UK launches Developing Countries Trading Scheme, removes duty on Nigerian exports

United Kingdom has launched the Developing Countries Trading Scheme (DCTS) in Nigeria which will see exports of goods from Nigeria attracting no duty.

DCTS offers one of the most generous sets of trading preferences in the world and demonstrates the UK’s commitment to building long term, mutually beneficial relationships with countries like Nigeria.

This is significantly more generous than the EU’s GSP scheme and the US’ AGOA scheme and, based on trade volumes, would mean that 99 per cent of goods exported to the UK are duty free.

UK Deputy British High Commissioner in Lagos, Ben Llewellyn-Jones said: “Nigeria is one of the UK’s most important partners in Africa and the abolishes tariffs on over 3000 everyday products that Nigeria currently exports including cocoa, cotton, plantain, flowers, fertilizers, tomatoes, frozen shrimps and sesame. The overarching aim of the new scheme is to grow free and fair trade with developing countries, boosting the economy and supporting jobs in those countries, as well as in ours.”
Tariffs were removed for cocoa butter (2.5per cent) and paste (4.5per cent). Cocoa remains duty free. Nigerian global exports of around £40m (butter) and £10m (paste) a year. UK imports of around £250m of cocoa butter annually of which Nigeria currently accounts for less than two per cent. UK imports of cocoa paste around £40m annually with none from Nigeria as identified by Nigerian Export Promotion Council (NEPC) as key opportunity.
Tariffs were removed for woven cotton (6.4per cent) and tariffs on cotton clothes and apparel have been removed. Raw cotton remains duty free, also identified by NEPC as a key opportunity.
Tariffs were removed for urea (six per cent). Nigeria recorded global exports of over £650million in 2021 – tenth largest global exporter. UK global imports of over £200million with none from Nigeria. This product was also identified by the NEPC as a key opportunity.Tariffs removed for fresh cut (4.5per cent) and prepared (6.5per cent) flowers. Nigeria global exports were over £10millio in 2021 with UK global imports of over £600million a year.
Tariffs were lowered for frozen shrimp from 4.2per cent to 3.6per cent. Nigeria global exports stand at over £30mllion a year with UK global exports of over £300million per year with no imports from Nigeria.
In the petrochemicals, tariffs were removed for many products including polyethylene (2.5per cent) and polypropylene (2.5per cent). Over £20million of Nigeria global exports. UK global imports in the £billions a year with very low volumes from Nigeria. Petrochemicals identified by the Nigerian Export Promotion Council as a key opportunity.
Tariffs removed for plantain (12.5per cent). UK global imports of around £25m a year with very low amounts from Nigeria. Identified by the Nigerian Export Promotion Council as a key opportunity.
Tariffs removed on sesame oil (2.5-4.5per cent depending on usage) and sesame cake. Nigeria global exports of sesame oil are around £10million a year. UK global imports are around £15million a year with none from Nigeria. Sesame was also identified by the NEPC as a key opportunity.
Tariffs removed for fresh tomatoes (eight per cent between November-May) and prepared tomatoes (14per cent). UK global imports of around £500m (fresh) and £350m (prepared) a year. Currently low Nigerian exports but identified by Nigerian Export Promotion Council as key opportunity.
This work 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.
The key aspects of the DCTS are dramatically cutting tariffs for Nigeria so that 3000 new products are duty free for the first time. The average existing tariff on these goods is seven per cent meaning these changes make Nigerian exports more competitive in the UK.
Many tariff reductions are on value added goods such as processed sesame oil, cotton clothing and cocoa butter and paste and complement existing duty free trade on raw products.