OBG talks to Olusegun Aganga, Minister of Trade and Investment

 Olusegun Aganga, Minister of Trade and Investment

Interview: Olusegun Aganga

What are some of the effects you anticipate an environmental protection act (EPA) would have on the country’s production capacity?

OLUSEGUN AGANGA: Inadequate safeguards in the EPA would lead to increased imports of manufactured and agricultural products from the EU, which would result in de-industrialisation as well as jeopardise rural employment and livelihoods. There have already been disagreements over the scope of the opening of West African markets to products from the EU, which is insisting on an 80% market access over 12-15 years. This is contrary to West Africa’s offer of 70% to be liberalised over 25 years. The Economic Community of West African States (ECOWAS) is worried that opening its market so widely over a short period will result in the swamping of the region with subsidised products from the EU, a situation that could virtually destroy burgeoning industries in West Africa. Furthermore, clauses in the EPA disallowing export taxation and restrictions will limit the ability of West African countries to diversify their economies and integrate regionally.

How can Nigeria reduce its non-oil trade deficit with its biggest trade partners?

AGANGA: Nigeria remains Africa’s third-largest economy after South Africa and Egypt. Although GDP growth has been significant and steady over the past few years, the most salient feature of the economy is the predominance of crude oil production and exports. Improving Nigeria’s participation and performance in international trade is central to reducing the non-oil trade deficit with its biggest trading partners, particularly China, the EU and the US. The focus of the ongoing policy initiatives is to build and sustain the current above-average growth rates in the production and export of many non-oil products and tap into new sectors with potential for economic growth, including agriculture, petrochemicals, solid minerals and tourism.

We also aim to further integrate the informal sector – which has been estimated to be as high as 75% of the total national economy – into the mainstream economy. We believe that this will improve both the business and the investment environments by addressing the country’s existing challenges.

What are the challenges to greater regional trade and economic integration within ECOWAS?

AGANGA: Significant efforts have been made by ECOWAS towards achieving its stated objectives and fostering greater regional trade and economic integration.

Still, obstacles remain, such as the poor regional infrastructure, particularly the regional transport networks, and multiplicity caused by competing regional trading arrangements. These arrangements often have conflicting preferential trade regimes and cause some member states to fear of the loss of tariff revenue.

We are working assiduously with the Nigerian Export-Import Bank on the proposed sea-link coastal ferry services, which aim at transporting goods along the ECOWAS sub-region coast and reducing the number of days required to transport good from 35 to five. We are also establishing trans-national border markets in identified locations in the six geopolitical zones to increase the volume of trade between Nigeria and ECOWAS member countries and, ultimately, facilitate the movement of goods and people. The pilot scheme is Okerete in the south-western state of Oyo.

 What can be done to increase the competitiveness of Nigeria’s manufacturing sector?

AGANGA: The manufacturing sector in Nigeria has been growing at an average rate of approximately 7% since 2005. The government is currently taking measures intended to increase the competitiveness of the manufacturing sector by reducing the cost of doing business. Among these measures are port reforms and the provision of affordable credit through the Bank of Industry. Our port reforms have included reducing the time for clearance of goods and level of sub-standard goods, and instituting 24-hour operations at the ports.

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The Report: Nigeria 2012

Industry & Retail chapter from The Report: Nigeria 2012

Cover of The Report: Nigeria 2012

The Report

This article is from the Industry & Retail chapter of The Report: Nigeria 2012. Explore other chapters from this report.

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