EU budgets €‎6.5bn trade development grant for Nigeria

as trade volume between Nigeria, EU stood at €36.4bn in 2013

A budget of €6.5 billion for every four years till 2035 has been agreed upon by the European Union (EU) to provide financial trade related development assistance for Nigeria’s growth, says the EU.

Michel Arrion, the EU ambassador/head of EU delegation to Nigeria and ECOWAS, said Tuesday in Lagos, that the move was to demonstrate EU’s strong confidence in the Nigerian economy, disclosing that the volume of trade between Nigeria and EU stood at €36.4 billion in 2013, accounting for 29.6 percent of Nigeria’s total trade the same year.

‎“The EU will be making strong commitments in terms of financial development assistance,” Arrion said, saying that the EU and its member states had all agreed to provide a minimum of €6.5 billion of trade development assistance every five years till 2035.‎

“Every five years, we are committed to give grants, development assistance. In the last five years, it was €8.5 billion. We are very comfortable to provide this development assistance,” he said.

Arrion, at a media luncheon to announce its fourth EU-Nigeria business forum tagged “Unlocking opportunities for diversification,” however said that the EU had no offensive agenda for Nigeria and other countries in the region.

‎”Nigeria is maintaining import bans against ECOWAS. You can do this outside ECOWAS, but not within. You are part of the same community and bound by some rules relating to free movement of goods and people. We have no offensive agenda for Nigeria because we believe that Nigeria and ECOWAS are very interesting places where European or other non-European businesses could invest because there is enough room for investment,” he said.

‎According to him, the EU will not invade the West African market with products that could compete with domestic products of what Nigeria and other countries in the region would be producing, pointing out that the EU has removed all its export subsidies to the West African market.

On the Economic Partnership Agreement (EPA), the EPA establishes a partnership based on common objectives and asymmetrical obligations in West Africa’s favour, he said, saying that all West African exports are granted immediate duty-free access to the EU.

“In turn, West Africa will gradually reduce duties on 75 percent of EU imports over a long transition period of 20 years. There are many safeguards to support domestic production, infant industry and food security, and the EU will not use subsidies on agriculture exports to West Africa,” he said.

He noted that according to a World Bank study in 2014 showed an an overall positive effects on Nigerian consumers and producers, ‎with very limited fiscal losses, saying that the vast majority of manufacturing firms actually stand to gain from the agreement.

In his words, 95 per cent of Nigerian firms will benefit from lower input prices under the EPA. Helping Nigerian firms’ competitiveness will far offset any negative impacts of the EPA.”

He stated that the EPA will remove all EU tariffs on Nigerian exports, adding that Nigeria currently does not benefit from the agreement.

“Neighbouring countries like Ghana and the Ivory Coast are currently benefiting from the agreement. This will present opportunities for increasing exports from Nigeria to the EU and with a wider range of products granted duty free EU access, this should also encourage greater diversification of Nigerian exports,” he said.

Nigeria’s policy to ban importation of some specific items is simply economically unwise, he noted, pointing out the issue with Nigeria, as a nation, is that it does not export enough.

“You need to import to produce a lot to export. The more you are developing, the more you are importing. 80 percent of cars in Europe are imported from 40 countries. There is no ban and there is also almost zero import duty,” he said.

The forum scheduled to hold from November 5 – 7, in Lagos 2015, would bring about business leaders and policy makers from the EU and Nigeria to discuss business opportunities and impediments to investments, he said.

To him, Nigeria must be the driving force of an economic and political integration in the region, as this is the only way the EU and other foreign market can be attracted.

The factors that drive investments include, an enabling environment, peace, stability, governance and institutionalised frameworks, he noted, maintaining that a skilled workforce is critical for the emerging opportunities in Africa.

“The forum will aim to increase domestic and foreign investments, particularly in agribusiness, in line with Nigeria government’s diversification efforts,” he said.

According to him, since 2012, the EU-Nigeria business forum, a collaborative effort of the EU and its member states in Nigeria, has served as a platform for private sector participants to gather essential market information, identify business opportunities and connect with key players.

He pointed out that the forum would deepen understanding of the role that the EPA could play in supporting the diversification of Nigeria’s economy, strengthen EU-Nigeria business relations through identification of opportunities in agribusiness and forging partnerships.