Why Nigeria Has Not Signed The ECOWAS Common External Tariff?

Nwangwu Uba

More facts have emerged why Nigeria has not signed the Economic Community of West African States, ECOWAS, Common External Tariff, CET, five years after it was adopted by the 16 Head of States and Government of member countries including former President Goodluck Jonathan,  in Dakar, Senegal. This is because the CET model may not have favoured Nigeria and the fear of losing the market because of unfair competition with the foreign competitors.  

The  CET model which was said to have been patterned after the UEMOA CET composed of four tariff bands of Customs duty: Essential  social goods, zero percent duty, goods of primary necessity, raw materials and specific inputs,5 percent, Immediate goods, 10 percent and  final consumption goods, 20 percent.

Kadre Desire Ouedrago, a one-time Burkina faso Prime Minister  had said that member countries  will begin the implementation of  the CET in 2015, an indication that the countries  will be paying uniform tariff at all Land Border stations in the sub-region.  That was how far he could go.

Former President Jonathan, who was at the meeting where the CET model was adopted may not have bowed  to pressure from his counterparts  from member countries to sign the  document because of pressures from Manufacturers Association of Nigeria, MAN, not to do so because of the perceived lopsidedness of the document.

The  other ECOWAS member countries  had expected President Muhammadu Buhari, as the Chairman of the sub-regional body, to sign the document as his predecessor could not do it  to give the member countries the encouragement that the Customs instrument designed to harmonise  and strengthen the sub-region common market had come to stay.

Frank Jacobs, President, MAN, may have fired the first shot against  the CET document when he said that as it was currently ”negotiated and structured, ”it would not serve the overall best interest of Nigeria”. Jacobs noted that  the country’s capacity in the sub-region was above 60 percent when compared with the other member countries of the sub-regional body.

 Going by the CET arrangement, Imported  products  attract  zero percent duty , import tariffs on finished drugs, five percent and 20 percent tariff on raw materials and packaging which Stella Okoli of Emzor Pharmaceutical described as an unfair deal.

Okoli noted that Pharmaceutical products manufacturers in West African  countries, are expected to build World Health Organisation , WHO, standard factories, which some of its raw materials  attract  between  20 and 25 percent import duty.  The real fears of manufacturers in the country, particular, drug manufacturers,  about the ECOWAS CET model was their foreign competitors?  

The Emzor boss believes that in a fair market, Nigerian Pharmaceutical product manufacturers would not be afraid to compete with their counterparts from other countries in sub-region who are also into the manufacturing business.   Take for instance in Mali, Republic of Benin, Togo, Coted’Ivoire and several other countries in the sub-region have no major Pharmaceutical Companies, thus making the CET model an unfair market for drug manufacturers. 

Recall that Jacobs, the MAN President , had earlier called for a ‘national urgent decision  that needs to be taken before the final take  -off of the CET model in 2020, which goal post had been shifted several times. The MAN boss had said that if the  government goes ahead to sign the  CET document, Nigeria industrial potentials  and development  would be sacrificed  on the altar of ”uncoordinated  regional integration”. 

Muhammed Uba Garba: Customs Comptroller, Seme Command

At present , Nigeria may be said to be the only country  that is manufacturing at a heavy cost of production, finished goods, whereas  under the ECOWAS CET,  imported finished goods enjoy five percent duty  and between five to 20 percent duties  on imported raw materials and packaging.

 This may have informed the reason why MAN, have been battling the CET model for years, insisting that the government must not sign it as it was not designed to favour Nigerian manufacturers but the other  member countries  of the sub-region which do not produce anything, particular the French speaking countries which France had turned as their dumping ground  for their manufactured goods.

Segun Musa, a Lagos based  Clearing Agent and former Chairman , National Association of Government Approved Freight Forwarders, NAGAFF, may have lent his voice to the views expressed by Jacobs and Okoli, two key members of MAN, when he described the CET  model as an ”unfair document designed to weaken the nation’s economy and  promote the economies of other countries in the ECOWAS sub-region .

 Musa had noted that even when the government had not signed the CET document, many Nigeria based importers had relocated to Cotonou, Lome, Tema, in Republic of Benin, Togo  and Ghana seaports  to take delivery of their goods . The major complaints of Industry stakeholders about Nigeria seaports over the years  had been ”multiple taxation and high tariff,” which they claimed was eating  deep into their profit margin which cost was said to have transferred to the Consumers, thus making nonsense of the government economic policy of reducing inflation in the economy.

 He fears that the mass exodus of importers to other seaports in the West African sub-region to take delivery of their imports may be worse if the government eventually bows to pressure to sign the CET document which major requirement was a uniform tariff. He noted that  it would  give  importers who had been sitting on the fence a chance to abandon Nigeria seaports for any of the neighbouring seaports in the sub-region to take delivery of their goods. 

Investigation by Value News  shows that  with the CET arrangement, it does not matter where the importer may be coming from. The only thing that may be expected at the land border would be to present  the relevant import documents and receipt of Bank statement showing payment of the appropriate duty on the Consignments.  The confirmation of the documents and the payment receipt by Customs officials at the border would guarantee the importer a free exit to his warehouse without delay.   

The USAID,  Japan International Cooperation Agency, JICA,  World Bank , New Partnership For African Development, NEPAD,  and other development partners have been at the vanguard over the years to see to the actualisation of the one stop border post which enjoins importers to pay duties only at a border post instead of multiple border post as obtained in the West and Central African sub-regions.  

As a prelude to the implementation of the CET model and the one stop border post at the land border posts, in the West and Central African sub-regions, JICA, the World Bank, NEPA and the other development partners, in collaboration with the ECOWAS , had organised a 2-day workshop at Accra, Ghana, on the one stop border post, that could save importers from  incurring additional costs in taking delivery of their goods at the land border. The workshop had attracted government and Border officials including security operatives from the two sub-regions.

 One Dr.Anthonia, a Director in the ministry of Transportation , was said to have represented Rotimi Amaechi, the minister of Transportation, Muhammed Uba Garba,  Comptroller, NCS, Seme Command, and other Border officials and security operatives,  were said to have been at the knowledge sharing workshop.

Maritime analysts, however, said there was no  basis for the ECOWAS member countries to worry about being shortchanged  in the implementation of the CET instrument at the land border , noting that the member countries will through it, have a” real  chance of  enjoying  the benefits of a trade boost”.

They argued that if the ECOWAS member countries Head of States and Government could bury their differences and allow the take off of  the CET, which is  an important  milestone  on the road  to the creation  of a Customs Union in West Africa, it  would not necessarily  mean that  goods imported into Republic of Benin or any other Francophone country will be cheaper than those  exported to Nigeria or any other Anglophone country.

In spite of the fact that Nigeria has not signed the ECOWAS CET  document because of some perceived anomalies, Hameed Ali, a retired Army Colonel and Comptroller General, Nigerian Customs Service, NCS,  reportedly said the country  has implemented  over 70 percent of the requirements  of the CET requirements.

Ali alluded to the fact that uniform Customs  duties, import quotas, preferences or other non- tariff barriers apply to all  goods  entering the country, regardless  of the area  the Consignment was imported from. It could be the United States, US, or any of the European, Asian  or African countries, it is a uniform duty. The Customs had told those that care to listen that Nigeria  was presently test running  the CET  and had in the last three years  based all its lines on the model, noting that the country has fared well in the implementation of the CET as it had implemented over 70 percent of it. He is optimistic  that by the time the nation will join other ECOWAS  member countries  to start full implementation of  the CET model, the country  would have reached the maximum percentage . ”We are doing well  in terms of Codes and regulatory  aspect of the CET model”, the Customs boss had said.

Given an insider information, he reportedly confirmed that the country receive goods  from member countries  with zero duty and have transit  measures that are being adhered to with these countries.

To ensure hitch-free implementation of the CET model, Ali, the Customs boss, was said to have called for increased  Cooperation of the Customs officials at the land border stations including other security operatives, in an” efficient and transparent manner”.  He urged member countries to strengthen security at the borders  to promote business friendly sub-region as obtained at the Seme- Krake joint border between Nigeria and Republic of Benin.There is no gain saying the fact that  the land border routes in the West Africa are getting increasingly  assaulted  and weakened  by the criminal   activities  of smugglers , drug trafficking and armed bandits. The situation is worse in the north east where Nigeria share common boundaries with Niger and Chad which Boko Haram insurgents had used over the years to penetrate the region and wreck havoc on the people.

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