Nigeria and PAGE

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I recently visited Nigeria as part of an International Office trip to promote our postgraduate courses. This involved a number of student counselling sessions to talk with potential applicants, as well as a lecture on the Africa-EU ‘partnership’ held in Lagos. In addition, it included talks with staff from a number of academic institutions including Bingham University; Lagos State University; University of Lagos; Lagos Business School; University of Ibadan; Lead City University; and Babcock University. This enabled discussion about our postgraduate provision in IR, IPE, and Peace and Development with figures including a university Vice-Chancellor, Heads of Departments, and a Head of International Liaisons. Staff members expressed a genuine interest in our postgraduate courses and were also keen to learn more about PAGE research activities in terms of future collaborations. For instance, Sophia Price and I have been invited to contribute a chapter on neo-colonialism to a book on Transnational Democracy edited by an academic from Lead City University in Ibadan.

The visit also allowed me to undertake preliminary research investigating the impact of EU free trade agreements upon local industry in the Nigerian context. This complements my previous fieldwork in Uganda, Kenya and Tanzania in the flower, textiles and coffee sectors respectively. Specifically, I was able to meet with stakeholders in the Nigerian cocoa sector to explore the meaning of Economic Partnership Agreements (EPAs) with the European Union for livelihoods and economic prosperity in this strategic site of private sector activity.

Interestingly, Nigeria refused to sign an EPA when the original deadline expired at the end of 2007. This stands in contrast to neighbouring countries such as Ghana which acquiesced to so-called “interim” EPA agreements with the European Commission. Accordingly, Nigeria defaulted to a less generous scheme for access to European markets known as the Generalised System of Preferences (GSP). This had the effect of raising tariffs (taxes) upon processed Nigerian exports entering European markets. For example, Nigerian cocoa processors now face tariffs of around 6-7% of the total value of their product, compared to the 3.5% which Ghanaian processors maintained as part of interim EPA arrangements. Nigerian exporters in sectors such as cocoa processing now experience a de facto competitive disadvantage in relation to other West African states that fell into line with the EPA stipulations as laid out by their EU counterparts.

Significantly, however, producers in import-competing sectors such as textiles or cement in Nigeria remain protected – since the Nigerian government’s refusal to sign the EPA means that they retain policy space to levy high tariffs against competing products emanating from the European Union. Nigerian producers in these import-competing sectors therefore do not face the imminent prospect of EU goods being “dumped’’ onto their market, thereby avoiding the adverse effects of lower domestic prices and subsequent deindustrialisation. Exporters in Nigerian cocoa processing experience a penalty for their government’s non-signing of the EPA whilst import-competing sectors maintain viability, given their on-going protection against European competition. This is the quid-pro-quo which the Nigerian government has chosen to accept – given their (well-founded) scepticism as to the developmental impact of premature free market liberalisation.

One senior stakeholder in the Nigerian cocoa processing sector who I interviewed during the trip usefully pointed here to the cynicism of EU trade policies. In particular, he pointed to the European Commission’s non-imposition of duties upon raw cocoa bean exports entering into EU markets, compared to the hefty tariffs placed upon higher-value processed goods including cocoa butter. EU officials were seen to have historically encouraged exports of unprocessed raw materials from Africa to Europe on a colonial pattern of trade, while discriminating against higher value goods that might compete with European industry. Moreover, he explained that the impact of EPAs in West Africa is “killing local industry” and that market liberalisation in relation to European competitors would be economic suicide for Nigeria – “look at it in the long term – there is no economic benefit – we are not in the position industrially [or in terms of] cost advantage and infrastructure” to compete. He also remarked of the Africa-EU “partnership” that you “cannot be friends with somebody when you are not an equal” and insisted that any EU Aid for Trade monies should be delivered well in advance of the signing of EPAs. African exporters – such as those in Nigeria – would need to attain the competitive level of their European counterparts before it would make economic sense to sign a free trade agreement. Therefore, EU promises to provide Aid for Trade funds after the signing of EPA arrangements were not deemed beneficial to the economic development of African states.

Moreover, concerns about EU trade policies were shared by another senior stakeholder who I spoke with during the trip. He confirmed that “the EPA is a big thing affecting processors – our exporters face 7% tariff compared to Ghana’s 3.5%. It is affecting reinvestment – [we can’t] grow the farms – the processor is suffering – 40% are not profitable and it has become difficult to provide social responsibilities for the farmers too – everyone is fighting for survival”. This stakeholder also explained that it was becoming more and more difficult to encourage younger people to enter the sector, given the sector’s precariousness in light of EU trade policies, as well as the dominance of oil exports in the broader Nigerian economy.

Overall, the trip to the Nigeria was very worthwhile and enabled me to talk with potential students, to meet with academics from Nigerian institutions and to undertake field research in the cocoa sector. This research on processed cocoa exports will continue as part of the Global Inequalities cluster and will inform my future publication on Africa-EU trade relations. For existing publications on such issues please see http://www.leedsmet.ac.uk/research/dr-mark-langan.htm

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