W'Africa: The deformed child now wants to 'walk'
West African countries, used to donor-driven economies, now want to industrialize. But on what terms, at what pains? BY OGHOGHO OBAYUWANA
THE assertion that the prevailing systematic confinement of the West African sub-region to a primary commodities production zone for the developed economies of the world must be reversed in good time, is gaining ascendancy by the day.
Also gaining much influence is the doggedness in the new time, by the Economic Community of West African States (ECOWAS) negotiators of the Economic Partnership Agreement (EPA) with the European Union (EU) to stay resolute on the issue of protecting the West African market from dumping.
Thus currently, there exists crossroads as to how the west coast of Africa populated by some 275.7 million citizens living in 15 countries can get industrialized. It is in the recognition that rapid economic transformation will continue to elude societies, which do not industrialize. The whole talk of free trade, borderless region, tax harmonization, job creation and achievement of the desired Gross Domestic Product (GDP) fades into insignificance without being backed up by a viable industrial base, which was the vision of ECOWAS forefathers.
For decades, people who live in West Africa have looked up to West African Common Industrial Policy (WACIP) to promote among others, the growth of the regional economy by promoting industrial sector contribution through coherent and harmonized common policy. Now integration experts are calling on the various governments in the sub-region to fashion out a common industrial policy which implementation strategy will include but not be limited to increase in manufacturing activities in the area.
Latest research findings and United Nations (UN) indicators have shown that despite dominating the economic activity in the region, there is very little happening in terms of agro-processing in the West African sub-region.
According to the ECOWAS Statistical Bulletin 2008, of the 15 member states in ECOWAS, only Cape Verde had up to 25 per cent of its working population employed in the industrial sector. But its share of the labour force only increased marginally from nine per cent in 1999 to 9.5 per cent in 2005, then plagued by fluctuations, it declined to 8.6 per cent in 2006 only to rise slightly again to 9.3 per cent in 2007.
Still, agricultural production remains the dominant economic activity in the region with very little emphasis on agro-processing. Eight member states had more than 58 per cent of their working population engaged in agriculture in 2007 (Guinea Bissau, 77.4 per cent, Niger (78.5), Mali (68.9), Guinea (70), Togo (69.2), Sierra Leone (63.8), Burkina Faso (62.1) and Liberia (62.7). The percentage labour force had also declined from 61 per cent in 1999 to 59.1 per cent in 2006 and further down to 58.3 per cent in 2007.
And while the service sector increased its share of the labour force from about 29.6 per cent to 32.4 per cent between 1999 and 2007, the other sectors declined even as the increase in the service sector was attributed to emerging developments in the telecommunications industry.
But the ECOWAS experts attempted providing a leeway to the worrisome scenario recently at their meeting in Abidjan under the aegis of WACIP. These regional experts were drawn from mostly the real sector including representatives of manufacturers associations of the 15 member states of ECOWAS.
All eyes were on their work because their deliberations on the revalidation of the draft WACIP is expected to be adopted by the heads of state and government at their next summit, being the conclusion of their mid-summit for the year 2009.
ECOWAS Commissioner for Trade, Custom, Industry, Mines and Free Movement, Mohammed Darami stressed at a meeting of WACIP that, "confining West African countries to the production of primary commodities amounts to condemning them to remain locked in the commodity trap". This may eventually force the sub-regional group to look the way of India, China and Brazil in the quest for an industrialization inducing special trade partnership.
Darami who came in after an EPA meeting with the EU negotiating team in Brussels declared that ECOWAS is currently weighing other options should the EU refuse to accede to the demand embodying the protection of the West African markets in the aftermath of signing the EPA.
He said: "We are looking at South-South trade with India, Brazil and China...From our own standpoint, having reviewed all the facts on the ground, once these conditions are not met, I don't see us signing any EPA agreement. We have asked EU to make a commitment to support us to industrialize, add some value to our products...We want them to support the EPA development programme. I cannot foresee us signing any EPA except those conditions are met. West Africa is not negotiating for time. We are insisting on making sure that all the demands that will make our region industrialize are meant. We cannot remain eternal primary producers".
The conditions put forward by ECOWAS negotiators have to do with a 3.1 per cent market opening. ECOWAS is insisting that it cannot go above 70 per cent in the liberalization scheme. That it will protect 30 per cent of its market. But this has not gone down well with the EU partners who want more. The EPA development programme has a provision for _9 billion.
But it is the WACIP programme that provides an overview of the regional economy and the policy thrust while highlighting its vision, objectives, strategies, and guiding principles for an industrialized West Africa. It was developed as part of the overall strategy of the ECOWAS Commission to realize the industrial components for the setting up of an economic community of West Africa.
As West Africans prepare for the next heads of state mid-year summit, what is currently being looked at, as an offshoot of the Abidjan convergence include the economic, security interplay in the integration process, the structure of the secondary sector, the situational analyses of agro-processing in West Africa, the main limitations to industrial development in West Africa, the international context of regional industrialisation, globalization, the World Trade Organisation as well as EPA agreements.
Before now, interest had also been quietly building up on development initiatives that have to do with the outside world and particularly the development partners. These included the African Productive Capacity Initiative (APCI), New Partnership for African Development (NEPAD), African Growth and Opportunity Act (AGOA), Every But Arms (EBA), Millennium Development Goals (MDGs) and the One Village, One Project (OVOP).
On AGOA, the submission was that West Africa has not reaped the full benefits of that trade window, while only Ghana appears to have taken some advantage. In comparison with eastern and southern Africa (Botswana) including the northern region (Morocco and Tunisia), there has been no success story to tell in West Africa.
A research fellow and consultant on development who was drafted in from the International Consultancy Bureau for the job at hand, Dr. Nmase Kpadoo said that much as the leaders of the countries in West Africa are failing the citizens, the conspiracy of the western European trade and economic organisations through a reparative trade engagement policy with West Africa has not helped matters.
He raised some critical questions: "How can the region make progress when all our activities are controlled by foreigners and international partners? The issue today is not much about re-inventing the wheel but using whatever development models exists to carry on a people related and people affected industrialization. Now, where does West Africa stand in this? The OVOP is a success story, success story as we have seen in Japan. How can we make it work here? Yet, it has been widely acclaimed as another strategy of creating employment".
Continuing, he said: "UNIDO has been carrying out studies on this. It is a donor-funded project and this may have affected how it is faring because the initiative was not indigenous. We are not driving it. Once there is little fund drying up, it is abandoned. Why can't we develop our ideas? We have to believe in ourselves instead of continuously insisting that others are trying to impose something on us...So, a project is available, funds were available but nothing was done. We have our blame on this issue".
It has been said that the place of industrial policy for West African economic advancement will remain paramount in the years ahead and the idea is that a real integration for the region would start when there is a real integrated industrial layout for the area. Now a draft industrial protocol is still expected to be evolved and should come on stream by June 2010. Besides, no one really knows how many projects have been funded by the Integration Bank for Industrial Development (IBID) or West African Monetary Union (UEMOA) banks that are charged with West African industrial financing and growth.
On a country-by-country analysis, the ECOWAS Commission Bulletin disclosed lately that Nigeria is considered the most industrialized nation in the sub-region. But statistics show that while the country value added $37.2 million to the regional GDP in 2007, industry had only $20.2 million. The value added structure by the kinds of economic activities for most of the other member states in terms of ratio for industry were pretty much the same, while the industrial sector continues to employ less and less of the population.
Free trade and the need for agro-processing are central to the industrial development of West Africa. This is the reason why Darami's threat that ECOWAS might have to look beyond Europe for a sustainable trade partnership should be taken seriously. He believes "market opening is the difficulty that we have with EU. The crucial issue has to do with the 31 per cent on market opening that we have already reached. We cannot go above 70 per cent. In the EPA development programme, there is a _9 billion provision. We have other options and these are being weighed...Now, I don't care whether we negotiate for the next 20 years, once these conditions are not met, I don't see us signing any EPA agreement".
Conclusions have since been reached on the need for a rapid promotion of private investment in West Africa. That the frequent grievances of the business community arising from the high cost of doing business and undue delays in the region have now necessitated a private sector promotional strategy to remove such hindrances.
It has also been said often that investment codes are not a panacea for industrial development. The same goes for industrial governance unless there is an implementation plan. But West African states do not adopt measures that are favourable to industrialisation, by re-focusing its strategies, looking at a workable time frame for its industrial policy, and using an appropriate legal framework.
Yet, for all these to come to fruition, an already existing action plan that prescribes among others the strengthening of intra-community trade, promotion of quality and standards of goods, development of micro-enterprises, valorization of endogenous patents and research and development must be implemented in the region.
