Abimbola Akosile
4 November 2008
Lagos — An extra band (5th) request made by Nigeria on the ECOWAS Common External Tariff (CET) has been adopted by the West African Ministers of Trade and Finance (Ministerial Monitoring Committee - MMC).
The fifth band, which is the highest tariff of 35 per cent, was adopted by the ministers at their just concluded meeting held in Banjul, The Gambia; where they described it (band) as a great vision for the countries in West Africa.
Speaking with the President, National Association of Nigerian Traders (NANTS), Mr. Ken Ukaoha, on the issue, THISDAY learnt that the 35 per cent tariff is a step farther from the UEMOA (Francophone Commission)'s four bands of 0 per cent, 5 per cent, 10 per cent, and 20 per cent.
According to him, the issue of the ECOWAS CET had for long remained controversial among the poorer countries of the region, with series of concerted debates on the viability or otherwise of a 5th band of 50 per cent.
Nigeria had recently announced a descent of her 5th band proposal from 50 per cent to 35 per cent to facilitate a speedy resolution of the ECOWAS CET quagmire and regional integration; based on the advice of her Technical Committee on Economic Partnership Agreement (EPA).
The Ministers had during the Nouakchott, Mauritania Ministerial meeting argued on the acceptability and viability of a 5th band as well as its implications on the economies of member states of the region.
In the end, they had decided that a study be conducted with Terms of Reference. ECOWAS and UEMOA Commissions conducted a study in collaboration with the United States Agency for International Development (USAID).
Similarly, the Federal Government, through the Technical Committee on EPA in collaboration with the UK Department for International Development (DfID) also conducted another study using the ECOWAS study, the ROPPA/Oxfam study and NANTS study as analytical references.
"Eventually, the result of both studies indicated that the existing tariff bands were not protective of the economy of West Africa. In addition, both studies also confirmed the possibility of re-negotiation of the extant bound tariffs at the World Trade Organisation (WTO)", Ukaoha disclosed.
Also, the importance of ensuring coherence between the CET, the Sensitive products selected by the region and the Rules of Origin for the EPA negotiations was also stressed as a pre-requisite for pro-development EPA outcome.
Some experts, he added, had noted contrarily that regional integration cannot be disconnected from CET policy; and asserted that most local traders still currently experience tariffs within ECOWAS borders and double taxation as goods move through the region.
The fifth band, the experts insisted should answer precise needs and target clearly identified economic policy goals, otherwise, it will tempt agricultural and industrial lobbies to obtain high tariffs for their products; even though they were not originally slated for any tariff above 20 per cent in the previous ECOWAS negotiations (with the exception of Nigeria).
"More so, the establishment of a fifth band should be driven by the desire to provide additional protection for economic activities and their operators on a regional basis, answering regional needs and regional development goals", he noted.
However, the Ministers had recalled that the issue was a subject of discussion and debate at the Nouakchott Ministerial, and had hindered and the trade and regional integration efforts of the West African states, apart from delaying the EPA negotiations.
Recalling that the Nouakchott Ministerial had concluded that the CET should be resolved at the next Ministerial (Banjul), the Ministers insisted on specific decision for their conclusion.
With the explanations given by the ECOWAS Trade Commissioner and the President, revealing that the study justified the need for the creation of a fifth band and that such band should be placed at 35 per cent, the Ministers adopted the new tariff band.
However, Ukaoha added that the classification of products under the various categories is to be worked out by the Joint Commission soon.
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