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Nigeria seeks to enhance its N5tn trade surplus with EU – Osinbajo

By on November 7, 2015

The federal government on Thursday stated that it was seeking further diversification of the nation’s economy to enhance the existing N5 trillion trade surplus the country currently enjoys with the European Union (EU).

It was however noted that the major export responsible for the surplus was crude oil.

Osinbajo, who was represented by the acting Permanent Secretary, Federal Ministry of Industry, Trade and Investment, Mr. Ajiya Mamman, during the fourth EU-Nigeria Business Forum tagged: ‘Unlocking opportunities for diversification,’ said Nigeria’s annual export to the EU was about €30 billion in comparison with West Africa’s export which stands at around €38 billion.

“EU-West Africa trade has surged over the last decade. West Africa is the EU’s largest trading partner in sub-Saharan Africa and EU is West Africa’s biggest trade partner.

“West African export to the EU has increased by 280 per cent while EU export to West Africa has also increased by 125 per cent,” he said.
He added that the new administration realised that trade and investment relations between Nigeria and the EU was important, saying that it would provide the conducive environment for the growth and development of the private sector.

According to him, the Muhammadu Buhari-led administration has prioritised the export of non-oil products with value addition in order to create jobs for millions of the nation’s unemployed youth.

He stressed that in the last five years, the EU has provided a €19 million in the form of grants through the National Planning Commission (NPC) to improve the country’s competitiveness for the non-oil diversification of the economy, saying the grants are part of the Nigerian private sector competitiveness support programme.

“On the recent ban of some Nigerian commodities from the EU market till June 2016, our mission is to urgently address trade development related problems and lack of capacity to compete effectively at the global markets,” he said.

He stressed that the federal government was not insensitive to the challenges faced by Nigerian exporters resulting from this suspension, maintaining that the government had mandated relevant agencies in charge of quality control in  agricultural commodities for export to ensure strict compliance with international best practices when inspections are being carried out on commodities for export.

In his speech at the event, the chief host, Governor Akinwumi Ambode of Lagos State, said the theme of the EU annual event which focuses on ways of addressing the challenges affecting the agricultural value chain is not only relevant but apt considering the dwindling oil prices and its attendant impact on government’s revenue, stressing the need to look inwards to seek ways of growing the nation’s  economy and boosting the GDP.

He said the agricultural sector serves as an alternative means of earning foreign exchange for the economy, individuals and private organisations through the various agro-allied value chains.

“I want to commend EU trade delegation and the EU member states for this business forum. The EU relationship with Nigeria is significant not only because Europe remains the top destination for the nation’s non-oil export but also because the region accounts for about one-tenth of Nigeria’s total trade,” he said.

On her part, the European Commissioner for Trade, Cecilia Malmstrom, in her goodwill messages said deepened trade and investment ties with the EU are ways to help achieve economic diversification, adding that last year, EU-Nigeria trade in goods came to almost €40 billion, but stressed that closer and deeper engagement will help Nigeria  and the EU do more business, create more jobs and drive both economies forward.

She noted that access to imports was also vital for an economy in its quest to diversify, noting that developed economies are where they are today because they also opened up to imports.

“The reality is that today, it is almost impossible to make a product or deliver a service without some kind of international input. In Asia the model often involved importing high-tech components in order to assemble them into finished products before re-exporting,” she said.

In her words: “The Economic Partnership Agreement (EPA)  that we have negotiated between the countries of West Africa and the European Union is about bringing benefits to Nigeria. That is why my message today is that signing and implementing that agreement is a clear win for the companies, the workers, the consumers and the government of Nigeria.”

She said the EPA will provide duty-free and quota-free access to the EU market for Nigerian exports, not just to any market, stressing that the EU’s single market of 500 million people is the world’s largest.

She noted that the EPA will improve the economic integration of West Africa as a region, saying Nigeria is by far the biggest economy, but said trading with its neighbours was still vital for prosperity and growth.

“The EPA also includes a programme of development cooperation funding for West Africa worth €6.5 billion, and this funding will support infrastructure projects and capacity building in the private sector and civil society,” she added.

The Permanent Secretary, Ministry of Agriculture and Rural Development, Architect Sonny Echono, who also spoke at the event said his ministry  would create an enabling environment backed with adequate policies to drive local and FDIs to ensure quality business service delivery.

The Ambassador, Head of EU Delegation to Nigeria and ECOWAS, Michel Arrion said EU and Nigeria have developed robust economic relations with very large trade volumes at €40 billion in 2014, saying that Nigeria is also a key beneficiary of EU FDI with FDI stock growing from €25 billion in 2011 to €30 billion in 2013.

“It is with this in mind that the 2015 edition of the EU Nigeria Business Forum tagged “Unlocking opportunities for diversification” has been put together to explore the opportunities available for Nigeria to diversify exports, increase foreign exchange and attract more FDIs,” he said.

He added that the most comparative advantage Nigeria has is agriculture, but stressed that the sector must evolve from exports of primary products to value-addition.

He said this year’s forum is to deepen the understanding of the role that the EPA can play in supporting the diversification of Nigeria’s economy, strengthen EU-Nigeria business relations through identification of opportunities of partnerships and hopefully, address the bottlenecks related to the effective development of agribusiness in Nigeria.

 

[ThisDay]