PRESENTATION BY ALHAJI BASHIR M. BORODO, PRESIDENT, - - PDF document

PRESENTATION BY ALHAJI BASHIR M. BORODO, PRESIDENT, MANUFACTURERS ASSOCIATION OF NIGERIA AT THE 1ST ECOWAS BUSINESS FORUM ORGANISED IN GHANA FROM OCTOBER 29-31, 2007 It is a matter of personal delight for me to attend the 1st ECOWAS Business Forum. I wish to express my deep appreciation of the commendable initiative of the Commission of the Economic Commission of West African States (ECOWAS), for organizing the 1st ECOWAS Business Forum here in Accra, Ghana. I also have the pleasure to convey the best wishes of the more than 2000 members of the Manufacturers Association of Nigeria (MAN), to this assembly of West African entrepreneurs. I believe that this Forum will achieve the objectives which informed the invitations to business Associations and trade promotion organizations. I am aware that a similar workshop of West Africa Private Sector which was organized in June 2007 in Cotonou, Republic of Benin, deliberated extensively on some of the issues on the agenda of this Forum and in its conclusions, made far reaching recommendations on measures required to make our sub- region achieve quantum leaps in development and growth. I am optimistic that this Forum will build on the success of the Cotonou Declaration by recommending additional pragmatic actions that would shorten the pace of development that is becoming too late and too far behind other regions at similar levels of development with West Africa less than three decades ago. Distinguished delegates, West Africa faces greater challenges today more than ever before because of

• ur slow start and inadequate responses to the tempo in the global space. In comparison to the

developed and Newly Industrialized Economies, the economic performance of ECOWAS remains too low for positive impacts on the socio-economic conditions of our people. In particular, the industrial sector which is considered the engine of growth in all economies is insignificant by global standards. The manufacturing sector’s share of global value added was estimated at about 0.1% in the 2002-2003 Report of UNIDO. At present 70% of the population of West Africa is tied down in peasant agriculture compared to 3% in the industrialized economies. In order to reverse the not too encouraging status of ECOWAS in global trade, it is very important that we continue to initiate measures to build bridges of development, investment and trade cooperation

• utside our national borders, region and continent.

However, in pursuing this initiative, caution should be adopted so as not to destroy our national economies and our common and shared vision on regional integration. The frenzy of globalization should not be allowed to deepen the wedge which had widened the lack of investment and trade cooperation among countries in our sub-region in the past. Economic Partnership Agreement (EPA) In acknowledgment of the foregoing, I commend the leadership of the Commission of ECOWAS for the pragmatic decision to postpone the conclusion of the ECOWAS-European Union Economic Partnership Agreement (EPA), beyond the December 31, 2007 deadline because of lack of resolution of major issues that are essential for the conclusion of a development driven EPA. From all available analyses, a badly negotiated or concluded EPA can only spell doom for the more than 250 million people and the private sector in ECOWAS. In this regard, no sacrifice is too great to exercise patience and caution in reviewing all proposals from the European Union. The urgent and substantial import liberalization promoted by EPA have the strong potentials to further weaken trade relation which is currently less than 15% among ECOWAS members. It follows therefore that if ECOWAS and other regional groups in Africa are made to liberalize their economies at a faster pace and not in line with their own poverty and development plans, the outcome would further constrain regional cooperation and throw away all benefits associated with regional integration.

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It is for these reasons that the private sector in Nigeria takes serious exception to the acts of intimidation and propaganda from the European Union Commission to stampede Nigeria to swallow hook line and sinker, the bitter pill of EU proposed EPA. It is a matter of regret that the series of paid advertisements published in newspapers in Nigeria by the EU Commission have only helped to cast serious doubts on the sincerity of the Commission with regards to claims of support for global effort to stem poverty in Africa and to assist the continent to achieve her growth and development visions. The recent propaganda action of the EU Commission should be taken as a serious warning and should put ECOWAS Negotiators on alert that fair trade proposed by the EU does not necessarily mean fairness. The lesson to learn is that what is paramount is self interest. The interest of our sub-region should therefore not be mortgaged on the platform of perceived fair trade espoused presently by the EU or that may be proposed by similar regional interests. Federation Of West Africa Manufacturers Associations (FEWAMA) The space provided by the extension of the conclusion date of the EPA should be utilized to mobilize stronger private sector participation in the negotiation process. In this regard, urgent action needs to be initiated to resuscitate regional business Associations such as the dormant Federation of West Africa Manufacturers Associations (FEWAMA) and the Federation of West Africa Chambers of Commerce (FEWACC) to play more active roles in issues that touch on business and economic decisions. The vast and immeasurable human resources in the private sector in West Africa are available to support ECOWAS Commission and should be mobilized for that purpose. In the effort to resuscitate FEWAMA and FEWACC, I believe that ECOWAS Commission has a major role to play in providing the foundation for a fresh start and stabilizing support until the new

• rganizations can stand on their own. This Forum provides a meeting point for us to articulate

measures that would resuscitate these two important institutions. I strongly believe that the new initiative in respect of the integration process should be anchored on active private sector participation. As businessmen, we shall navigate perceived limitations and hindrances. Our call on ECOWAS Commission and our various Governments is to focus on the architecture of infrastructure and regulatory instruments that would facilitate the expansion of investments in the real sectors of agriculture and manufacturing; as well as trade and services. Free Movement of ECOWAS Citizens The success of the integration process is also incumbent on the faithful implementation of the series of protocols signed by ECOWAS Member States. The protocol on free movement of

• ur people within the sub-region is a major issue that is begging for implementation. Free

trade zone cannot be achieved if roadblocks prevent free movement. It will be hypocritical to demand reciprocal visa conditions between ECOWAS and EU if lip service is paid to the implementation of our sub-regional protocol on free movement of people. ECOWAS Common External Tariff (CET) It is pertinent to point out that the review of the Road Map of the EPA also provides our sub-region a good opportunity to revisit the highly contentious ECOWAS Common External Tariff (CET), which we regard as the precursor to EPA. In Nigeria, the looming danger posed by CET has started to manifest across all industrial sectors. MAN had consistently drawn attention to the wrong approach of wholesale adoption of a tariff regime without adequate consultation with major stakeholders and deep studies of the past and prevailing effects in economies where it is operated.

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It is a matter of regret that the CET structure adopted by ECOWAS appears to be the least protective

• f businesses in the continent because it offers less than nominal protection to the investments in

manufacturing industries in the sub-region. In comparison, the tariff bands of East Africa Community and ECOWAS CET are as follows: ECOWAS EAC Necessaries (medicaments, books etc.) - 0% 0% Raw materials and other capital goods

• 5%

0% Intermediate goods and other inputs

• 10%

25% Finished products

• 20%

65% The perverse effects of CET in its final implementation have become worrisome and negative on our agricultural and manufacturing sectors, particularly in sectors where local raw material inputs have reached very high level proportion. In this regard, the rural farming community engaged in the production of grains, cotton, rubber etc face very serious challenges while the food and beverages; textile and garment, poultry, tyre and rubber-related products as well as wood and wood products, to name a few sectors, are equally threatened. I believe that our colleagues from UEMOA States will enrich this Forum by sharing their experiences in respect of the effects of CET in their States since the implementation commenced. The Manufacturers Association of Nigeria is proposing that a review mechanism for CET is imperative. The review should be very comprehensive in order to stem the problems that are imminent. Nigeria has already requested for a fifth band of 50% in order to protect the sectors that are threatened and in

• rder to prevent the looming labour loss and apparent economic and social consequences which are

potential ingredients that could deepen poverty and expand social strife. Need for New ECOWAS Industrial Master Plan If ECOWAS is to move out of the present low level performance and free our sub-region from poverty, it is imperative that we must hasten the regional integration process to build and consolidate supply capacity before opening up our market to other regional blocks outside Africa. In the drive towards integration, ECOWAS Common Industrial Policy should be reviewed to form one of the building blocks for the preparation of a new industrial master plan for the region. The focus of the plan should determine and aim to achieve the following: Provide the Road Map for speeding up regional integration. Eradicate poverty. Promote investments in regional infrastructure, especially as they relate to: . - Electricity and power

• Marine, rail, land and air transport
• Telecommunication

Enlarge the industrial capacity of the region particularly in intermediate and capital goods manufactures. More local value added to agricultural and non-agricultural products to enlarge the export base for manufactured products. Integration of the manufacturing capacity into the regional and global supply chain through sub- contracting, outsourcing and similar manufacturing strategies.

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Creation of stronger development and investment financial institutions to offer banking and insurance services, Harmonization of regional regulatory framework, particularly in the areas of industrial product standards. CONCLUSION Poverty alleviation requires wealth creation. From the experiences of Asia and China, the development

• f productive capacities and production linkages – typified by manufacturing, can bring about sustained

poverty reduction. It is also through developing productive capacities that ECOWAS will be able to compete in international markets in goods and services which go beyond the export of primary commodities. Distinguished delegates, it is important to acknowledge that if productive employment opportunities usually offered by manufacturing and mechanized agriculture do not expand sufficiently for the growing labour force in the sub-region, high level of extreme poverty will persist in West Africa. In acknowledgment of the fore-going, one of the keys to reversing the poor performance of the economy of the sub-region is to create the enabling environment for manufacturing companies that add value to our agricultural and mineral resources to become more export oriented. In conclusion, I believe that regional integration in West Africa is not unattainable. I also believe that with adequate political commitment and cooperation from the present and potential trading partners in various regional blocks, it is possible to create a successful economic and monetary community in West Africa, similar to successes achieved in Asia. ECOWAS economic recovery and development, as well as its ability to be effectively integrated into the world economy are intrinsically linked to its capacity to become an active player in the world economy. In this regard ECOWAS should continue to emphasize the promotion of regional economic integration as a fundamental prerequisite for development. Finally, any multilateral trade agreement that ECOWAS enters into, should incorporate free movement

• f people across regional blocks as reciprocal agreement.

MANUFACTURERS ASSOCIATION OF NIGERIA ACCRA, GHANA OCTOBER 31, 2007