Proposal on Trade Potentials in West Africa by GAC

8/7/2019 Proposal on Trade Potentials in West Africa by GAC

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T r a d e Potent ia ls : I n t h e

W e s t A f r i c a n S u b R e g i o n :

An Investment Proposal

Global Alpha ConsultantsLimited19 Sule Abuka Road, Off Opebi Road, Ikeja, Lagos

Tel: 234-1-255-1052, 7769131Mobile: 0803-465-7611, 0802-312-6214, 0803-324-8321,

Fax: 234-1-255-1052


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Trade Potentials: An INVESTMENT Proposal

Dateline: September 2005

BACKGROUND

Countries in the West African Sub Region

Benin Burkina Faso Cote dIvoire Niger Cape Verde

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MERGEFORMATINETGambia Ghana Nigeria Guinea Guinea-

Bissau

Copyright Global Alpha Consultants Limited 2005 Confidential - 2 -
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Liberia Mali Senegal Sierra Leone Togo

Maps of various countries in West Africa showing Nigerias superiority

General Information on West Africa (2004 EST):

Population: Approximately 250,000,000

Area: Approximately 5.1 Million Km

Currency: Varies from country to country.

Language(s): Approximately 62% of the countries in this region speak French while 38% of the

countries speak English. Each country has tribes with different dialects.

Per Capita GDP: From Ghana (165th country in the world) - $2,200 to Sierra Leone (230th country in

the world) - $500.

Inflation: Approximately 14.2%

Labour Force: Approximately 105 Million

Labour Force - by Occupation: Approximately 60% Agriculture, 15% Industry, 25% Services

Unemployment: 28%

Time Zone: form GMT - GMT+1h00

ISO Code: Varies from country to country

Dialing Code: Varies from country to country.

Continent: Africa

Geography

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As its name connotes West Africa is situated on the west of Africa and has a union comprising

member states known as the Economic Community of West Africa States known as ECOWAS, which

is a body comprising 15 States. The different States in West Africa were colonized by two world

powers, the English and the French with the French having colonized approximately 62% of the

countries within this region. The other 38% are English speaking countries. The West Coast as it is

referred to, also bears the name, the South of the Sahara.

Economics and Politics

West Africa A Historic Perspective.

Africa has been the Dark Continent among the seven continents in the world. Centuries of colonial

subjugation under oppressive regimes kept them in the dark. Africa was used more like a store house

for their requirements of raw material. The colonial masters knew the score- Gold, Diamond, Copper,

Uranium and so on- you name it, Africa has had unlimited quantity to be mined. Then there was

another commodity human beings!! Young, healthy Africans were caught, caged and sold as slaves.

This inhuman business continued unabated for centuries in this cradle of Homo-Sapiens until slavery

was abolished in the middle of the Nineteenth century.

Africa, especially sub-Saharan Africa was all small tribal kingdoms which were always waging waramong themselves mainly for settling minor scores. When slave traders came to the scene, catching

enough captives for the slave traders became a lucrative trade. This was a legitimate affair as far as

they were concerned because they sold only the captives. Besides, captives could be used to carry head

load of farm products from inaccessible interiors to the traders vessels at the sea port. When slave

trading was abolished by the middle of 19th century the trans-Atlantic trade became less profitable.

Almost all West African countries had no industrial base to exploit their vast potential in industrial

raw materials. Rich deposits in Bauxite, Phosphates, Iron ore, Diamond, Gold, and Copper etc.

required good capital investments. Colonialists were interested in exporting the ores to their home

countries but when the colonies got their political freedom, they found themselves lacking in the

necessary infrastructural facilities like roads, equipments, ports and above all management skills.

There may perhaps be exceptions to this situation but in the absence of goodwill and mutual trust

among the countries, there was no collective effort possible. ECOWAS expected to provide an answer

to all these inherent problems.



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Trade Potentials: An INVESTMENT ProposalEconomic Community of West African States (ECOWAS) is a regional organization of 15 West

African nations formed in 1975. There were 16 nations in the group until recently when Mauritania

withdrew membership from ECOWAS. They include: Benin, Burkina Faso, Cape Verde, Cte

d'Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra

Leone, and Togo.

The main objective of forming ECOWAS was to achieve economic integration and shared

development so as to form a unified economic zone in West Africa. Later on, the scope was increased

to include socio- political interactions and mutual development in related spheres.

ECOWAS made significant contributions in improving relations among neighboring member

countries from the very beginning. Within a year of its founding, Nigeria and Togo joined hands to

form a defense treaty which subsequently became a non-aggression pact in 1986. ECOWAS

members recognized the advantages of democracy over authoritarian or totalitarian dictatorships and

formulated a declaration of political principles which committed every member to uphold democracy

and the rule of law.

Trade and Monitory Union

A common external tariff system for mutual trade was the aim of Trade and Monitory Union.

Elimination of regional tariffs and any obstructions in the way of expanding trade relationships among

member states were to be removed once and for all by this protocol.

Travel, Transport & Communication

The purpose was to allow free and uninhibited travel facilities to all citizens of member states in every

member country. They are free to settle down in any part of the states and conduct any legitimate

business what so ever. This protocol was signed in 1979. Presently, there is the ECOWAS passport

that gives the holders free access within the West African sub region.

ECOWAS in Different Roles

The objective of the organization was initially the economic integration of the West African States.

But in all practical sense, it was recognized that there were some pre-requisites for achieving the

objectives. As the membership profiles indicate, all the 15 members can be classified into different

groups.



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Trade Potentials: An INVESTMENT Proposal1. Rich in natural resources strong economy.

2. Rich in natural resources weak economy

3. Medium resource reserves weak economy

4. Less resources poor economy

Sierra Leone, Nigeria, Mali , Liberia, Guinea, Ghana and Cote dIvoire are all having reasonably

good or very rich natural resources. But some of them are still struggling to meet their operating

expenditure of the governments without external financial aid. Regrettably enough, 30% to 80% of the

people live in these countries below poverty level. A large nation like Nigeria which has a sizeable Oil

production has to go for financial assistance from IMF only because of political instability, corruption,

and poor macro-economic management.

Similar is the case with Cote dIvoire and Liberia. Mali needs external financial assistance for the

exploitation of its mineral wealth. In spite of known reserves in Iron Ore, Bauxite, Manganese, Tin,

Uranium, Gold, Phosphates rocks, Mali remains one of the poorest countries in the world. Their

urgent need is proper economic program.

Guinea is another case. Guinea has 30% of the known reserves of Bauxite in the world. And they have

Iron Ore, Diamonds and Uranium deposits as well. Still, about 40% Guineans are poor. And the nation

is listed among HIPC-Highly Indebted Poor Countries. Their woe is related to troubles at the borders.

In general, root causes for the economic worries of these countries are either mismanagement or the

lack of will to solve their own problems.

The greatest advantage with ECOWAS is that its leadership has the necessary political sagacity to

realize the problem and intellectual acumen not to handle it with kids gloves. They realized that the

economic integration and social development among their member states can be brought about only if

they tackled each of the main issues systematically and thoroughly.

With these points in view, they decided to increase the scope of the objective of ECOWAS from

economic integration and social development to a host of different programmes. A revised treaty was

signed in 1993 adding increased political co-operation among the member states as an objective. A

common market and a single currency for the ECOWAS as an economic objective were envisaged. A

common West African Parliament, Economic and Social Council and A court of Justice were other

http://www.ecowas.info/sleone.htmhttp://www.ecowas.info/nigeria.htmhttp://www.ecowas.info/mali.htmhttp://www.ecowas.info/liberia.htmhttp://www.ecowas.info/guinea.htmhttp://www.ecowas.info/ghana.htmhttp://www.ecowas.info/icoast.htmhttp://www.ecowas.info/sleone.htmhttp://www.ecowas.info/nigeria.htmhttp://www.ecowas.info/mali.htmhttp://www.ecowas.info/liberia.htmhttp://www.ecowas.info/guinea.htmhttp://www.ecowas.info/ghana.htmhttp://www.ecowas.info/icoast.htm


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Trade Potentials: An INVESTMENT Proposalaspects included in the treaty. The Court of Justice was expected to replace the Tribunal in order to

enforce the majority decision of the community. The treaty signed in 1993 also authorized the

community with the responsibility of preventing and settling regional conflicts...

Even while the treaty was being drafted, quite a few protocols were also prepared by the ECOWAS

and approved by member states.

With these issues properly addressed by ECOWAS especially as regards Trade, a level playing

field has been offered to prospective investors doing business across West Africa. This forms the

crux of this proposal as Ecowas Traders Limited/Interregional Traders Limited, a newly formed

and wholly Nigerian company intends to invest in the possibility of linking with manufacturers

across West Africa with the possibility of bringing their product for sale in the Nigerian market.

It also would hope to explore the possibility of selling Nigerian products in these countries.

To successfully execute this project, Enlightened Services proposes a three-step mechanism which

will constantly be in place to achieve our objectives.

1. Do a thorough research in the various countries in West Africa thereby identifying their

raw, semi-finished and finished goods that would compete favourably in the Nigerian market.

2. Work out the possibility of having Joint Venture agreements/Sales agreement between

its client, Ecowas Traders Limited/Interregional Traders Limited and these companies.

3. Determine the tax and tariff restrictions that could be imposed on the importation of

these products into Nigeria.

This proposal is prepared after due consultation with its client.

Project Initiator: Ecowas Traders Limited/Interregional Traders Limited

Project Facilitators: Enlightened Services, Nigeria

Fund Providers: Ecowas Traders Limited/Interregional Traders Limited

Management Consultants: Enlightened Services



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EXECUTIVE SUMMARY

Enlightened Services is a management and financial consultancy company. It is reputable for its high

network and marketing outreach as will as being a known brand and customer builders. Successful

companies thrive on accessing, assessing and delivering information, needed in time before thecompetition gets it. This attribute of Enlightened Services has endeared it to their clients. It has a

corporate mission ofenlightening its clients in particular, and the public in general, in the 21 st century

though veritable management tools of communication such as its 7Ps of successful seminars,

workshops and conferences. It is also the coordinator of Books Without Boundaries (BWB), a

collaborative project between The SchoolWorld Internet Education Foundation and the Flat

Stanley Project. Books Without Boundaries is a project designed to encourage schools and

interested international businesses and organisations assist schools and facilities in developingcountries through contribution of educational books and materials.

Doing Business in West Africa

The objective of ECOWAS with regards to trade is to provide a common region between countries in

West Africa devoid of barriers to business entry and exit. The coming together to form an economic

block aims to encourage any company with the wherewithal to produce goods in say Nigeria and sell

them in Guinea, with little or no inference from the Guinean government. In the same vain, a

manufacturer of goods in Senegal can sell goods in Nigeria. This manufacturer would only be

contending with the cost of transportation to be competitive. As such, where a particular company in a

country has dexterity in a particular good it manufactures, it does not suffer much from imposed tariffs

in a another country and as such can deliver its goods at a cheaper cost.

This scenario opens up trade opportunities for both the small and large countries. For the small one it

gives its companies access to huge markets and since what they would be selling are products in which



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Trade Potentials: An INVESTMENT Proposalthey have some level of expertise, and so would fancy their chances in large markets where the

expertise might not be available or huge enough, to leave them without any profit on their sales. For

the large countries it gives their companies access to more market outside their country especially

where they have superior proficiency in the delivery of these products and services. Also, the fact that

big companies (whether in small or large countries) produce in large volumes guarantees that they can

sell their products at a cheaper rate. This usually cancels out the effect due to transportation and

minimal tariff in other countries.

With this trade liberalization it is no longer surprising to see a lot of Nigerians traveling across its

borders to neighbouring countries on business visits with the aim of researching on the opportunities,

establishing one or solidifying an already established one. Before now Nigerians seemed content with

doing business only within the ambit of Nigeria, as it was usually the case of Nigeria welcoming itsbrothers from West Africa. These days the influx of West Africans has further increased as

businessmen try to enter the huge Nigerian market.

Unfortunately, a lot of these businessmen, even with the potentials to make it big in the Nigerian

market are usually intimidated by the hugeness of the market thereby failing to venture into it. Among

those who do, are those who get consumed by it probably for lack of proper planning and structuring.

There is also the category of businesses that succeed only in the short run usually because they lack

the necessary structures to keep it going even when they might have laid down a plan. Finally there are

those businessmen who already have proper plans and structures on ground that guarantee success in

the long run.

This Project when fully implemented will ensure that Ecowas Traders Limited/Interregional

Traders Limited is able to raise the required information it needs to adequately meet its

objectives of being a truly West African Brand. The continued interest in the Nigerian market

by investors in the West African sub region would continue to expand its relevance coupled with

the fact that it hopes to be able to increase the size of the investment of its established partners in

the Nigerian market.

PROJECT APPRAISAL/ REQUEST SUMMARY

The importance of truly having a first hand knowledge of the business environment in the different

West African States cannot be over emphasized as such there would be a need to visit these countries.



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Trade Potentials: An INVESTMENT ProposalEnlightened Services has therefore proposed 6 stages of this research which would see it travel to 12

ECOWAS countries and Equatorial Guinea over a 10-week period commencing on the 3rd of October.

Trips to Niger and Cape Verde have been left out because of the poor economic conditions of the

former and distance of the later. Before commencement we would spend the next one week

commencing from 26th

of September to gather information and make necessary contacts for the trips.

We have also selected Base Countries from where we would operate over this period based on our

understanding of the locations, available contacts, product offering, acceptability of Nigerians,

language spoken, and nearness to other countries within the West Africa sub region. These cities

include Ghana (Accra), Sierra Leone (Freetown), Senegal (Dakar) & Cote DIvoire (Abidjan). Other

cities like Benin and Equatorial Guinea are not entirely Base Countries as visits would be made solely

to these countries and not to serve as a transit point to other cities.

Phase One would involve a trip to Ghana (Accra 3 Nights) from where visits would also be made to

Togo (Lome- 1 Night) and Burkina Faso (Ouagadougou 1 Nights).

Phase Two would involve a trip to Sierra Leone (Freetown 2 Nights) from where visits would also

be made to Liberia (Monrovia- 1 Night) and Guinea (Conakry 1 Night).

Phase Three would involve a trip to Senegal (Dakar 2 Nights) from where visits would also be made

to The Gambia (Banjul- 1 Night) and Guinea Bissau (Bissau 1 Night).

Phase Four would involve a trip to Cote DIvoire (Abidjan 2 Nights) from where visits would also

be made to Mali (Bamako- 1 Nights).

Phase Five would involve a trip to Benin (Cotonou 1 Night).

Phase Six would involve a trip to Equatorial Guinea (Malabo 1 Night).

In is important to note that after every phased trip (Phases 1 to 4) a week interval is given before the

commencement of the other phase to allow for information compilation, review and release to Ecowas

Traders Limited/Interregional Traders Limited. Also Phases 1 to 4 would involve the participation

of two researchers (optional). Phases 5 and 6 would be completed within a one-week period and would

involve only one researcher. Upon completion of these phased trips, the final report would be released

to Ecowas Traders Limited/Interregional Traders Limited.

It is pertinent to note that the information gathered would be treated with the utmostconfidence.



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Trade Potentials: An INVESTMENT ProposalTo properly carryout this exercise the Project cost has been put at One Million Five Hundred and

Twenty Eight Thousand Nine Hundred Naira (N1,528,900). This amount includes the Direct Cost of

embarking on this trip and Management Fees. The breakdown of the costs is attached.

We would be willing to commence operations upon the receipt of N400,000 which covers full

payment for phase one and part Management Fees. Payment can be done on a phase by phase basis.

STATEMENT OF FACT/NEEDS

From Despair to Hope: For decades, the economic promise of West Africa has been held hostage by

democratic governments riddled with corruption, dictatorships and oppressive military regimes.

In Nigeria for instance; under the often brutal reign of General Sanni Abacha public infrastructure and

morale were at an all time low. Nigeria was a place for businesses to avoid at all costs. Shakedowns

and robberies by uniformed officials were not unusual. A business person could not pass through the

Lagos Airport without making substantial contributions to airport employees and sometimes officials

to guaranty their safety and the appearance of their luggage. Shipments into the Port of Lagos were

often lost to theft. It was indeed Nigeria's Era of Shame.

However, the death of Abacha brought to power an extraordinary leader, General Abubukar.

Abubukar consolidated his power and almost immediately set Nigeria on a course toward Democracy.

Issuing orders calling for new elections and making the strongest possible statements about the

government's intent to take serious action against those who engaged in official acts of corruption,

Abubukar took the reins of power in a decisive way that gave Nigerians hope for the future.

Abubukar's threats against official corruption became action as some Nigerian officials found

themselves under house arrest - forced to remain in their own homes under surveillance untilmisappropriated funds (in the billions of Naira) were returned to the treasury.

Today a return visitor to Nigeria can't help but notice the changes. Starting with Murtala Airport - now

bright and cheery compared to the dark days of Abacha when a trip from the plane to the outside was

akin to walking through a tunnel with a lantern.

Democracy has taken a strong foothold with the reelection of President Obasanjo (The second time a

Civilian administration has handed over to another democratically elected one, and with political

freedom, economic freedom has the opportunity to flourish.



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The same can be said for a number of other countries in West Africa that were held hostage by the

dictates of their leaders. In some of these countries, Liberia, Sierra Leone for instance years of civil

war brought these countries to a state of disrepair that would require decades of rebuilding.

Fortunately they are on the right part to recovery after embracing the ideals of democracy. For Togo,

years of dictatorship are over after the death of its leader of over twenty years. Cote dIvoires move to

regional excellence which was almost halted due to civil war has been put back on track. For Ghana it

has been excellent reviews all the way both from African and International observers, while Nigeria is

steadily returning to its status as the Giant of Africa, especially with its role in brokering peace in

Liberia, Sierra Leone, Sao Tome and Principle, Equatorial Guinea and most recently in Togo. In all,

these pieces of cheering reports portend good news for trade across the various States that make up

West Africa.

Entrepreneurial Spirit: Even in the darkest days of Abacha's reign, one could not help but notice the

industriousness of the Nigerian people. Today, that entrepreneurial spirit, so long dormant or

manifested only in the most modest of ways, has once again begun to flourish. While most Nigerians

are still far from able to participate in the economic mainstream, there are more and more signs that

Nigeria is on its way to building the kind of middle class that provides stability to the political

landscape and promise to the commercial landscape. This entrepreneurial spirit is the thrust behind the

influx of Nigerians into neighbouring African countries with the aim of determining how they can sell

their goods in these countries. It is also the thrust of a lot of West Africans who want to come into

Nigeria unfortunately a lot do not know how to go about it.

The Marketplace - an Overview of West Africas Economic Potential:With a total population of

over 125 Million, Nigeria represents Africa's single largest potential market. It accounts for over 50%

of West Africans. The city of Lagos alone is home to more than 15 million people. The market in

Lagos alone is arguably bigger than the markets of the other West African countries put together.Additionally, other factors make Nigeria an attractive place for any purpose driven company seeking

to break into the Nigerian marketplace.



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MANAGEMENT PLAN

Enlightened Services will be managing this project in line with best practices in the privatesector. This is necessary so that it can guarantee the results that it promises and to provide

monitoring and optimal checks and balances for the financial aspects involved.

Project Organization

Enlightened Services will also be responsible for the project organization but will becollaborating with Ecowas Traders Limited/Interregional Traders Limited.

Costs

Costs schedules will be presented on an as required basis after preliminary interest andapproval is secured.

Schedule

All developments will be started and completed within a 12-week time limit from the initialfinancial mobilization and on the condition that payments for all the phases are not delayed.

EVALUATION

This project would have served to meet one of the program objectives of Enlightened Servicesas previously conceived and stated if it gets delivered on time and with accuracy.



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QUALIFICATIONS

Enlightened Services is capable of bringing this project to fruition. In achieving this projectsobjectives, it plans to engage the services of its partners, and together these mutual goals would

be achieved.



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CONCLUSION

We will be looking forward to a working with you on this project, and which to state onceagain that this project would be treated with utmost confidentiality.


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Proposal on Trade Potentials in West Africa by GAC

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