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:
To examine the contributions of ECOWAS in the economic sector of the sub-region.
To examine the gap between the stated objectives of ECOWAS and the reality of their
fulfillment in Nigeria.
To identify the challenges to the fulfillment of ECOWAS objectives in Nigeria.
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;
What in your opinion are the contributions of ECOWAS into the economic
development of Nigeria?
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To what extent has ECOWAS been able to fulfill its missions in the West Africa sub
region and especially in Nigeria?
What are the challenges to the realization of ECOWAS objectives in Africa?
How do you think ECOWAS objectives can be realized?
1.5 SIGNIFICANCE OF THE STUDY.
In this research work, the role of international trade in the development of economy of
any country cannot be over emphasized, especially with the current trend of globalization in
Nigeria. Nigeria being part of the global village is not left out of the development world. This
research work will be carried out to study the role of ECOWAS in the Economic Development of
Nigeria. The findings of this research will transcend beyond mere academic brainstorming, but
will be of immense benefit to Federal Agencies, policy makers; intellectual researchers that
occasionally prescribe and suggest policy options to the government on economic issues. This
research work will also serve as a guide and provide insight for further research on this topic and
related field. It will educate the public on various government policies related to economic
issues.
1.6 SCOPE OF THE STUDY
This research work looks at Nigeria within the framework of ECOWAS in the last twenty
five years.
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1.7 LIMITATION OF THE STUDY
This research work will be limited to access to original source and documentation in
Nigeria due to the past wars. Furthermore, financial resources are limited, and there was tie
limitation. In the use of written materials, contemporary textbooks, the use of Journals and paper
presented at various seminars/workshop are being considered; the use of primary method of that
collection such as questionnaire was also put in place. Also some of these materials would be
explored from the internet.
1.8 ORGANISATION OF THE STUDY
This research work is divided into five chapters. Chapter one is the introduction which
contains: Background of the study, Statement of the problem, Objectives of the study, research
questions, significance of the study, scope of the study, limitation to the study, organization of
the study and the definition of major terms. While chapter two is the Literature review and the
theoretical framework. Chapter three reviews research methodology which includes research
design, research population, sample and sampling techniques, research instrument, the validity
and the reliability of instrument, data collection techniques, and data analysis techniques.
Chapter four spelt out the data presentation and data analysis. Chapter five is the conclusion and
recommendations.
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1.9 DEFINITION OF TERMS
ECOWAS: According to Wright (1998:31-33), ECOWAS seems to be an instrument to
enforce the dominance of Nigeria in the region, Nigeria is neither able to assume the
centric position inside a successful ECOWAS nor able to enforce its dominance
effectively.
Masson and Pattillo (2001:31), ECOWAS is supposed to be an economic community. It
has its own bureaucracy in pursuit of developing the community into a full-fledged
integrated region.
Base on this study, ECOWAS is a regional organization that brings all West African
counties together to promote their economy.
ECONOMIC INTEGRATION: according to John (2012) he gave an in-depth
information on economic integration stressing that, economic integration is about
member States adopting and implementing measures that would make doing business
within the grouping cheaper by removing all constraints to intra-regional trade and
investment and adopting measures which are conducive to trade and investment.
However, Onah and Ifedayo are customs union, common market, economy union and
total integration is referred to as regional economic integration. They also stressed that
the objective or purpose of economy integration in developed economy is different from
those of the developing economy. Whereas in the former, it serves to maintain and
enhance an already existing sustained growth through trade expansion and increased
competition, in the latter, it is seen primarily as a means of contributing to economic
development.
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Base on this study, economic integration is a national and regional development strategy.
G.D.P: According to investor word, G.D.P is an acronym for Gross Domestic Product. It
is define as an aggregate measure of production equal to the sum of the gross values
added of all resident institution units engaged in production plus any taxes, and minus
any subsidies, on products not included in the value of their outputs.
Base on this study, G.D.P is the measurement of a country‟s total output.
G.D.I: According to the investor word, G.D.I is an acronym for Gross Domestic
Investment. It is the addition of capital sock in a country that does not include deductions
for depreciations of capital that may have been produced previously.
Base on this study, G.D.I is the total number of investment spending by business and
firms located in the country.
I.M.F: It is an acronym for International Monetary Funds, it is an international
organization that was initiated in 1994 at the Bretton Woods Conference and formally
created in 1945 by 29 member countries, their goal was to assist in the reconstruction of
the of the world‟s international payment system post World War ii.
Base on this study, I.M.F is an organization set up to be of financial assistance to countries
especially the developing countries.
INFLATION: According to the business dictionary, inflation is a sustained increase in
the general price level of goods and services in an economy over a period of time. When
the general price level rises, each unit of currency buys fewer goods and services.
Base on this study, Inflation is the abnormal increase in price.
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TRADE LIBERALIZATION: according to business dictionary, is the removal of or
reduction in the trade practices that thwart free flow of goods and services from one
nation to another. It includes dismantling of tariff such as duties, surcharges and export
subsidies as well as nontariff barriers such as licensing regulations, quotas and arbitrary
standard.
Base on this study, trade liberalization is the lessening of government regulations and
restriction is in an economy in exchange for greater participation by private entities.
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