[Nigeria Report] Nigeria, West Africa bid farewell to industrialization

Rightly considered, the wide-ranging implications of signing the Economic Partnership Agreement between West Africa and the European Union as it currently stands may mean that Nigeria and West Africa are bidding farewell to the lofty idea of industrialization, self reliance and genuine economic prosperity.

This is because the Economic Partnership Agreement (EPA) as is being proposed is yet to take into consideration the fears of West African negotiators with regards to an inevitable crippling of indigenous productive capacity of the area as well as encouragement of an unprecedented dumping, The Guardian reported.

The EPA, in the main, is meant to bring about free trade between Europe and West Africa. West Africa under the Economic Community of West African States (ECOWAS) wants a counterpart Development Programme (DP) envisaging a €16 billion to enable the sub-region protect its economies. The DP carries a 60-40 percentage protection, effectively protecting West African market from dumping while 40 percent is left for European goods import.

The Guardian reported that the pressure on some key leaders of West Africa to sign an instrument that is yet to assuage the fears of the unequalled and disadvantaged partner (West Africa) has reached feverish pitch. And if this happens, Nigeria and much of West African countries would practically be sleep-walking into the future.

This is the worrisome scenario: Any agreement without the DP means that if Lagos State government, for instance, is constructing a road project, the European Union (EU) companies are entitled to bid and it cannot be brought home to them that a certain percentage is being reserved for “our indigenous contractors” because the EU partners can by law, ask that the bid be opened. If they were denied, they could call for the process that produced the award and query the reasons behind the award.

“This is not rocket science. It is common knowledge that factories will be wiped out if goods were allowed to stream in unrestrained. Countries like Nigeria will only be making money from oil to sustain the ministries. Signed as it is, the EPA will put West Africa permanently on life support. They will bring in their chicken, turkey and eggs even imported cow leg, for instance, and we cannot compete,” a competent source from the development community disclosed at the weekend.

The Guardian reported that the implication of this for instance is that while the EU as a block spends €10 billion on agricultural subsidy every year, there is no country in the West African region that has a sensible subsidy scheme (in an era where western-prescribed reform measures are emphasising deregulation and removal of all subsidies). The result, it is feared, is that goods from West Africa would not be able to compete with a partner that a huge market has been opened for. The already struggling factories would fold up, jobs would be lost and future generations would look for products they could otherwise produce if their economic systems were not periled.

Yet, as at today (Aug. 13), 11 out of the 15 member states in West Africa qualify for the Least Developed Countries (LDCs). The LDCs are entitled to export everything but Arms (EBA) to EU. Nigeria does not qualify for the LDCs.

Another sour grape in particular is the thinking by European negotiators that sensitive sectors of trade such as pharmaceuticals must be opened up. But this, according to economic experts, would invariably hurt Nigeria’s economy. Over the years, Nigeria has managed to remain active in the pharmaceutical products manufacturing, often exporting products to other countries in the region and beyond. Whereas, the Francophone countries are almost completely inactive in this regard depending almost entirely on importation that mostly comes from France.

At the recent 40th ordinary session of the heads of state and government, the leaders issued in their final communiqué a prodding on the EPA underscoring “the urgency for both parties to rapidly conclude a development-oriented agreement by demonstrating greater flexibility and goodwill.”

But curiously, there was no voice to reiterate the DP, which ECOWAS is insisting on spurring the raging fear that Nigeria is lukewarm and is sleeping on the wide-ranging implications of signing the EPA as it is.

Ghana and Cote d’Ivoire have already signed an interim EPA agreement for survivalist reasons in the export business with Europe and the rest of the world. Although Nigeria that is waited upon by other smaller countries to take the lead, did well not to be stampeded with the interim agreement, but now, she is perceived by development watchers to be “sleeping.”

Eyebrows are now being raised over the role that the so-called “Francophone connection” would play in the “sell out of West Africa.” The current Chairman of the authority of heads of state of ECOWAS Alhassane Ouattara and the President of the Commission, Ambassador Desire Ouedraogo, are both Francophone.

Ouedraogo, is from Burkina Faso, a country whose President, Blaise Compaore, is a well-known strong ally of France. Conversely, the Anglophone presences of former presidents of the commission, Mohammed Ibn Chambas and Victor Gbeho both from Ghana have since been exited.

Yet, the EPA regulation says the ECOWAS president should be assisted by the West African Monetary Union (UEMOA) counterpart in its operationalization. Impeccable sources said that Cote d’Ivoire, the country of the chairman of the ECOWAS authority (Ouattarra) is currently under severe pressure from the EU and particularly France, riding on the interim agreement already signed to lead West Africa into quickly signing the EPA.

The eight Francophone-member UEMOA was formed in 1994 with headquarters in Ouagadougou. It is regarded as a sub-regional grouping with most states having an overlapping membership of the Regional Economic Communities (RECs) just like Mano River Union comprising Liberia, Sierra Leone and Guinea. The UEMOA represents the Francophone zone of the region whereas there is no such Anglophone zone. Thus there exists a divided West Africa within an ECOWAS banner.

According to the documents obtained by The Guardian, the EU’s position on the matter is that market access should be along the line of Article 24 of the General Agreements on Trade and Tariffs (GAT). The essentials of that include the provision that when parties are negotiating a Free Trade Area (FTA), they must be ready to liberalise Substantially All Trade (SAT) but watchers of global exchanges and development maintain constantly the definition of SAT always depends on which side of the divide a party is standing.

In the EPA negotiations, the EU’s standpoint is that West Africa must open its market by a minimum of 80 percent or more. The European block had earlier also called for the scrapping of the ECOWAS 0.5 percent community levy. But  West Africa has supply side constraints due mainly to un-competitiveness or the supply of poor quality products; there is also a high cost of poor infrastructure which in turn results in high cost of doing business. This has since created a situation of a morbid fear of dumping. Europe has 731 million people while West Africa has approximately 282.5 million with a regional Gross Domestic Product (GDP) of $142.9 billion.

West Africa’s position has been a demand for 60-70 percent liberalisation subject to simulation result of the potential impact of this level of opening of the market on the economy of West Africa. But after series of simulations, West Africa has now come to agree to open a maximum of 60 percent of its market; and this is where the major divergence is. Why negotiations stopped..

Development experts also do not see a future if the EPA is signed without ED. Speaking to The Guardian on the matter, analyst of political economy and international relations, Dr. Nwangu Okeimiri said: “Of course, Nigeria must take leadership in this regard also. This country simply cannot close its eyes on all the moves going on particularly with the external manipulations of the French West African countries.”

On what to do, he continued: “Nigeria must act on the intelligence reports at her disposal. We do not want this kind of inertia to continue only for ministers and those charged with the responsibility of protecting the interest of this country and generations unborn to come on stage later and be rationalising what played out. The government of Nigeria must be proactive and assertive even in this matter. This country has to be doubly watchful.”

The EPA started in 2003 but took off effectively with the Accra roadmap in 2004. The Cotonou Partnership Agreement (CPA) of 2000 was meant to be an interim agreement while negotiations went on and ought to have ended in 2007.

Observers feel the EU ought to soften its stance with West Africa because even the World Trade Organisation (WTO) model of compliance which it is relying on for its negotiations with West Africa is currently stalled with the Doha round.

Uwalaka Temple U.B Intern Reporter news@theasian.asia