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‘Nigeria’s external trade engagements poorly coordinated’

By Omoh Gabriel, Business Editor
Nigerian Non-State Actors (NSAs), comprising the private sector and civil society stakeholders, have written to President Goodluck Jonathan, calling attention and that of the Federal Executive Council (FEC) to what they called” the sordid and most embarrassing discordant tunes sang by various Ministries, Departments and Agencies (MDAs) of the government under your respectable administration, especially in relation to external issues, and particularly with regard to trade negotiations at bilateral and multilateral levels.”

The body, in a memo to Mr. President, signed by the National Association of Nigerian Traders President, Ken UKAOHA, said, “Arising from a two-day workshop on review of the ECOWAS Common External Tariff (CET) and its implication for the private sector in Nigeria, and indeed the Nigeria economy, we observed that the incidence of poor, and sometimes complete lack of coordination in the Nigeria’s trade policy process such as the CET plays out in the country’s external trade engagements to the humiliation of the nation.

“We therefore wish that Mr President pertinently and personally addresses this issue at the Cabinet level to ensure that the interest of the nation is adequately protected in international and regional trade and economic negotiations and fora.

“In dealing with this issue, Mr. President, the important question is about which government Ministry, Department or Agency has the responsibility of representing the nation’s position in particular fora or processes. It is a fact that the Ministry of Foreign Affairs is the custodian of the country’s foreign policy. However, due to the multifaceted nature of most international engagements- covering political, economic and social fields, it becomes imperative to properly define the responsibility of all government MDAs in particular processes.

“We shall illustrate the point by reference to some processes the country is involved in at the regional (ECOWAS) level and the international level.

The first is the process of negotiating the Common External Tariff (CET) for West Africa. Mr President, you may recall that our great nation Nigeria made the initial commitment to adopt a CET for the region (based on the existing rates and bands applicable in the 8 ECOWAS francophone member states forming the West African Economic Monetary Union (WAEMU or UEMOA in French) ) by a political statement made by the then President Olusegun Obasanjo while on an official function in Accra, Ghana in 2005.

“This commitment was perceived by the technocrats as being inappropriate and moves were initiated to circumvent the commitment. The basic reason being that the CET applicable in the UEMOA countries was deemed not being appropriate for the trade and industrial policy objectives of Nigeria and that if the region was going to adopt a CET, then the interest of Nigeria as the most industrialized country in the region ought to be taken into consideration by providing adequate tariff protection for local industries.

“This view led to Nigeria’s proposal of a five-band (as opposed to the existing UEMOA four-band) tariff structure with the additional fifth band attracting a rate of 50 per cent (as opposed to the 20 per cent maximum for the UEMOA four-band structure). Mr President, coming back to the issue of coordination, there are about four Ministries involved in economic/trade aspect of the regional integration process. These are the Ministry of Foreign Affairs (which has the Department of Regional Integration), the Federal Ministry of Commerce and Industry (FMC&I), the Federal Ministry of Finance and the National Planning Commission (NPC).

With respect to the CET, the Ministry of Commerce and Industry and the Ministry of Finance are the two Ministries whose policy responsibility at the national level cover the process. While the Ministry of Foreign Affairs ought to provide the general political direction of the integration process, these other two ministries (Commerce and Finance) need to work seamlessly and technically in representing the nation’s interest in the negotiation processes.

“Mr President, unfortunately, what we have today is a situation where the three Ministries seem not to understand the limit of their mandates with respect to particular processes. The result in most cases is that the official sitting in such Committees or meetings is not able to authoritatively present the country’s position such not been within his area of competence or knowledge. We must point out here that the ECOWAS Commission may send out invitation for certain meetings or processes based on their understanding of who should be responsible for such at the national level.

“It is therefore, the responsibility of the Ministry receiving the invitation to channel it to the appropriate Ministry or even Agency whose mandate it is to handle such matters. This is the whole crux of the matter. Still on the CET process, tariff policy in Nigeria is the responsibility of the Federal Ministry of Finance, with inputs from the FMC&I.

However, due to the fact that the regional negotiation process has a lot to do with trade and industrial policy, and because it was also closely tied to the EPA negotiations, the FMC&I was de facto Nigeria’s representative in the process with the Ministry of Finance involved at the level of the technical committee in charge of harmonizing stakeholders’ positions at the national level. Unfortunately, at the same time that Nigeria has put forward a demand for the 5th tariff band of 50%, the Federal Ministry of Finance also set machinery in motion to review the tariff book.

The FMC&I through the Technical Committee on the EPA conducted series of studies and consultations with stakeholders aimed at justifying Nigeria’s demand for a 5th band at 50.

“Obviously, there was no meeting point between the process being pursued by the FMC&I and that of the Federal Ministry of Finance, even though the latter was part of the Technical Committee (this raises another issue as to who or what level of officials represents a Ministry in inter-ministerial committees). According to the reports, in a regional negotiation meeting in February 2008 in Nouakchott, Mauritania, that while the Nigerian delegate was still insisting on their demand for a 5th band at 50 per cent, the Federal Ministry of Finance released the new tariff book (2008-2012) and pegged the maximum tariff at 35 per cent. The other member countries from the UEMOA bloc were only too happy to flag the news to the Nigerian delegates, and the embarrassment can only be imagined! This is the result of two Ministries working in an uncoordinated manner.

“Mr President, perhaps this absurdity was taken to another height in the negotiation of the bilateral trade and investment agreement between Nigeria and other D-8 countries. We were embarrassed to notice that for whatever reasons, the process was being driven by the Federal Ministry of Science and Technology. The only way to explain this is that the proposal might have been put on the table in a meeting attended by the Ministry. However, the right thing would have been for the Ministry to have passed it on to the FMC&I for appropriate action.

Rather, the Ministry of Science and Technology continued to lead the Committee with the Federal Ministry of Commerce and Industry as a participant. In fact NACCIMA has reported that it took the intervention of the other D-8 countries to bring NACCIMA on board as the major driver of the process as is obtainable in other member countries of the group”.


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