After supporting Morocco’s admission, Nigeria is mulling to leave Ecowas

The economic community for West African states- ECOWAS came into existence in 1975, with the idea of bringing together all the states in the West African sub-region together in cooperation, self defense and share common socio-economic cum political advantages.

The aim of the regional economic grouping among others is to promote cooperation and integration, leading to the establishment of the ECOWAS Trade Liberalization Scheme (ETLS) The ETLS was to establish a free trade area where enterprises of Member States may move goods within the ECOWAS bloc without paying duties and levies but today, one of Africa’s strongest regional body that attracted application from Northern Morocco to be admitted is facing its biggest threat.

Since last year, the Nigeria Senate had urged the Nigeria Federal Government (FG) to suspend, the ECOWAS Trade Liberalization Scheme (ETLS) and ECOWAS Common External Tariffs (CET) that Nigeria entered into in year 2000 similarly to the BREXIT struck by the United kingdom with European Union.

However the Economic Commission of West African States, ECOWAS, had said Nigeria is a major beneficiary of ECOWAS Trade Liberisation Scheme, ETLS, stressing that it controlled more than 40 percent of trade in the region and Nigerian businesses and products remain the biggest beneficiaries of the scheme.

But the Nigerian legislature is accusing the scheme of “abuse of customs’ tariff and indiscriminate issuance of fiscal policies. A Nigeria Senator Hope Uzodinma, had also maintained that the country needs to protect her national interest. A Senate committee had blamed the exit of companies like Michelin, Cadbury, UAC and others from the country on the ECOWAS protocols.

The Central Bank of Nigeria (CBN) and other stakeholders however refuted the claim. They added that the overriding factor for their exit was lack of electricity to run their high capacity equipment.

The lawmaker also blamed the infiltration of foreign rice into the country through the borders on the instrument, but again stakeholders were quick to slam that and instead blamed same on the lack of capacity by the Nigerian Customs Services which is saddled with the responsibility of checking what comes into the country.

The former Head of State of Republic of Niger, and president of the task force on ETLS, General Salou Djibo, said the seven-member task force for the instruments drawn from Nigeria and other member states, would monitor the effectiveness of the protocol, adding that it would also be on a fact finding mission, as well as, go all out to step up advocacy.

What will happen if the Senate committee should have their way?

Although there are bottlenecks around the ETLS which have made the scheme unpopular and largely unknown. Rising from a workshop organized by Deloitte and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) recently, Some of the bottlenecks which businesses have faced whilst implementing the scheme where highlighted and includes:

long delays in obtaining a Certificate of Origin (CoO) from the National Approval Committee upon submission of an application; refusal by customs agencies of some Member States to honor valid CoOs; where valid CoOs are honored, delays by the customs agencies of Member States in facilitating the clearance and transit of goods to the next border crossing; customs agencies of some Member States validating CoOs at a national level instead of vide the EC who would be able to confirm legitimate CoOs.

But If the Nigerian Senate should come through with this, Nigeria’s largest companies and Banks could face major losses are they are currently exporting – duty and quota free, locally manufactured products to over 350 million people within the ECOWAS bloc.

Nigerian companies which could be severely affected due to their presence in almost all west African countries, include Globacom, Dangote Group, Zenith Bank, United Bank for Africa (UBA), Diamond Bank, Cadbury Nigeria Plc, among others.