Nigeria’s private sector does not have a uniform stance on the Economic Partnership Agreement (EPA) as the European Union (EU) intensifies efforts to lure the country to the €16.5 trillion European market, comprising 500 million consumers.
The EPA is a free trade agreement between the 15 countries of the Economic Community of West African States (ECOWAS) and the Europe Union, seeking to enable West African countries access the European market and vice versa, without paying tariffs. Europe is committing €6.5 billion every five years, beginning from 2015 to 2019, including during the 20-year transition period that will end in 2035.
The EU will open its market completely from day one, while West Africa will remove import tariffs partially, over a 20-year transition period once the deal is ratified.
Nigerian manufacturers have been in the forefront of rejecting the EPA, as they say it will weaken the real sector and make the country a dumping ground for stronger European products.
In a recent statement sent to BusinessDay, the Manufacturers Association of Nigeria (MAN), said from all parameters, West African states, including Nigeria, are not on the same level of economic development as any European country and are not in a position to conclude a reciprocal trade relationship as espoused in the trade agreement with the EU.
Speaking at a stakeholders’ meeting held in Lagos on Tuesday, Iyalode Alaba Lawson, national president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said the EPA should be put on hold until Nigeria’s infrastructure challenge is solved, adding that infrastructure, interest rate and the local business environment need to improve before Nigeria will be able to compete with Europe.
However, other members of the Organised Private Sector offer a different position.
“For our brothers in the manufacturing sector, our emphasis should be on competitiveness. We cannot continue to rely on protectionism,” said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), at a stakeholders’ meeting held in Lagos On Tuesday.
“This happened in the auto industry. People said they could manufacture cars and the government moved the import duty from 20 to 70 percent, but today, it’s impossible for Nigerians to buy cars. Where are the cars people say they manufacture? We need to identify our competiveness and rely on it,” Yusuf said.
Shade Bembatoum-Young, owner at African Sustainable SME Export Trade Solutions and vice president of the LCCI, said the EPA would help Nigerian small businesses become internationally competitive, reducing the incessant rejections at European borders.
Nike Akande, president of the LCCI, said the impact of globalisation is inevitable and only firms that are competitive will endure.
Akande stressed the need for government to create an enabling environment to deepen competitiveness of Nigerian firms.
The EPA ensures that for agricultural products or finished consumer goods currently produced in West Africa, or for which the region plans to develop production capacity, West Africa will not reduce its import duties.
The EPA document studied by BusinessDay, shows that West Africa has excluded all the products which are considered most sensitive and currently face a 35 percent duty under the ECOWAS Common External Tariff (CET), such as meat (including poultry), yoghurt, eggs, processed meat, cocoa powder and chocolate, tomato paste and concentrate, soap and printed fabrics, from being imported into the region from Europe.
Thirteen countries of ECOWAS have signed the EPA agreement, except Nigeria and the Gambia. West African leaders also want Mauritania, which is not in the region, to join in the EPA, said Gbenga Obideyi, director of trade at ECOWAS.
Filippo Amato, head of trade and economic sector, the EU Delegation, cited examples with Bangladesh and Madagascar, saying that these countries have emerged as big exporters of textiles, due to trade agreements.
“There are lots of investors and companies in Bangladesh taking advantage of low cost in the country to export to Europe. Madagascar earns $300 million from exporting textiles and textile makes up 26 percent of its GDP, Amato said.
“Nigeria is still paying duties while exporting cocoa. Imagine what exporters will gain if they don’t pay duties. The EPA is removing import duties for raw materials needed by Nigerian industries,” he said.
ODINAKA ANUDU
