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Strengthening economic ties with Nigeria

$80 million in Czech exports to African country in 2006

By Riva Froymovich
Staff Writer, The Prague Post
July 4th, 2007 issue

COURTESY PHOTO
President Václav Klaus shakes hands with Nigerians during a state visit to their country in July of last year.
The Czech Republic has found a growing business partner in Nigeria, one of the fastest urbanizing countries in the world, just as the European Union begins a new set of goals for its future relationship with Africa. 
President Václav Klaus nourished that partnership with the sub-Saharan nation over cheese roulade and rabbit leg on the Prague Castle grounds late last month. While sipping red wine, he talked economic cooperation, trade and energy with the emir of Kano and the king of the Yoruba tribe — but not economic assistance. 
The dialogue was in line with a new EU-Africa relations proposal adopted by the European Commission June 27. It stresses reciprocal alliances over the current EU role of benefactor. The policy will be further discussed at the EU-Africa Summit in Lisbon in December.

“The president spoke with both rulers, who have a great influence over their countries, about the situation in Nigeria and Europe and about economic cooperation between our countries,” said Petr Hájek, spokesman for Klaus. “Nigerian representatives appreciated the relationships between both countries highly, and they confirmed a strong interest to deepen economic cooperation.”

Czech companies are now building power plants in Nigeria and provide materials for the country’s military. Nigeria’s army uses the Czech L-39 aircraft and is reportedly making plans to purchase the Czech-made subsonic L-159 combat aircraft.
Last year, exports to Nigeria from the Czech Republic reached $80 million (1.7 billion Kč). That could rise to $100 million this year, according to the Czech News Agency (ČTK). They include diesel aggregates for power producing, non electric motors, Škoda cars and metallurgic products, said Industry and Trade Ministry spokesman Tomáš Bartovský.
From Nigeria, the Czech Republic imports mostly native rubber and cotton materials, he said.
“Nigeria was always among ... the important trade partners of the former Czechoslovakia in the sub-Saharan region,” Bartovský said.
Today, Nigeria is the country’s second-largest sub-Saharan trading partner, after South Africa.
With upcoming deals and a growing lucrative partnership, Nigeria could mov into the No. 1 spot, Deputy Foreign Affairs Minister David Gladiš told ČTK.
Like the Czech Republic, Nigeria is considered an economic standout in its region.
Nigeria was named one of Africa’s four largest economies in a June report by the World Economic Forum, African Development Bank and World Bank. The country ranked the 11th top nation out of 29 in Africa.
However, the same report voices alarm over signs of mismanagement and poor government accountability.
Nigeria was ranked 101st out of 125 countries from around the world on the Global Competitiveness Index for 2006–07. That number is down from last year, when it pulled in the 83rd spot out of 117 countries.
The report identified Nigeria as having “weak and deteriorating institutions — including a serious security problem.” It cited “a change for the worse in macroeconomic management.”
“Despite its huge revenues from record-high oil prices, the large majority of the population remains very poor and without access to basic health care and education,” the report said.
Those gaps in the delivery of services and a stable infrastructure present an opportunity for the Czech Republic to swoop in.
Most agree that one of the country’s greatest strengths is its heavy industry, an area where Nigeria needs help. indeed, Czech companies have many potential deals in the energy sector, Bartovský said.
As the world’s fifth-largest oil producing nation, Nigeria requires the infrastructure Czech companies could build.
That type of “win-win” arrangement is exactly what the EU commissioner for development and humanitarian aid, Louis Michel, has been campaigning for.
He stressed that African nations, including Nigeria, should be seeking mutually beneficial partnerships in trade and investment with European countries, such as the Czech Republic, at the EU-Africa Business Forum last month.
“The emergence of a genuine strategic partnership between our two continents is a priority for the EU. It will help us to define joint answers to our common challenges and to Africa’s development needs,” Michel said in a statement.
Currently, the EU has no other option, since the World Trade Organization previously outlawed the EU’s preferential trade agreements with the African, Caribbean and Pacific region.
However, the commissioner’s spokesman, Amadeu Altafaj-Tardio, said that the initiative for the Economic Partnership Agreement represents more than rewriting paperwork.
“We want to have a grown-up relationship,” he said.
“[We] think we should take this opportunity to change our approach in terms of trade and development,” Altafaj-Tardio added.
It is important for the Czech Republic to coordinate its activities in Nigeria with the EU to be more effective. But the challenge is to use that partnership to bring change to Africa, he said.
“We consider that our development cooperation is an effective tool,” to solve concerns there, Altafaj-Tardio said.
In June, the EU expressed its disappointment with Nigeria when Umar Yar’Adua of the ruling Peoples’ Democratic Party was declared president with 72 percent of the vote in an election that was widely considered a farce.
Nigeria’s revival of a democratic system is a condition for the EU’s relationship with the country. In 1999, it restored ties with Nigeria following a four-year freeze after nine pro-democracy campaigners were killed.
Nigeria, however, is skeptical of the Economic Partnership Agreement and how it might impact trade, according to Bartovský. However, he said, the Czech Republic looks forward to more fruitful negotiations.

Riva Froymovich can be reached at rfroymovich@praguepost.com


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