EAGLE IN FLIGHT

Nigeria 2018 | DIPLOMACY | REVIEW

Regional integration has long been a cornerstone of Nigeria's foreign policy, and plans to build a West African currency union represent the next step in this regard.

Nigeria's foreign policy has traditionally adhered to Africa-first principles. Since independence, the country has played a major role in continental affairs, first through the Organization of African Unity (OAU) and then through its successor, the African Union. Nigeria's status as the most populous country in Africa has given it a growing voice in managing affairs and allowed it to play a key role in coordinating economic and social policies to improve standards of living and prevent social unrest. As its role has grown, it has also begun to play a larger part in international affairs. A member of several major international organizations, it has worked on forming new ties with European and Asian economies eager to invest in Africa while still protecting its growing industries and laying the groundwork for economic diversification.

REGIONAL

Nigeria attainedindependence from Britain in 1960, but as with many other African countries the process of establishing a stable federal government took some time. Throughout its history as an independent state, however, Nigeria's foreign policy has been characterized by the principles of non-alignment and African unity. Nigeria was a founding member of the OAU in 1963, which aimed to better standards of living affirm African sovereignty through regional coordination. The OAU was disbanded in 2002 and replaced by the African Union (AU), a similar organization headquartered in Ethiopia. Nigeria has played a major role in the AU, chairing the organization in 2005 and taking a leading role in the efforts to form a single continental economic community.

Most recently, Nigeria has been leading the push for the creation of the African continental free trade area (CFTA), a proposed single-market trade regime that would allow for the free movement of goods and services. Such integration has long been a goal of Nigerian politicians eager for greater regional unity. The proposed CFTA would cover a market of over a billion people with more than the USD3 trillion in GDP, making it one of the world's most formidable trade organizations. The sheer size of the project, however, has also been its greatest obstacle to development. Negotiations between the AU's 55 member states have been long and difficult due to the dramatically different economic situations across the continent. Talks have been underway for more than two years, with Nigeria a leading voice; the union originally set a deadline of December 2017 to reach an agreement but it has since been pushed back. Still, the potential benefits for the continent and Nigeria's primary role in the organization mean that the issue is not going anywhere. Continued discussion of tariff reduction and boosting intracontinental trade will be a key issue moving forward.

Nigeria is also a founding member of the Economic Community of West African States (ECOWAS), which is made up of 15 countries and focuses on economic integration and ensuring stability in the region. As the largest member of the bloc, it is home to the ECOWAS headquarters and holds 35 of the ECOWAS parliament's 115 seats. ECOWAS' priority in recent years has been strengthening the West African trading bloc and laying the groundwork for a monetary union. Eight members of Francophone West Africa have formed the West African Economic and Monetary Union (UEMOA) and share the CFA franc. An alternate group of the English-speaking members of ECOWAS have formed the West African Monetary Zone (WAMZ) and plan to introduce their own common currency. As a member of WAMZ, Nigeria has led discussions on developing the Eco currency, with the long-term goal of merging it with UEMOA and uniting West Africa under a single free trade customs and currency regime. ECOWAS has also traditionally played a significant role in maintaining regional stability when it has been threatened by violence. The union has a peacekeeping force that has been deployed to maintain order and ensure peaceful transitions of power. Nigeria has contributed peacekeeping forces to Liberia, Mali, and Gambia, among other locations, and currently has more than 2,000 forces deployed in ECOWAS and UN operations across Africa.

GLOBAL

Nigeria's relationship with the West and its former colonial overlords has been strained at times, with successive governments moving closer or further away as the years have passed. Today, however, it has achieved a more stable partnership with major European powers and continues to work to form bilateral trade agreements that benefit both sides. Trade between the UK and Nigeria accounted for more than USD3.7 billion in 2017, and British officials only expect that to continue to grow in the near future. Current forecasts project trade between the two countries to increase to USD9 billion per year by 2030. Officials from both countries have been busy trying to navigate the changes caused by the UK's decision to exit the EU, which will necessitate the renegotiation of bilateral trade agreements. The two nations, linked by more than a century of shared history, both stand to gain via continued trade thanks to Nigeria's rapidly growing demand for British goods. Nigerian leaders have stated that their priorities are ensuring that Nigerian products have full and fair access to the British market, noting that some of its exports have faced difficulties meeting European regulations.

Increasing exports to the wider EU has been one of Nigeria's priorities in recent years. Trade volumes between the EU and Nigeria accounted for EUR39.6 billion in 2014; oil accounted for most of Nigeria's exports though it also sent cocoa, leather, and rubber in large quantities. In return, the EU has been a major source of investment as Nigeria seeks to industrialize, with FDI totaling more than EUR30 billion in 2014. Recent relations between the two have focused on further developing the trade relationship with an Economic Partnership Agreement (EPA), which would allow for quota-free exports and establish clear regulatory guidelines for commerce between the two sides. Over the past year, all ECOWAS countries save Nigeria and the Gambia have signed an EU-West Africa EPA, but Nigeria's concerns over what it perceives as the unequal nature of the proposed EPA has led to strained negotiations. Nigerian officials have seen the EPA as a threat to the nation's burgeoning industrial sector, and have projected that the country could lose more than NGN1.3 trillion over the next five years in lost import duties if the EPA is signed.