The Manufacturers Association of Nigeria (MAN Tuesday warned the Federal Government not to follow the road map leading to the signing of the Economic Partnership Agreement (EPA) between the European Union (EU) and the Economic Community of West African States (ECOWAS).
MAN also recommended that the entire negotiation process be subjected to a complete review.
Making their position known to the European Union delegation led by the EU Ambassador, David Mcrae, at a seminar on the EPA, President of MAN, Kola Jamodu, stated that their position was reached based on the observations on the potential threats of EPA to Nigeria and ECOWAS.
According to Jamodu, "In order to positively impact on the Nigerian economy, the EPA should be repositioned to facilitate the resolution of supply-side constraints facing the competitive production of goods and services. The capacities of domestic manufacturing and processing sectors should be strengthened to avoid regression and to give a fillip to the competitiveness of the productive sector."
He noted that the net effect of EPA will deepen de-industrialisation process in Nigeria and ECOWAS because unbridled imports will lead to a shut down of the few surviving industries, with consequent catastrophic implications for labour shaving and entrenched poverty.
He said that unemployment will increase as firms lay off staff/shut-down operation due to poor sales and lack of competitiveness of local products. Nigerian manufacturers cannot compete with imported products because of obvious infrastructure deficiency and other unfriendly operating environment.
He explained that if ECOWAS and other regional groups in Africa are made to liberalise their economies at a faster pace and not in line with their own poverty and development plans, the outcome would further constrain regional cooperation and throw away all benefits associated with regional integration.
"In particular, the industrial sector is conservative and insignificant by global standards. In its Industrial Development Report for 2002 - 2003, UNIDO reported that the contribution of the manufacturing sector to ECOWAS GDP averages less than 10 per cent and that its share of global value added was estimated at about 0.1 per cent. More than half of the manufacturing companies in ECOWAS operate below 50 per cent of their installed capacities."
The manufacturers therefore further recommended that Government should take urgent steps to improve the business environment, especially on factors that impact on market infrastructure, transportation and communication transaction costs, supply capacity and productivity; energy and market entry conditions.
They also called for a sector-based analysis to be carried out to evaluate the specific impact on each sector in order to determine the right liberalisation schedules that would not affect Nigeria 's development objectives.
MAN argued that given the low level of industrial development and the weak manufacturing base in the region, unrestricted access of imports from EU will certainly slow the pace of industrial development and therefore socio-economic development in Nigeria and ECOWAS.
"With its more advanced industries and technology, more competitive European Union imports will surely displace local production in Nigeria and ECOWAS thereby leading to plant closures and worsening of the employment situation and resultant deepened poverty.
"In fact, no ECOWAS country has a strong industrial sector at present that can withstand the tornado of global competition including challenges of EPA promoted by EU," Jamodu said.