EU’s offer of a minimum of €6.5 billion of trade development assistance every five years till 2035 will assist Nigeria boost its ECOWAS trade operations, writes Nwakaego Ohaegbulam
The European Union has said that a large number of Nigeria’s economic policies in operation, contradict the basic rules of the Economic Community of West African States, ECOWAS trade operations in the sub-region.
Speaking recently during a media luncheon to announce the fourth EU-Nigeria Business Forum tagged ‘Unlocking Opportunities for Diversification’, the EU Ambassador and Head of EU delegation to Nigeria and ECOWAS, Michel Arrion pointed out that despite efforts by the ECOWAS in January 2014 to enforce a new Common External Tariff, CET, giving 14 months for member states to comply, Nigeria chose instead to do business as usual in clear disregard for agreements and conventions of the sub-regional umbrella body.
According to him “Nigeria is maintaining import bans against ECOWAS. You can do this outside ECOWAS but not within. You are part of the same community and bound by some rules relating to free movement of goods and people. We have no offensive agenda for Nigeria because we believe that Nigeria and ECOWAS are very interesting places where European or other non-European businesses could invest because there is enough room for investment.”
Arrion said the EU-Nigeria Business Forum scheduled to hold in Lagos on the 5th and 6th of November, would not only bring business leaders and policy makers from the EU and Nigeria together to discuss business opportunities and impediments to investments, but also aims to increase domestic and foreign investments particularly in agribusiness, in with Nigerian government’s diversification efforts.
While giving the assurance that the EU would not invade the West African market with products that could compete with domestic products from Nigeria and other countries in the region, Arrion pointed out that the EU had removed all its export subsidies to the West African market.
Speaking on the Economic Partnership Agreement, EPA, the Head of EU delegate explained that the EPA establishes a partnership based on common objectives and asymmetrical obligations in West Africa’s favour, stressing that all West African exports are granted immediate free-access to the EU.
“In turn, West Africa will gradually reduce duties on 75 per cent of EU imports over a long transition period of 20 years. There are many safeguards to support domestic production, infant industry and food
security and the EU will not use subsidies on agriculture exports to West Africa,” he said.
He noted that according to a World Bank study in 2014 showed an overall positive effect on Nigerian consumers and producers, with very limited fiscal losses, saying that the vast majority of
manufacturing firms actually stand to gain from the agreement. In his words, 95 per cent of Nigerian firms will benefit from lower input prices under the EPA. Helping Nigerian firms’ competitiveness will far offset any negative impacts of the EPA.”
He stated that the EPA will remove all EU tariffs on Nigerian exports, adding that Nigeria currently does not benefit from the agreement because “All countries except Nigeria have an interim agreement with the EPA. The standards remain the same. It is a question of duties and not standards. Neighbouring countries like Ghana and the Ivory Coast are currently benefiting from the agreement. This will present opportunities for increasing exports from Nigeria to the EU and with a wider range of products granted duty free EU access, this should also encourage greater diversification of Nigerian exports,” he said.
He described Nigeria’s policy to ban importation of some specific items as ‘economically unwise’, pointing out that the problem was that the country was not exporting enough products. “You need to import to produce a lot to export. The more you are developing, the more you are importing. 80 per cent of cars in Europe are imported from 40 countries. There is no ban and there is also almost zero import duty,” he said. Continuing, he said there was no plot against made in Nigerian products rather the problem lay in the standard of the products and their inability to be compete with products from other countries while providing value for money.
He emphasized that the volume of trade between Nigeria and EU stood at €36.4 in 2013, accounting for 29.6 per cent of Nigeria’s total trade the same year, pointing out that the forum will deepen understanding of the role that the EPA could play in supporting the diversification of Nigeria’s economy, strengthen EU-Nigeria business relations through identification of opportunities in agribusiness and forging partnerships.
Arrion bemoaned that the concept of economic integration was in reality, not working well especially within the West African sub-region as there was still no free movement of goods and people. Nigeria he maintained must be the driving force of an economic and political integration in the region, saying this is the only investments from the EU and other foreign market can be attracted. “Unless the 15 member states of West Africa do really work together, there will be no growth in that region,” he said
While expressing the optimism that Nigeria would be the driving force of an economic and political integration in the region as this was the only way investments from the EU and other foreign market could be attracted; he enumerated the factors that drive investments to include an enabling environment, peace, stability, governance and institutionalized frameworks, maintaining that a skilled workforce is critical for the emerging opportunities in Africa. `
Be that as it may, as part of its efforts to increase domestic and foreign investments particularly in agribusiness which is line with Nigerian government’s diversification efforts, Arrion revealed that the EU has agreed to provide a minimum of €6.5 billion as trade development assistance for every four years till 2035. This he explained was to demonstrate the EUs strong belief and confidence in the Nigerian market. Said he “the EU will be making strong commitments in terms of financial development assistance. Every five years, we are committed to giving grants, development assistance. EU and the 28 member states have agreed to give a minimum of €6.5 billion for every five years. In the last five years it was €8.5 billion. We are very comfortable to provide this development assistance.”