Mr. Ken Ukaoha, President of Federation of West African Traders Association (FEWATA) for many years, says Nigeria has failed to reap major benefits from the several bilateral and multilateral trade agreements it has signed with other nations. He says however, that the creation of the Ministry of Trade and Investment could hopefully become the launch pad for making Nigeria a significant player in the global market. In this interview with Florence UDoH, he speaks on how to translate the country’s huge trade and investment potentials into national economic advantage.
Reflecting on Nigeria’s trade over the years, how would you describe the pre-WTO Agreement years compared to the post-agreement era, in terms of impact on the domestic economy?
I want to say that there was need for the World Trade Organisation (WTO) especially after the Second World war in order to allow countries come together, remove all blockades because at that time, many countries were polarised and suffering from the devastating impact of the war.
And the world needed an international body such as the WTO that would come and give some kind of direction into trade so that exchanges would flow across the countries. Before the formation of WTO, trade was going on but the agenda of liberalisation was not known.
It was after WTO that liberalisation of the economies came so that some kind of free entry and free exit of trade which, however, could also have some negative effects on domestic economies in terms of enhancing industrial capacities or protection of local industries, was embraced.
Looking at it from the perspective of Nigeria, one will say yes, WTO is something that has opened Nigeria to the other world.
But, another point will lead you back to the question of how far Nigeria has fared in this particular community called WTO. My answer to that is that first, Nigeria went into WTO without preparation.
We didn’t look at the books; we didn’t look at the contents of agreement; and essentially, that was a period in the history of this country when Nigeria was regarded as a pariah state under the Abacha administration. Pariah in the sense that the Ken Saro Wiwas of this world were killed and the whole world was saying look Nigeria, we cannot do anything with you any longer.
So, in trying to belong, the issue of WTO came up and it was grabbed immediately without looking twice. Nobody was given opportunity to look at the contents of the WTO agreement, in terms of write ups, in terms of anything.
If you take a look at what we have gone through and what we have to sell at the international market, the agreement has not been beneficial to the economy.
Another issue that has been agitating the minds of stakeholders is that Nigeria entered into some bilateral and multi-lateral trade pacts without considering their implications for sustainable growth of the economy. What is your comment on this?
If I were to have a say in the policy outlines of Nigeria, I will tell Mr. President that look, I think we have put our fingers into many agreements and we are not sure of what is getting to us as returns from such initiatives.
Many agreements are yielding nothing. Some of the trade or economic agreements were even putting us into what I can call un-equal partnership as they are not yielding any dividends.
We should take a census of all the agreements Nigeria has signed, which is more than 127 bilateral agreements and majority of them are trade agreements, with a view to determining their relevance to our trade and economic policy objectives.
There is no country that can do such things and remain in the forefront of the global economic system. As an import-dependent economy, Nigeria’s trade and industrial frameworks have been lacking in rich implementable contents required to address the lopsided structures of her export-import trade.
As a leading advocate of mutually beneficial trade relations, what do you think could be done to ensure that the magnitude of her trade imbalance with most of the trading partners, especially the Asian countries, is reduced in the interest of the domestic economy?
This is where I have a radical opinion, China got to where they are today because they had an inward-looking concept about international treaties. I know the gospel of liberalisation that was preached by WTO was embraced by many countries without taking due study of its implications for their domestic economies.
And those who were also behind the gospel were mainly the developed countries. However, the structures and institutions that Nigeria requires to leapfrog her into the main stage of global trade were not in place at the time we endorsed the WTO agreement. This is in spite the fact that we have a lot of resources.
What we needed then was, like China, to lock ourselves in and develop these resources here and there before coming out. China just accepted the WTO after developing their own manufacturing and other export-oriented sectors of their economy.
So, if we had locked-up the economy our economic story would have been different today. But I am not sure it is too late, because we are talking about vision 20:20-20, there is no way we can get to that level without locking up, develop the resources, be it solid minerals, human, natural resources that God has endowed us with and convert them to finished goods.
Recently, the Minister of Commerce and Industry reiterated government’s determination to have a trade and industrial policy for the country. Is there any level of collaboration with your group in respect of the proposed policy?
I will not say no. But in the first place, we have been the one that has been advocating the need for Nigeria’s trade and industrial policy because we have looked at ourselves and asked: How can as we a country, be running without a definite trade policy direction? The one we have in place since 2001 is obsolete and lacking contextual relevance to emerging issues on trade.
According to WTO, a trade policy has to be reviewed every five years. In 2005 and 2006, it has expired and we have been beating here and beating there, and we are almost like doing business in the dark.
That is the reason in our nation today, people have been made trade policy billionaires overnight because there is no concrete, coherent trade policy that tells you that this particular time from this year to this year, this is the kind of policy that we are operating.
Today, it is destination inspection and tomorrow, it is pre-shipment and the day after, it is a combination of both. Yet, we have a development strategy where real sectors should be able to give life to that development strategy to where we are heading to. The new Ministry of Trade and Investment should give us a policy that is conducive to Nigeria.
At this point, we also need to go a bit further by looking at what Nigerian trade policy should be. There should be a correlation and linkage between trade, manufacturing and agriculture. Agriculture will provide the raw materials, manufacturing sector will process it and the commerce sector will market it.
Therefore we will look at the people, the manpower in these sectors. For instance, in commerce and agricultural sectors, majority of people who are involved, there today, whether we like it or not, are women.
If you are going to design a win-win policy in these two sectors since about 70 per cent of those engaging in these sectors are women, then the women must be the focal point of the policy in these sectors. Now, if we are going to get a quality policy that will add value to the development focus, we must ensure that the policy is gender sensitive.
That is what we did. We now did a gender audit of the agricultural policy and trade policy in Nigeria because trade policy encompasses that of trade and industry.
That is what we did in these two sectors, and what we came up with has just been printed and we are going to present it to the public in the nearest future. Beyond that also, I will inform you that we have tried to also ensure that Nigeria’s trade policy should build into a regional trade policy such as we have an ECOWAS Trade Policy.
Unfortunately, the ECOWAS Commission has been negotiating trade on behalf of the region and for Nigeria to benefit from regional trade; we should have a regional trade policy that links Nigeria’s Trade Policy because 60 per cent of industries in the West African sub-region is located in Nigeria.
Based on what you have just said, in respect of the ECOWAS Trade Liberalisation Scheme, what is your assessment of the implementation of the scheme so far?
Nigeria is not at the receiving end but she can do better to turn the table. I gave an illustration that if you take a statistics of the industries that we have in the whole of West-Africa, you will see that more than 60 per cent of manufacturing industries are in Nigeria. That means that most of the industries of West-Africa are in Nigeria.
Therefore, we have opportunity to export to other countries and they will depend on us like we are dependent on China. By so doing, we will be raking funds to the country.
I think this is one area that Mallam Sanusi, the CBN governor, should be given some kudos because he has been looking into the future where Nigeria can really get some competitive edge by building domestic industrial capacity. He has also tried to stabilise the financial sector with some regulatory operational guidelines and all that.