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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND INFORMATION
Economic Community of West Africa states (ECOWAS) was founded on 28th of May, 1975. It is a regional organization of fifteen countries which include; Benin, Burkina Faso, Cote d‟ivoire, Gambia. Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Cape Verde, Niger, Nigeria, Senegal, Sierra Leone and Togo. The ECOWAS treaty was signed on 28th of May, 1975, when the fifteen countries met in Lagos, Nigeria to sign the treaty. ECOWAS has governing bodies that has changed along the course of the community‟s existence and these bodies include; the Head of State and Government, the Council of Ministers, the Community Parliament, the Economic and Social Council, the Community of Social Justice, the Executive Secretariat, the Fund and Cooperation, Compensation, Development and Specialized Technical Commission. ECOWAS is considered one of the pillars of the African Economic Community; it was founded in order to achieve „collective self-sufficiency‟ for its member states by creating a single large trading bloc through an economic and trading union. (DR A.B Akinyemi et al (1984))
Its mission has been to foster promotion cooperation and economic integration in all fields of economic activity, particularly industry, transport, telecommunications, energy, agriculture, natural resources, commerce, monetary and financial matters, social and cultural issues among the member states.( ibid )
The Nigerian economy has had a truncated history. In the period 1960-1970, the Gross Domestic product recorded 3.1 per cent growth annually (A.H.EKPO and O.J.UMOH: Online Nigeria Community Portal of Nigeria). During the oil boom era, roughly 1970-1978, GDP grew positively by 6.2percent annually, in the period 1988-1997 which constitute the period of
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structural adjustment and economic liberalization, the GDP responded to economic adjustment policies and grew at a positive rate of 4.0 per cent (ibid). In years after independence, the period 1980-1988 where industry manufacturing grew negatively 3.2 per cent and 2.9 per cent respectively, Gross Domestic Investment as a percentage of GDP which was 16.3 per cent and 22.8 per cent in the periods 1965-1973 and 1973-1980 respectively, decreased to almost 14 per cent in 1980-1988 and increased to 18.2 per cent in 1991-1998 account balance before official transfers are negative for 1965-1975, 1980-1988 and 1991-1998(ibid). The economy never experienced double digit inflation during the 1960s. By 1976, the inflation rate stood at 23 per cent, it decreased to 11.8 per cent in 1979 and moved to 41 per cent and 72.8 per cent in 1989 and 1995 respectively, by 1998, the inflation rate had however reduced to 9.5 per cent from 29.0 per cent in 1996 (A.H.EKPO and O.J.UMOH: Online Nigeria Community Portal of Nigeria).
Today, as part of moving with the trend of globalization and trade liberalization in the global economic system, Nigeria is a member of signatory to the trade agreements such as IMF (International Monetary Fund), World Trade Organization, ECOWAS just to mention but a few. The policy response to economic partnership on trade has been to remove trade barriers, reduce tariffs and embark on outward oriented trade policies. Despite all her effort to meet up with the demands to these economic partnership in term of opening up her border, according to the 2007 assessment of trade policy review, Nigeria‟s trade freedom was rated 56 per cent making her the world 131st freest economy while in 2009, it was ranked 117th freest economy, the country‟s GDP was also ranked 161st in the world in February, 2009. In fact, it seems like as the country put greater effort to boost her economic growth by opening up to trade with the global economy the more she becomes worse off relating to her trading partners in term of country output growth(A.H.EKPO and O.J.UMOH: Online Nigeria Community Portal of Nigeria).
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However, in the 1980s the economy was in a recession. The on-going economic reform programme is an attempt to put the economy on a recovery path with minimal market. Based on some basic indicators, it appears that the economy performed well inflation. Unemployment rates averaged almost 5 per cent for the period 1976-1998. However, the statistics especially on unemployment must be interpreted with caution. Most job seekers do not use the labour exchanges, apart from the inherent distortions in the country‟s labour during the years immediately after independence and into the oil boom years (Dr. Mohamed (2007) www. Wilsoncenter.org/…/the-role-of-ecowas-in-achieving-the-economic-integration).
1.2 STATEMENT OF THE PROBLEM
From its very beginning, ECOWAS hasn‟t been effective. The organization did not have established foundations to deal with logistics, infrastructure, human resources, or strong economy that were needed to realistically promote a regional body. Nigeria is the linchpin of the Economic Community of West African States (ECOWAS). Over 50% of the ECOWAS population lives in Nigeria. Nigeria‟s GDP is larger than that of the combined GDP of all the other ECOWAS states put together. Nigeria accounts for the lion share of the annual ECOWAS budget (31%; relative to only 12.6% by the second highest contributor- coted‟ivoire), as well as of the ECOWAS Fund (32% relative to only 13% by coted‟iviore) (Aribisala (2000) www.nigeriadevelopmentandfinanceforum.org). The pre- eminence of the Nigerian economy vis-à-vis the other ECOWAS states, and its correspondingly large financial responsibilities (among others), inevitably raises the question of the value of ECOWAS for Nigeria. Many regional integration schemes have been established in Africa in the bid to attain a market number more than half the size of Nigeria. Moreover, Nigeria‟s domestic industrial production is still
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insufficient to accommodate the vast demand of its internal market, how much more to provide for significant exports to neighboring ECOWAS states. The effectiveness of this regional organization has not really been felt, Nigeria is still having economic problem. The research work looked at the factors that are preventing West African countries including Nigeria from achieving the ECOWAS objectives.
1.3 OBJECTIVES OF THE STUDY
The broad objective that is considered in this research work is to study the role of ECOWAS in the Economic Development of West Africa. These objectives are:
ü To examine the contributions of ECOWAS in the economic sector of the sub-region.
ü To examine the gap between the stated objectives of ECOWAS and the reality of their fulfillment in Nigeria.
ü To identify the challenges to the fulfillment of ECOWAS objectives in Nigeria.
ü To suggest and recommend the solutions to these challenges in the West Africa sub regions as whole in Nigeria in particular.
1.4 RESEARCH QUESTIONS
The research questions that are being considered in this research work include the following;
ü What in your opinion are the contributions of ECOWAS into the economic development of Nigeria?
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