The World Trade Organization (WTO) on Wednesday urged Nigeria to simplify its tariff structure and remove import prohibitions as part of efforts to create a sound business environment in Africa's most populous country.

In its first review on Nigeria's trade policies and practices since 1998, the world trade body said that while the west African country generally made progress in implementing its economic reforms, its trade regime has become more protectionist over the past seven years.

Its average applied most-favored nation (MFN) tariff rose from 24.4 percent in 1998 to about 28.6 percent in 2003 while the number of items subject to import bans increased by about ten-fold during the period under review, the WTO said. These restrictions, alongside the increased tariff protection, can "distort consumer prices thereby undermining the government's efforts to reduce poverty and increased the incentive for smuggling, with concomitant losses in customs revenue," it said.

The agriculture sector that accounts for about 26 percent gross domestic product (GDP) and 70 percent of the total labor force in Nigeria is also highly protected, it went on.

"The average tariff on agricultural products increased from 26.7 percent in 1998 to 41.4 percent in 2003, and several agricultural products attract tariffs of 100 percent. In addition,import bans have been placed on products, such as wheat flour, sorghum, cassava, and poultry products," said the WTO.

In the mining sector and manufacturing sector, several industries have also been further protected through the imposition of import ban, it said.

"This, somewhat, limits the positive effects of the reforms and Nigeria's benefits from its participation in the multilateral trading system," the WTO noted.

"Therefore, liberalization of Nigeria's trade regime, through the simplification of its tariff structure and the removal of import prohibitions, would promote better allocation of resources in line with its comparative advantage."