Corruption constitutes major barrier to advancement of US trade, investment in Nigeria —Report

*The United States Government, in its latest 2025 National Trade Estimate Report on Foreign Trade Barriers, states that corruption and lack of transparency in Nigeria’s tender processes are of great concern to American companies

Gbenga Kayode | ConsumerConnect

The United States (US) Government, in a fresh report, has alleged that American firms experience difficulties in day-to-day operations due to officials’ inappropriate demands for ‘facilitative’ payments.

The US noted that corruption has remained a substantial barrier to the advancement of trade and investment in the West African country.

In the country’s latest 2025 US National Trade Estimate Report

on Foreign Trade Barriers, the Office of the United States Trade Representative (USTR)

states that corruption and lack of transparency in tender processes are of great concern to US companies.

The report also explained: “U.S. firms experience difficulties in day-to-day operations as a result of inappropriate demands from officials for ‘facilitative’ payments.

“Efforts to strengthen anti-corruption measures have been hampered by inter-ministerial infighting and partisan politics.”

The Office of the United States Trade Representative also said: “Questions also remain regarding the Nigerian justice system’s capacity to achieve convictions and appropriate sentencing for corruption-related crimes.”

On efforts at accessing Nigerian market

The Office further criticised Nigeria for what it described as continued delay in approving import permits for American agricultural products.

It said that the development is a longstanding trade barrier that has hindered access to the Nigerian market.

Despite repeated efforts at securing market access, Nigeria has not acted on several pending requests concerning food and agricultural imports from the US, the report alleged.

The National Trade Estimate Report on Foreign Trade Barriers noted: “Since 2019, the United States has sought to negotiate import permits for the export of several categories of US food and agricultural products.

“Nigeria has been slow to approve these requests.”

The USTR noted in the report, that Nigeria’s weak capacity to review certificates, inspect goods, and conduct testing had contributed to long clearance delays, forcing many traders to rely on informal channels.

The report as well faulted Nigeria’s lack of consistency in applying sanitary and phytosanitary rules.

This has created confusion among exporters, according to the US Government.

The USTR averred: “Nigeria is not consistent in the implementation of technical regulations and sanitary and phytosanitary measures, which can create confusion and undermine compliance.”

Besides, the US Government also challenged Nigeria’s complex and restrictive import regime in the economy.

The report noted that while the West African country’s average Most-Favoured Nation applied tariff rate stood at 12 percent 2023, agricultural products attracted 15.9 percent, and non-agricultural goods 11.4 percent.

The US alleged that Nigeria imposes several “supplementary charges” that significantly raise the effective rate paid by importers into the country.

The USTR report further highlighted how “Nigeria maintains a combined duty plus other associated import fees of 50 percent or more on 79 tariff lines.”

It noted these include 17 tariff lines on which the combined duty plus other associated import fees reach or surpass the 70 per cent limit set by ECOWAS.”

The American Government criticised Nigeria’s continued import bans on 25 product categories, including poultry, beef, spaghetti, fruit juice in retail packs, used vehicles over 12 years old, soaps, and certain alcohols, describing them as barriers to trade.

It stated: “The Nigeria Customs Service continues to ban the import of 25 different product categories.”

The report pointed to systemic problems in Nigeria’s customs administration, including corruption, manual processes, and inconsistent interpretation of trade rules.

The USTR said: “Importers report inconsistent application of customs regulations; lengthy clearance procedures, often due to outdated manual processing systems; and corruption.”

It observed although the Federal Government of Nigeria had approved a $3.1bn customs modernisation project since 2020 to automate processes, the project has suffered delays, and is now the subject of legal disputes.

Lack of transparency, contract payment issues in procurement process

In regard to public procurement, the USTR lamented that US companies face difficulties in accessing government contracts due to a lack of transparency and contract payment issues in the country.

Agencies often fail to comply with procurement guidelines, despite the requirement for a “Certificate of ‘No Objection’ to Contract Award” from the Bureau of Public Procurement, the report stated.

The USTR asserted: “Nigerian Government agencies do not always follow procurement guidelines.

“Foreign government-subsidised financing arrangements appear in some cases to be a crucial factor in the award of government procurements.”

Acknowledging the passage of the Copyright Act, 2022, and other intellectual property reforms, the report yet submitted that enforcement of same has remained poor in Nigeria.

Fake products and consumer safety

The USTR report stated: “Counterfeit goods, including pharmaceuticals, automotive parts, and other consumer goods, remain widely available in Nigeria and often threaten the health and safety of consumers.

The US Government further raised concerns about digital trade restrictions.

The American country noted that the National Information Technology Development Agency (NITDA) Guidelines require all data concerning Nigerian citizens to be stored within the country.

The report noted the country’s localisation rules, though not rigorously enforced, have created uncertainty for American businesses.

As regards the impact of taxes on facilitating trade and investment between the two countries, the US Government noted that Finance Acts of 2020 and 2021 introduced new taxes on digital services foreign companies provide to Nigerian consumers.

The report stated that the “US companies have expressed concerns about the impact of the tax

It further criticised restrictions in Nigeria’s reinsurance and advertising sectors, including prohibitions on foreign participation in oil and gas risk reinsurance, and mandatory advertising registration with the Advertising Regulatory Council of Nigeria.

On Forex matters

In respect of foreign exchange, the report started that despite the Central Bank of Nigeria’s move to unify exchange rates in 2023 and lift restrictions on access to forex for 43 previously barred items, challenges remained.

The US Government said: “Companies report that the approval process for the repatriation of funds remains a significant barrier to investment by US entities, as it is frequently subject to delays and denials.”

The report stated that out of an estimated $7 billion in Foreign Exchange (Forex) backlogs, only $4.6 billion had been cleared by the CBN as of March 2024, while $2.4 billion was still under review.

The USTR described Nigeria’s main ports, particularly Apapa in Lagos, as some of the most expensive globally, citing congestion, infrastructure issues, and maritime insecurity.

The USTR report: “The 30-day average delay to clear a container ship makes Apapa in Lagos among the most expensive ports for shipments from the United States.”

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