The manufacturers in Nigeria are upset about the bid of Morocco to join the Economic Community of West African States. ANNA OKON writes on this latest fear and the reasons for it
The opposition that followed the Economic Community of West African States’ decision to approve Morocco’s application to join the ECOWAS has been very resounding in Nigeria, a leading member of the community.
Morocco applied to join ECOWAS after it re-joined the African Union which it exited in 1984 when that body recognised Western Sahara as an independent state.
Following the approval of the application by ECOWAS, Nigerians both in the real and public sectors had risen in one voice of opposition to the idea of Morocco joining ECOWAS.
During a public hearing in Abuja on the ‘Review of Nigeria’s Membership of ECOWAS in View of the Clamour to Admit Morocco into the Community,’ members of MAN, Falana (SAN); a former President of the Academic Staff Union of Universities, Prof. Dipo Fashina; a former Director-General of the NIIA, Prof. Bola Akinterinwa; and members of the Association of Retired Career Ambassadors of Nigeria all united in opposing Morocco’s admission into ECOWAS.
At the hearing which was organised by the House Joint Committees on Foreign Relations and Cooperation/Integration in Africa chaired by a member from Abia State, Nnenna Elendu-Ukeje, the stakeholders gave reasons ranging from border to security issues and trade disparity for their rejection of Morocco’s membership.
Manufacturers had on their part anchored their rejection of the membership of the North African country of ECOWAS on the fear of being crowded out of the market by cheap foreign products.
The President, MAN, Dr. Frank Jacobs, had been consistent in his opposition of Nigeria appending its signature to the EPA fearing that goods from the advanced nations would crowd out local products.
His concerns were based on the fact that infrastructure challenge had left Nigeria’s manufacturing sector at a perpetual state of infancy.
According to Jacobs, any agreement that opened Nigeria’s markets to foreign goods would render the local industry vulnerable and signal death to the economy as well.
Also, former president of Tanzania, Dr. Benjamin Mkapa, had counselled Nigeria against entering into trade treaties that would spell danger to local industries.
Speaking during the 2017 MAN Annual General Meeting, Mkapa advised against modelling African industrialisation after the structure of the civilized nations adding, “We should not think that we ought to follow a similar path to the one that industrial economies have followed, and ignore areas where we have comparative advantage.
“The structure of our economies portrays one undeniable fact, namely that the entry point to Africa’s industrialisation dreams is only through the primary sector using the resources that we have in abundance.
“We have the possibility of leap-frogging the developed world by designing industrial policies that do not replicate their mistakes but also hasten our industrialisation process. The only safeguard is that we should be careful and inquisitive enough to draw lessons from history and thence recalibrate our industrial development strategies based on our domestic realities and global trends.”
According to him, this reorientation would be necessary in view of the fact that the resource base which others had used in the past to build their industrial base had changed.
He added, “Colonialism was used to ensure reliable supply of resources for industries in the West to flourish. It is not only counter-productive but also impossible to aspire to mould any industrial growth strategy based on similar overt, dependent and exploitative arrangements.
“The geopolitical environment is vastly different from the past and demands us to relentlessly be on guard against machinations and overtures that mean more harm to us than good. EPAs are classic cases.”
The former Tanzanian leader noted that the problem of unreliable power supply and high cost of power, high cost of borrowing, increasing competition from often cheap and low quality imports from Asian countries; and inability to fully adapt to modern technologies were not problems limited to Nigeria alone, but almost all African countries.
Speaking to our correspondent, the Director, Economics and Statistics, MAN, Mr. Oluwasegun Osidipe, stated that Morocco’s full membership of the ECOWAS would imply signing the EPA through the back door.
“It is noteworthy to state that the envisaged injury which the present form of EPA could cause Nigeria, particularly the manufacturing sector, will also occur if Morocco is admitted into the community as a full member. MAN, therefore, urges the Federal Government, ECOWAS Commission and other stakeholders in the Nigerian economy to reject the application.
“Morocco is a member of the Union for the Mediterranean which comprises 28 countries from European Union. Granting this same country membership of ECOWAS affords 28 countries from European Union free access into the regional market thereby flooding the market with EU products.”
The Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said the reservation from the real sector stemmed from the fact that the North African country had signed other treaties with the European Union and other countries which had already exposed it to some trade flows that conflicted with ECOWAS interest.
He said the country was not also contiguous adding that the beauty of being a regional bloc was that the countries in the union shared boundaries and Morocco did not share boundary with any of the ECOWAS member states.
Yusuf, who had earlier noted that the fear over EPA was exaggerated, added that EPA was different from Morocco’s membership.
He pointed out that local products faced greater risk of overcrowding by Asian rather than European goods which were not as cheap as the ones from Asia.
EU Ambassador and Leader of the EU trade delegation to Nigeria, Michel Arrion, had during an interactive session with the Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture, assured the association that the EU treaty would be to the benefit of Nigeria.
Arrion argued against the notion that if the EPA entered into force, the Nigerian market would be flooded by cheap European products.
He said, “This scenario cannot occur for several reasons. First, European products are not “cheap”: even if they were imported to Nigeria duty free, European products would still be more expensive than several products produced locally or imported from Asia.
“Second, the EPA has been negotiated in a way to reduce any risk of a possible negative impact for West Africa. Indeed, the main objective of the EPA is to support, not to undermine the economic development and industrialisation of West Africa. To make sure that such objective can be effectively achieved, the EPA gives more obligations to the EU than to West Africa, and more rights in favour of West Africa than the EU.
Examples are; First, while the EPA requires the EU to completely remove tariffs and quotas on imports of any good from West Africa, West Africa is allowed to keep tariffs up to 35 per cent on several goods imported from Europe, particularly on goods belonging to the sensitive sectors, such as agriculture, food and beverages.
“The EPA provides this protection in favour of West Africa for an unlimited period of time. West Africa is required to gradually remove import duties only on capital goods (machinery, spare parts, components, or inputs such as fertilisers, agrochemicals), which are goods that in principle do not compete with locally produced goods, but which are needed by domestic producers and would become cheaper for them as a result of the EPA.
“Second, the timing of the market opening provided by the EPA is also in favour of West Africa: while the EPA requires the EU to immediately remove duties on all imports from West Africa, West Africa’s market opening will be gradual and slow, starting after five years of its entry into force (a transitional period which applies only in favour of West Africa) and gradually taking place for additional 15 years (overall a period of 20 years).
“Third, the EPA improves the so-called “rules of origin” only for West Africa, making it easier to consider goods sourced and transformed in various countries of the region as West African goods benefitting from free access to the EU market. More business will be willing to invest in West Africa moved by the perspective to have easier access to a huge and lucrative market like Europe. “
According to Arrion, in order to ensure that the EPA achieved its objective to support West Africa’s economic development, industrialisation, and job creation, a body called “Competitiveness Observatory” would be established to monitor and assess, based on clear indicators, the implementation and impact of the EPA on the economies of the West African countries.
He added that the EPA provides an “infant industry clause”, which only West Africa (not the EU) can trigger to raise custom duties in case of imports from the EU threatening local fledging industries as well as providing the possibility to review the agreement every five years, allowing Nigeria to address any concern possibly arising during its application, and correct any possible negative impact.
He said, “The EPA is a trade and development agreement. The EU has already committed €6.5bn in development cooperation projects linked to trade, industry, energy and transport infrastructure for Nigeria and West Africa for the first five years of implementation of the EPA. Similar funds will be committed throughout the whole EPA implementation process.
“The EPA provides for enhanced cooperation in agriculture, fisheries and food security, by establishing a high-level dialogue on agricultural policies, creating transparency and supporting West African farmers to meet the EU’s sanitary and phyto-sanitary standards.”
The opposition that followed the Economic Community of West African States’ decision to approve Morocco’s application to join the ECOWAS has been very resounding in Nigeria, a leading member of the community.
Morocco applied to join ECOWAS after it re-joined the African Union which it exited in 1984 when that body recognised Western Sahara as an independent state.
Following the approval of the application by ECOWAS, Nigerians both in the real and public sectors had risen in one voice of opposition to the idea of Morocco joining ECOWAS.
During a public hearing in Abuja on the ‘Review of Nigeria’s Membership of ECOWAS in View of the Clamour to Admit Morocco into the Community,’ members of MAN, Falana (SAN); a former President of the Academic Staff Union of Universities, Prof. Dipo Fashina; a former Director-General of the NIIA, Prof. Bola Akinterinwa; and members of the Association of Retired Career Ambassadors of Nigeria all united in opposing Morocco’s admission into ECOWAS.
At the hearing which was organised by the House Joint Committees on Foreign Relations and Cooperation/Integration in Africa chaired by a member from Abia State, Nnenna Elendu-Ukeje, the stakeholders gave reasons ranging from border to security issues and trade disparity for their rejection of Morocco’s membership.
Manufacturers had on their part anchored their rejection of the membership of the North African country of ECOWAS on the fear of being crowded out of the market by cheap foreign products.
The President, MAN, Dr. Frank Jacobs, had been consistent in his opposition of Nigeria appending its signature to the EPA fearing that goods from the advanced nations would crowd out local products.
His concerns were based on the fact that infrastructure challenge had left Nigeria’s manufacturing sector at a perpetual state of infancy.
According to Jacobs, any agreement that opened Nigeria’s markets to foreign goods would render the local industry vulnerable and signal death to the economy as well.
Also, former president of Tanzania, Dr. Benjamin Mkapa, had counselled Nigeria against entering into trade treaties that would spell danger to local industries.
Speaking during the 2017 MAN Annual General Meeting, Mkapa advised against modelling African industrialisation after the structure of the civilized nations adding, “We should not think that we ought to follow a similar path to the one that industrial economies have followed, and ignore areas where we have comparative advantage.
“The structure of our economies portrays one undeniable fact, namely that the entry point to Africa’s industrialisation dreams is only through the primary sector using the resources that we have in abundance.
“We have the possibility of leap-frogging the developed world by designing industrial policies that do not replicate their mistakes but also hasten our industrialisation process. The only safeguard is that we should be careful and inquisitive enough to draw lessons from history and thence recalibrate our industrial development strategies based on our domestic realities and global trends.”
According to him, this reorientation would be necessary in view of the fact that the resource base which others had used in the past to build their industrial base had changed.
He added, “Colonialism was used to ensure reliable supply of resources for industries in the West to flourish. It is not only counter-productive but also impossible to aspire to mould any industrial growth strategy based on similar overt, dependent and exploitative arrangements.
“The geopolitical environment is vastly different from the past and demands us to relentlessly be on guard against machinations and overtures that mean more harm to us than good. EPAs are classic cases.”
The former Tanzanian leader noted that the problem of unreliable power supply and high cost of power, high cost of borrowing, increasing competition from often cheap and low quality imports from Asian countries; and inability to fully adapt to modern technologies were not problems limited to Nigeria alone, but almost all African countries.
Speaking to our correspondent, the Director, Economics and Statistics, MAN, Mr. Oluwasegun Osidipe, stated that Morocco’s full membership of the ECOWAS would imply signing the EPA through the back door.
“It is noteworthy to state that the envisaged injury which the present form of EPA could cause Nigeria, particularly the manufacturing sector, will also occur if Morocco is admitted into the community as a full member. MAN, therefore, urges the Federal Government, ECOWAS Commission and other stakeholders in the Nigerian economy to reject the application.
“Morocco is a member of the Union for the Mediterranean which comprises 28 countries from European Union. Granting this same country membership of ECOWAS affords 28 countries from European Union free access into the regional market thereby flooding the market with EU products.”
The Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said the reservation from the real sector stemmed from the fact that the North African country had signed other treaties with the European Union and other countries which had already exposed it to some trade flows that conflicted with ECOWAS interest.
He said the country was not also contiguous adding that the beauty of being a regional bloc was that the countries in the union shared boundaries and Morocco did not share boundary with any of the ECOWAS member states.
Yusuf, who had earlier noted that the fear over EPA was exaggerated, added that EPA was different from Morocco’s membership.
He pointed out that local products faced greater risk of overcrowding by Asian rather than European goods which were not as cheap as the ones from Asia.
EU Ambassador and Leader of the EU trade delegation to Nigeria, Michel Arrion, had during an interactive session with the Nigerian Association of Chambers of Commerce, Industry Mines and Agriculture, assured the association that the EU treaty would be to the benefit of Nigeria.
Arrion argued against the notion that if the EPA entered into force, the Nigerian market would be flooded by cheap European products.
He said, “This scenario cannot occur for several reasons. First, European products are not “cheap”: even if they were imported to Nigeria duty free, European products would still be more expensive than several products produced locally or imported from Asia.
“Second, the EPA has been negotiated in a way to reduce any risk of a possible negative impact for West Africa. Indeed, the main objective of the EPA is to support, not to undermine the economic development and industrialisation of West Africa. To make sure that such objective can be effectively achieved, the EPA gives more obligations to the EU than to West Africa, and more rights in favour of West Africa than the EU.
Examples are; First, while the EPA requires the EU to completely remove tariffs and quotas on imports of any good from West Africa, West Africa is allowed to keep tariffs up to 35 per cent on several goods imported from Europe, particularly on goods belonging to the sensitive sectors, such as agriculture, food and beverages.
“The EPA provides this protection in favour of West Africa for an unlimited period of time. West Africa is required to gradually remove import duties only on capital goods (machinery, spare parts, components, or inputs such as fertilisers, agrochemicals), which are goods that in principle do not compete with locally produced goods, but which are needed by domestic producers and would become cheaper for them as a result of the EPA.
“Second, the timing of the market opening provided by the EPA is also in favour of West Africa: while the EPA requires the EU to immediately remove duties on all imports from West Africa, West Africa’s market opening will be gradual and slow, starting after five years of its entry into force (a transitional period which applies only in favour of West Africa) and gradually taking place for additional 15 years (overall a period of 20 years).
“Third, the EPA improves the so-called “rules of origin” only for West Africa, making it easier to consider goods sourced and transformed in various countries of the region as West African goods benefitting from free access to the EU market. More business will be willing to invest in West Africa moved by the perspective to have easier access to a huge and lucrative market like Europe. “
According to Arrion, in order to ensure that the EPA achieved its objective to support West Africa’s economic development, industrialisation, and job creation, a body called “Competitiveness Observatory” would be established to monitor and assess, based on clear indicators, the implementation and impact of the EPA on the economies of the West African countries.
He added that the EPA provides an “infant industry clause”, which only West Africa (not the EU) can trigger to raise custom duties in case of imports from the EU threatening local fledging industries as well as providing the possibility to review the agreement every five years, allowing Nigeria to address any concern possibly arising during its application, and correct any possible negative impact.
He said, “The EPA is a trade and development agreement. The EU has already committed €6.5bn in development cooperation projects linked to trade, industry, energy and transport infrastructure for Nigeria and West Africa for the first five years of implementation of the EPA. Similar funds will be committed throughout the whole EPA implementation process.
“The EPA provides for enhanced cooperation in agriculture, fisheries and food security, by establishing a high-level dialogue on agricultural policies, creating transparency and supporting West African farmers to meet the EU’s sanitary and phyto-sanitary standards.”
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