• CBN, regional body to provide N457b for farmers
EXPERTS of the Economic Community of West African States (ECOWAS) and the Economic and Monetary Union of West Africa (UEMOA) have adopted a Common External Tariff (CET).
The CET is seen as a critical step on the path of establishing a free trade regime in the sub-region.
The adoption, according to the ECOWAS commission yesterday, was sealed after a joint meeting of the ECOWAS-UEMOA Committee for the Management of the CET in Lome, Togo. It also spells out a common “nomenclature” for West Africa, based on the 2007 version of the Harmonized System Nomenclature.
Also yesterday, the Central Bank of Nigeria (CBN) and the Alliance for a Green Revolution in Africa (AGRA) under a scheme called Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), signed an agreement to set up a special financing mechanism that would help farmers.
The nomenclature, it was explained on Monday, is “an orderly system of description and coding of goods” to be used in international trade by member states. Its coming on board takes into account certain agreed principles for the economic and industrial development of the region.
Over the years, the CET was eagerly awaited in the sub-region because it is to lay the foundation for a regional customs union, which implementation will accelerate economic and industrial growth in West Africa.
The commission further disclosed yesterday that being critical to the establishment of a free trade area in the region, the ECOWAS CET is based on UEMOA (the eight-member Francophone sub-regional organisation) as a four-band tariff of zero per cent, five per cent, 10 percent and 20 per cent before the addition of a fifth band of 35 per cent recently.
Under the CET, categorization of products is done as follows: Zero percent for essential social commodities, raw materials and capital goods; 10 percent (intermediate products), 20 percent (consumer goods) and 35 percent for specific goods for economic development in the fifth band.
The addition of a fifth tariff band to the structure of the CET in 2008 led to a review of the product re-categorization methodology to enable member states submit to the ECOWAS Commission, their lists of products deemed “specific goods for economic development”, classifiable under the fifth band.
Addressing participants at the close of the meeting, the ECOWAS Commission quoted its Commissioner for Trade, Customs, Industry and Mines, Free Movement of Persons and Tourism, Alhaji Mohammed Daramy as saying that the experts had elaborated on the criteria for the selection of products into the fifth tariff band.
He drew the Committee’s attention to West Africa’s trade interests, which he said are mainly focused on the promotion of exports and economic diversification as well as enhancement of domestic supply capacity.
Daramy further stressed the need for good trade governance, if trade must be integrated into the principles of sustainable development. In this regard, he identified certain principles necessary for good governance.
They include ensuring transparency through providing stakeholders with access to relevant and accurate information, ensuring accountability for decisions and actions which are based on comprehensive and reliable analysis; encouraging cooperation in order to build trust and shared goals and values as well as ensuring that decisions are made at the appropriate level.
The commissioner decried current national approaches to trade reforms, which he stated, were insufficient “when examined from the point of view of unhealthy competition between member states, maintenance of multiple regulatory and administrative bottlenecks”.
He warned: “I must reiterate that the economic and trade integration of West Africa cannot occur by chance and neither will beneficial and sustainable development of trade in West Africa be accomplished by chance.”
He assured participants that the ECOWAS and UEMOA Commissions were determined to forge partnership with member states and other stakeholders to initiate programmes for a sustained and integrated action in order to develop and regulate trade in West Africa.
“Our mission is to accelerate the integration of West Africa’s trade policies and regulations and to be able to attract the trade sector investment needed to create wealth for the citizens, while protecting and enhancing the social life and the environment of the local trading communities,” he added.
Meanwhile, at the signing of NIRSAL agreement with AGRA, CBN Governor, Sanusi Lamido Sanusi was optimistic that it would focus on the needs of farmers, especially small-holder farmers, agro-processors, agribusinesses and input suppliers in the agricultural value chain.
“The CBN has embarked on major reforms of the banking sector to bring it in line with our priorities for sustainable economic growth. Agriculture is one of the key sectors. Financing agriculture is central to Nigeria’s economic future.
“We know that farmers and agribusinesses need access to credit, coupled with proper financial literacy, market access, and insurance. They need the total package. We will design it rigorously and make it work to lift millions of Nigerians out of poverty,” he said.
When the scheme comes on full stream, it would deploy $500 million to access about $3 billion from banks in the country to jumpstart the agriculture industry.
AGRA was founded in 2006 through a partnership between The Rockefeller Foundation and the Bill Melinda Gates Foundation.
It is a dynamic, African-led partnership working across the African continent to help millions of small-scale farmers and their families lift themselves out of poverty and hunger.
Sanusi described the NIRSAL as the apex bank’s home-grown instrument for achieving the transformation of the sector, “because we believe that a productive an efficient agricultural sector is the foundation for the food and economic security of our nation.”
He added: “Unlocking access to bank financing for agriculture and developing risk-sharing approaches is critical for stimulating innovations in agricultural lending and increasing food production.”
In his presentation, the President of AGRA, Dr. Namanga Ngongi, stressed that AGRA’s integrated programmes in seeds, soils, market access, policy, partnerships and innovative finance work to trigger comprehensive changes across the agricultural system.
“Agriculture is a business not a way of life. The key to success is to provide farmers with access to improved farming technologies with financial resources and market linkages. They also need financial literacy to help them use financing better. Innovations are making a difference, and farmers are using credit to invest in their production. As a result, they are making more money; they are buying more and better seeds, fertilizers, cows and other inputs, ” Ngongi said.
On the partnership with CBN, he said: “The CBN is clearly showing that it can spur new opportunities in agriculture through leveraging financing for agricultural value chains from commercial banks. This is the kind of example that, if successful, can set the tone for the rest of Africa.
“Nigeria has the potential to be a major player in global food and agriculture markets, but you cannot eat potential. The key to turning this potential into wealth is putting policies in place that support smallholder farmers.”
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