By Vera Samuel Anyagafu
Both the UK and Nigeria governments have confirmed their shared interest in pursuing a potential enhanced trade and investment partnership for increased engagement at the eighth and final UK-Nigeria Economic Development Forum (EDF) in Abuja.
The EDF launched in August 2018 by former UK Prime Minister, Theresa May and President Muhammed Buhari, holds bi-annually, and serves as a platform to address market access barriers, respond to opportunities and challenges of doing business and boosting bilateral trade and investment between Nigeria and the United Kingdom.
Since inception, the EDF, has continued to play very important role in strengthening trading relationship between the UK and Nigeria, making it possible for the two countries to enjoy robust bi-trade relations, unlock finance, facilitate better regulatory link ups, support British and Nigerian businesses and engage on important global issues.
Speaking at the forum, the UK International Trade Secretary, Kemi Badenoch, who applauded the successes of the EDF, said the successes of EDF over the last four years have helped in addressing crucial market access barriers and boosted the two countries exchanges in key sectors, such as legal and financial Services.
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She also said that, “Nigeria is Africa’s largest economy and I’m delighted to see our trade and investment links grow, already worth £5.5 billion.”
Going further, Kemi said that she welcomes the shared interest in exploring an enhanced Trade and Investment partnership between Nigeria and the UK, and, “that will open up new opportunities for UK and Nigerian business, create jobs and future-proof our economies against a changing world.”
On her part, the UK Prime Minister’s Trade Envoy to Nigeria, Helen Grant, said that UK and Nigeria go far when they go together.
Her words, “We are supporting Nigeria on the path to becoming a higher-growth, more inclusive and more sustainable economy as we move towards the 2023 elections. This is part of a wider push by the UK to drive a free trade, pro-growth agenda across the globe, using trade to drive prosperity and help eradicate poverty. A potential Enhanced Trade and Investment Partnership would include a series of commitments to tackle non-tariff market access barriers to deliver tangible results for businesses in both the UK and Nigeria“
Speaking also, Nigeria Minister for Industry, Trade and Investment, Otunba Adeniyi Adebayo, said, “The EDF has been a fantastic forum and it is important that what comes out of the working group builds upon its principles and strengthens its outcomes. I know that both Nigeria and the United Kingdom have exchanged policy papers detailing how they wish to proceed, and I look forward to feedback as both papers are reviewed.
“Increased collaboration with Nigeria and other developing markets is needed to mitigate against both current and potential future supply-chain challenges. To this end, the introduction of the Developing Countries Trading Scheme (DCTS) is warmly welcomed.
“The reduction in tariffs on hundreds of everyday products should be a win for both Nigerian exporters and UK consumers who are able to access our products at a lower price.
“In 2021, UK exports to Nigeria were said to be $1.64 Billion and Nigerian exports to the UK $1.12 Billion. Not too far apart. As we move into 2023 it will be good to see the DCTS grow these numbers. Increasing bilateral trade is key for both nations and the agreement we are forging must strategically promote its increase. We must continue to work together to resolve market access issues and enhance economic cooperation.”
It was also disclosed at the forum that the total trade in goods and services (exports plus imports) between the UK and Nigeria currently stands at £5.5 billion.
“Of this £5.5 billion, total UK exports to Nigeria amounted to £3.3 billion in the four quarters to the end of Q2 2022, while total UK imports from Nigeria amounted to £2.2 billion in the four quarters to the end of Q2 2022.”
Also disclosed was the UK recently launched Developing Countries Trading Scheme (DCTS). It is said to be one of the most generous preference schemes in the world, with enhanced preferences for Nigeria-UK Trade and Investment.
The new scheme which will come into effect in early 2023, is expected to cut tariffs on hundreds of everyday products from developing countries, a will be welcome news to Nigerian exporters.
It will equally extend tariff cuts to hundreds of more products exported from Nigeria and other developing countries, going further than the EU’s Generalised Scheme of Preferences.
“This is on top of the thousands of products, which Nigeria can already export to the UK duty-free”, the meeting noted.
It is also important to note that the Nigerian Ministry is committed to developing, implementing, and reviewing policies that encourage both foreign and local investment and industrialization.
And since the last EDF, Nigeria has progressed significantly with the development of its Investment Policy and the Nigerian Investment Promotion Commission (NIPC) has almost finalized the investment roadmap. These initiatives help provide organisations with the confidence to continue making long-term, sustainable investments in Nigeria.
On the other hand, the DCTS replaces the UK Generalised Scheme of Preferences, which was rolled over from the EU membership, and will come into force in early 2023. The scheme is said to cover 37 countries in Africa, 18 in Asia, 8 in Oceania and 2 in the Americas, representing varied and exciting trade opportunities around the world.
Key aspects of the DCTS are, making product specific rules and rules on cumulation more generous and easier to follow for least developed countries, ensuring that goods which are genuinely competitive in the UK do not get preferential tariffs, making it simpler for developing countries to get the enhanced trade preferences in the scheme whilst including powers to suspend a country on the grounds of human rights and labor rights violations and for the first time, including powers to suspend countries that are not meeting their climate change and environment-related obligations.
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However, as the agreement in the EDF Memorandum of Understanding (MoU) comes to a close with the UK and Nigeria governments agreeing that the Enhanced Trade and Investment Partnership will offer an alternative high-profile mechanism to progress bilateral economic issues of mutual strategic importance, under which both sides will continue to work together to resolve market access issues and enhance economic cooperation, the UK government reaffirmed its commitment to strengthening and deepening relationship with Nigeria, under shared interest in pursuing a potential Enhanced Trade and Investment Partnership.
