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Extent of IIT (IIT) between ECOWAS and EU Intermediate Products (First Objective)

CHAPTER FIVE EMPIRICAL ANALYSIS

Trade 5.9. Nigeria’s Intra Industry Trade in Intermediate Products

5.3 Discussion of the Results

5.3.2 Extent of IIT (IIT) between ECOWAS and EU Intermediate Products (First Objective)

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5.3.2 Extent of IIT (IIT) between ECOWAS and EU Intermediate Products (First

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Figure 5.10: Trends of Cote d’Ivoire’s IIT with EU in Intermediate Products (2001 to 2011)

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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Figure 5.11: Industrial Composition of Cote d’Ivoire’s IIT with EU in Intermediate Products 2001

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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5.12: Industrial Composition of Cote d’Ivoire’s IIT with EU in Intermediate Products 2011

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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recalled again that Ghana has IIT with EU in only 71 final products in 2011, while her IIT in intermediate products occurred in 182 products.

Despite the differences in the number of products in which the two forms of IIT have occurred, the intensity of IIT was very close.

Aside the fact that the average IIT in intermediate products between Ghana and EU was lower than 50 per cent between 2001 and 2011, none of the 15 industries considered in this study has IIT of 50 per cent, except animal and animal products. The implication of this result is that the import of the products in which Ghana has IIT with EU outweighs the exports. Mineral and chemical products are the other industries Ghana has appreciable and growing IIT with the EU. The two industries have 49 per cent and 34 per cent IIT intensity during the period. This implies that the quantity of Ghana‘s exports in the intermediate products in which she has IIT with EU have been increasing in the period. The presence of several affiliates of EU multinationals in Ghana producing chemical products attest to the possibility of IIT between Ghana and EU. Some of such affiliates of EU multinationals in Ghana include PZ Cussons PLC, Air Liquide SA Etu Exploit Procedes GC, L'oreal, Basf SE, and Astrazeneca PLC.

(iii) Analysis of IIT in Intermediate Products between Nigeria and EU

Similar to Ghana and Cote d‘Ivoire, Nigeria‘s IIT in intermediate products is higher in number than the final products. That notwithstanding, the intensity of Nigeria‘s IIT in final products outweigh that of intermediate products. The IIT in intermediate products between Nigeria and EU increased from 0.0882 in 2000 to 0.3370 in 2011. This implies that the intensity of imports in the 142 intermediate products that Nigeria has IIT with EU were more than the exports. Precisely in 2011, the IIT favoured EU (66.0%) at the expense of Nigeria (34.0 %).

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Figure 5.13: Trends of Ghana’s IIT with EU in Intermediate Products (2001 to 2011)

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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Figure 5.14: Industrial Composition of Ghana’s IIT with EU in Intermediate Products 2001

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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Figure 5.15: Industrial Composition of Ghana’s IIT with EU in Intermediate Products 2011

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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At industrial level, intensities of IIT in wood and wood articles and Pulp of wood of wood and fibrous are very encouraging till 2011. Other three industries Nigeria recorded quite encouraging IIT with EU are animals and animal products, prepared foodstuffs and beverages. In 2011, the three industries had 53 per cent, 52 per cent and 44 per cent of intensity respectively. The result suggests that Nigeria‘s exports of IIT in intermediate products to EU in the first two industries outweigh the imports from EU. There are several national and multinational industries in Nigeria that exports these products to countries of the world. Some of them include Bayrem Group Internationals, Bellet Construction PLC, Bissy Kind INT LTD, Cosource Venture, Delta Forestry, Eddy Bros Nig LTD, EG Woods LTD, Hephzibah Resc and Inv LTD etc.

The other three sub-sectors in which Nigeria recorded quite encouraging IIT in intermediate products with EU are base metals, animals and animal products and prepared foodstuffs and beverages. As at 2011, the two sub-sectors had 53 per cent, 52 per cent and 44 per cent respectively. This implies that quite substantial part of these intermediate products exchanged between Nigeria and EU in these sub-sectors recorded high exports. This result may be expected because most of the EU based multinationals that have affiliates in Nigeria producing foodstuffs and beverages, these affiliates will definitely have to exchange intermediate products with the mother companies or other affiliates in EU. Some of the numerous affiliates of EU multinationals that produce foodstuffs and beverages are Nestlé S.A., L'Arche Holding SA, Zuivelcoöperatie Friesland Foods U.A, Wishart Investments Inc, British American Tobacco (Investments) Ltd , Lac B.V, Cadbury Schweppes P L C. The 53 per cent IIT in intermediate products Nigeria has with EU in metal and metal products is equally substantiated with the several metal industries that exports to EU markets. Although IIT in intermediate products between Nigeria and EU in other sub-sectors are quite low, most of them show potentials.

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Figure 5.16: Trends of Nigeria’s IIT with EU in Intermediate Products (2001 to 2011)

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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Figure 5.17: Industrial Composition of Nigeria’s IIT with EU in Intermediate Products 2001

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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Figure 5.18: Industrial Composition of Ghana’s IIT with EU in Intermediate Products 2001

Source: Computed, underlying data from World Integrated Trade Solution (WITS) database

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5.4 Determinants of IIT in final products between selected ECOWAS countries and