting agricultural exports means elevating SPS measures.
It is also very important to enhance technical competence and infrastructure to address technical barriers to trade. This definitely requires technical competence and investment in infrastructure development. This includes standardisation of products, accreditation of facilities, and training of personnel on international standards. Singapore’s investment in world-class port infrastructure and its adoption of international product standards showcase how technical enhancements can facilitate trade.
All that said, to effectively address NTBs, Nigeria must engage in dialogue and collaboration with its trade partners, both within and outside Africa. Establishing joint committees or working groups to regularly review and address NTBs can ensure continuous progress. The success of the European Union’s Trade Barrier Regulation in identifying and overcoming NTBs through diplomatic channels illustrates the power of engagement.
Learning from global best practices
Several countries have successfully navigated the challenges posed by NTBs, offering valuable lessons for Nigeria. A case in point is Rwanda’s focus on improving its business environment. By including the simplification of customs procedures and investment in technology, it has significantly reduced NTBs. Rwanda’s approach demonstrates the importance of political will and the adoption of technology in trade facilitation.
Apart from Africa, other examples include Chile and New Zealand. Chile has an extensive network of trade agreements that include specific provisions for addressing NTBs, demonstrating the importance of legal frameworks in trade facilitation. Nigeria could explore similar agreements, particularly within the AfCFTA context, to systematically address NTBs. For New Zealand, it is an example of using a sophisticated phytosanitary approach to SPS measures as a way of balancing trade facilitation with the protection of biodiversity. This offers a model for Nigeria to protect its agricultural sector while expanding export opportunities.
For Nigeria, the dismantling of non-tariff barriers is as crucial as tariff reduction for unlocking the country’s trade potential. By focusing on regulatory harmonisation, enhancing SPS measures, improving technical infrastructure, and fostering engagement and collaboration, Nigeria can overcome the challenges posed by NTBs. Learning from the success stories of countries like Rwanda, Chile, and New Zealand, Nigeria can pave the way for a future where it not only secures its food supply but also emerges as a manufacturing and trade hub in West Africa.
The journey towards this future requires concerted effort, strategic planning, and an unwavering commitment to reform and innovation. With the right policies and actions, Nigeria can transform its trade landscape, benefiting not just its economy but also setting a precedent for trade facilitation across Africa under the AfCFTA.
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