A member of the Economic Community of West African States (ECOWAS) Commission, Mr. Felix Kwakye has said that the import Adjustment Tax (IAT) currently provided for in the ECOWAS Common External Tariff (CET) was not an opportunity for member countries to do whatever they like.
Kwakye who was fielding questions from the participants at a forum in Lagos however stated that the IAT was fashioned to help most of the countries that would have to make economic adjustments over a 5 year period so that by 2020, as agreed by ECOWAS member countries, all of them would have to embrace the necessary adjustments that were required to commence a common tariff regime.
He said, “And let me state here that the Import Adjustment Tax does not cover the totality of the tariff lines. Don’t forget that the CET is made up of 5, 899 tariff lines but the Supplementary Protection Measures which includes the Import Adjustment Tax covers about 3 percent of the total tariff lines which will amount to 177 tariff lines and this is a window of flexibility which has been given to member states”.
While alluding to the fact that the West African sub-region was a very diverse region, he however pointed out that harmonization of tariff for those 15 member countries was a herculean task adding that it was going to have some strong economic effect on some countries thus the need for the leaders to agree on a transition period.
“You will agree with me that West Africa is a very highly diverse region. At the beginning of my presentation, I alluded to the diversity of West Africa. Nigeria is the strongest country economically you have. In West Africa, a country like Cape Verde which has about 7.5 million inhabitants spread over ten islands and then, you have a country such as the Gambia with a population of 1.5 million virtually encapsulated in another country called Senegal. Now, this diversity reflected in the industrial base of all these countries. If we take into account a number of industrial concerns in Nigeria, in fact, it will be half of what is in the whole region of the CET.
“Therefore, harmonized tariff for these 15 member countries is no easy task. Certainly, it is going to have strong economic effect on some countries. In all, our leaders in their own wisdom felt that we need to have a transition period where we have a certain level of flexibility for the member states to gradually adjust to the CET to liquidate whatever implication that will come with the CET”, he explained.
