Friday, 6 March 2015

An European thinks Nigeria is Germany

Nigeria has been cautious about the Economic Partnership Agreement. That’s the agreement waiting to be ratified by ECOWAS member states and the European Union, West Africa’s largest trading partner. If any Nigerian hadn’t heard of the EPA before January 2014,
the Minister of Trade and Investment, Dr Olusegun Aganga, had since popularised it. The minister had taken time to study the document and informed Nigerians that some of the provisions were not in the nation’s interest. That time, the matter made this writer seek the views of a senior member of the EU delegation to Nigeria. The EU delegation in Abuja is responsible for ECOWAS issues, it’s been part of the EPA negotiations over the past 10 years. In the course of an informal chat with Massimo De Luca, the EU’s Counsellor – Head of Trade and Economics Section, in Abuja in 2014, (he has since moved to the EU office in South Africa), this writer drew attention to many of the reservations Nigeria and other ECOWAS member states expressed about the EPA. The views expressed by De Luca (with excerpts here) were not only enlightening, they shed light on the need for nations in the ECOWAS sub-region to operate more as a bloc. Incidentally, he focused more on Nigeria which he considered central if the West African sub-region must enjoy better times in contemporary global economic and trade arrangements.
On what is in the EPA for West Africa’s signatories, De Luca pointed to how and why the EU began as the EEC, as well as how the same drive has spurred the EU to encourage other countries to operate under a regional arrangement. In the case of West Africa, issues domestic and external make regionalism imperative. There’s the need for a larger market that is for the benefit of especially the smaller nations in the region. There’s the angle of security and peace which are better assured if West Africa is integrated. Negotiations leading to the latest EPA are rather economic and technical in nature, although decisions of nations on its provisions tend to be influenced by political considerations in the end. In looking at what signatories stand to gain therefore, the things to check are if ECOWAS has a common vision, how much of the vision is accepted by member states, as well as how EPA can help foster the vision. The EU, De Luca says, intends to use the EPA to assist ECOWAS in achieving members’ desire for a big market and also their ambition to have peace and security in the sub-region. This may not be clear to citizens of West Africa, but forming a regional market is essentially about having a big market. It’s an economic consideration that has the effect of promoting peace “on the assumption that when you allow business to work effectively, then it would be more difficult to go into war”, the EU Counsellor stated.
An official who displayed a good grasp of his working environment, De Luca feels there are reasons to wonder how strong Nigeria’s interest in the bigger regional vision is. This concern is important because Nigeria is fifty percent of West Africa on most indices. He is of the opinion that Nigeria sees itself as the ‘big brother’ in the region but not necessarily as part of a bigger entity. Rather, the priority for Nigeria has been more on how to harness its challenges, and to move on based on its internal strength. That means “the regional integration process is not very topical in Nigeria as far as I understand”, he said. He pointed out that this is unlike Germany for which EU is essential because EU is the biggest market for German products. “Now Nigeria should be the Germany of the region but they (politicians especially) don’t have the mentality. If you look at the kind of trade between Nigeria and the rest of the region, it’s still minimal. Nigeria still deals and trade much more with Europe, China India and US than any part of the ECOWAS region. So in that way, you can question where the appetite to have something regional is.”
No doubt, the appetite will be that it makes sense to have a regional market. It does make sense but it’s not yet a reality. Market players have not established a network of business which would demand greater integration. But De Luca believes the dimension of regional trade is growing partially in the service sector and into the banks. “We have the regional banks. So I think the market is really growing but politically, and this is in the minds of the politicians, I don’t think so. I don’t think politicians are already thinking regionally. How many times has regional integration policy been discussed by the Economic Management Team in Nigeria?” Of course, for smaller countries such as “Benin and Togo, they need the regional market because without the regional market, they don’t have a market. The challenge for Nigeria is to open up its market, and say yes, we are big, we can be much bigger”.
He doesn’t believe in the conspiracy theory that it is “Europe pushing in a certain direction”, using the EPA to achieve its aims while he thinks the reluctance on the part of Nigeria concerning the agreement is linked to its lack of economic diversification. As long as there is no real economic diversification in Nigeria, “the appetite for regional market is going to be very lukewarm”. Nigeria cannot live off oil forever; without diversification the nation will face huge challenges. The EPA, he pointed out, is precisely about diversification. “It’s about moving away from a situation where you trade only in raw commodities like oil”. Even if it is other products, Nigeria cannot do things in its own way if it is going to make it “at the level which is global because manufacturers want to know you comply with international regulations”. According to him, there is the “need to have machines which are internationally accepted, practices which are internationally accepted. You need to produce final products which are internationally accepted. It’s a bit black and white; it’s either you are part of the global trade or you are not. There is no such a thing today of a prosperous Nigerian market which believes it can live with its own rules or without rules…It leads to nowhere; it leads to poverty…You will need to be able to export your finished products to other countries and these countries will accept them only if they are of sufficient quality. Nigeria cannot continue to think it’s big enough not to care about what’s around”.
Nevertheless, for De Luca, “there are many good things happening in Nigeria…There are already standard manufacturers in Nigeria. They produce at a global level. We also have a minister (Dr Olusegun Aganga) who really for the first time has brought the problems to the fore”. That is, if Nigeria wants to industrialise, full sectoral revolution is needed. However, he thinks Aganga still faces a lot of opposition from those who have always benefitted from the current situation, and who don’t see the reason the country should go global. “It’s because these people don’t want any idea of integrating the Nigerian economy into the global market”, and this is because such will require commitment even in terms of trade agreements at the regional level. Making that commitment means a point has to be reached where things move freely across West Africa, and internally that means there has to be a change of fiscal system. “No more customs duty but income tax. It’s a complete revolution”.
This writer specifically asked what De Luca thinks is the reason Nigeria doesn’t seem convinced about the contents of the EPA document as it stands. For him, when Aganga got into office, being a smart and capable minister with a solid career background, he took note that in over 10 years of negotiation, a Nigerian position on the EPA had not been on the table. He also found a few things that Nigerian officials who had handled the EPA before him did not pay particular attention to, so he raised issues about them. This explains the exception the nation took to the EPA so late in the day, he explained.
To be continued

1 comment:

  1. Our leaders. Kill the great dream ot this nation, what a pity Africa

    ReplyDelete