.
Honourable Chairman,
Ladies and Gentleman
I know of the electric power supply and distribution problems in Nigeria. Power or energy, so to speak, lies at the centre of economic activities and is an indispensable force driving all economic activities. It is therefore counter-intuitive to think of a genuine revitalisation strategy for the Nigerian Manufacturing sector without fixing the appalling state of the epileptic power sector. Nigeria’s power woes urgently call for additional investments based on efficiency and optimisation strategies. Efficient power supply and distribution is the sine qua non for any meaningful strategy you may envision on the revitalisation of the manufacturing sector.
Adaptation of Technology
Mr. President, I will not be doing justice to my talk if I do not address the crucial role of technology in the development equation of the manufacturing industries. A seasoned economist once argued that “Development gap is indeed a technology gap”, and I can’t agree more. The ability to create, acquire and adapt new technologies is a critical requirement for competing successfully in the global marketplace and is very lacking in Africa. It is also a well-documented fact that the African continent has not kept pace with technological advancement and Nigeria is no exception. Africa's technological gap accounts for its increasing economic deterioration because other developing regions are constantly upgrading their own technological capabilities, and the global marketplace has become increasingly liberalized and competitive.
The Private sector in Nigeria, of course in collaboration with the Government at all levels, need to examine the “technology system” obtaining currently in the country to determine how best it is suited to facilitate transfer of technology, as well as enhancement of absorption capacity and its use, especially in the manufacturing industry. Nigeria needs to invest more share of its GDP in Research and Development (R & D) as well as in the acquisition of quality technology to drive the manufacturing (Industrialization) processes. Nigeria as the largest populated country in the whole of Africa can leverage technology to make quantum leaps in production of goods for the ECOWAS region and beyond. It will take a commitment from both the Federal Government and the private sector to find the right technological solutions to the many challenges the country is confronted with. I would suggest that Nigeria looks more to China to tap into their vast knowledge in the development and application of advanced but affordable technology for the production boom. Nigerian businesses should aggressively pursue partnership with Chinese businesses that are willing to invest and provide technology transfer agreements. Over time, Nigeria through the pivotal role of MAN can become the next global production hub after china, Thailand and Vietnam.
Effective Trade Policies
Mr. Chairman,
Distinguished Invited Guests,
Ladies and Gentlemen,
This is another area that I think we ought to tread very carefully if we are really serious about our industrialisation drive. Effective trade policies would encourage local manufacturing companies to build better products to compete not only in the regional but also international markets. While our aspiration to pursue development through trade without aid is as ideal as ambitious to any responsible government, the present global paradigm is unfavourably structured for Africa and whether by design or by default, it serves to ensure that we don’t achieve those aspirations and we remain perpetually dependent. Let us seek reprieve from the wisdom of our Yoruba ancestors. “He who disappoints another is unworthy to be trusted”!
At this juncture, I want to thank you immensely for your correct standing on EPA. Your President calmed my nerves in his speech when he confirmed that the position has not changed. Some of my European friends are not very happy with me when I characterise EPAs as the modern day equivalent of the Berlin Conference Treaty. While the Berlin Conference of 1884 to 1885 balkanized Africa among 13 European powers as a guaranteed source of raw materials and market, how are the EPAs different from that? In reality, Africa negotiated these EPAs under unprecedented economic duress and coercion. In the process African governments were arm-twisted into glossing over some very pertinent aspects of the agreement essentially for EU’s economic expediency.
The common element at both Berlin and Brussels is that Africa is not allowed latitude to conduct trade, industrial and development policies for her own development but for the development of Europe. I am aware that most of African Trade Ministers have privately and tacitly rejected the EPAs, but in fact they have acquiesced. In private whisperings, not many Africans or policymakers are happy with the deal, but there is a certain sense of helplessness. the European Union (EU) has been negotiating the EPAs with the Africa Caribbean and Pacific (ACP) countries a fully reciprocal trade arrangement between EU and ACP to replace the previous non-reciprocal, preferential trade access of ACP countries to EU. While the exploitation and looting of Africa’s enormous natural resources during the colonial and immediate post colonial times is histrory, we cannot simply take it as a misfortune borne patiently as though it had not been. We must be driven by the plea of the Hausa proverb: It is to stand up that one changes from sitting!!
Distinguished invited Guests,
Ladies and Gentlemen,
While in the region where I am coming from, some of us are considered as lone crusaders against the EPAs, what gives me twinges of disquiet is the effects these agreements will have to our ambition to industrialise, economically integrate, and develop sustainably.
We were told that in order to continue to have access to European markets, Africa is required to eliminate tariffs on over 80% of imports from the EU. In some cases, they will have to abolish all export duties and taxes; in others, countries can retain existing export taxes but not increase them or introduce new taxes. They will be called upon to eliminate all quantitative restrictions and meet all kinds of other intrusive and destructive conditionalities that literally tie the hands of African governments from deploying the same kinds of instruments that all countries that have industrialised applied to build competitive national economies.
To me this is an invitation to commit economic suicide and you have made the right call to reject the EPAs. The key principle underlying them is the market access based on reciprocity.
There are a range of effects that EPAs will have on your and my economy. Let me just mention three:
First; EPAs will put your regional trade and integration at risk. You will find that most of the products that you are producing locally are in fact traded regionally in ECOWAS. If you acquiesce to the EPA and its corollary liberalization, EU competitiveness will certainly jeopardise you regional trade. EU products are likely to flood your market and displace domestic and regional production.
Second; EPAs also oblige your governments to undertake significant reforms and design and create new policies which will have significant costs attached, including adjustment costs and revenue loss as a consequence of tariff elimination. In our region, the EU has vehemently refused to include a Development Matrix in EPA. Instead, the burden of assembling Development Capital is left to the recycled, unreliable, and cumbersome European Development Fund (EDF), and the Aid for Trade (AfT) Programme.
Third; the elimination of tariffs will also have an adverse impact on state revenues. In the case of my country Tanzania, for example, a modest estimate on current trade figures is that tariff losses could be up to 62 million US dollars a year. As for export taxes, against the strident objections by many African countries, the EU continues to insist on their being eliminated. I find it logical to view this insistence in tandem with the EU’s Raw Material Initiative launched in 2008. This initiative states unequivocally that “access to primary and secondary raw materials is a priority in EU Trade and regulatory policy.” Yet it is a known fact that export tax is a sine qua non of the promotion of higher value added activities and the beginnings of industrialization.
I have spoken at length on EPA because I am very passionate about this subject, but also very disheartened by the helplessness and hopelessness we as Africans, have been demonstrating during the negotiations despite the very vivid and apparent effects that they may have to our development aspirations. I am pleased with your position. In our region, even my country has retreated and is currently undertaking a detailed study of the agreement in order to make an informed decision. In reviving your manufacturing sector. I only have one final exhortation: STAY AWAY FROM EPA; the agreement is antithetical to the industrialization aspirations that you have. The Igbo people have an age-old saying: “Taking thought is strength” Take thought.
Hon. Chair,
Distinguished Invited Guest,
Ladies and Gentlemen
In conclusion, I want to thank you again for the hospitality you have accorded me since my arrival and for the invitation to join you in this very important meeting. I know Nigerians have the “Can Do” spirit of entrepise. Your domestic market is large enough to enable your local industry to achieve economies of scale. If you add the ECOWAS market in the equation, the trade opportunities are even more lucrative to attract both domestic and foreign direct investments which are critical to long term balanced development. Intra-regional and intra-Africa trade should be the way to go before we as Africans can venture head on into the global trade.
I know you can do it and I believe you can do it.
Thank you for your kind attention.
Bladwijzers