CHAPTER ONE
INTRODUCTION
1.1      Background of the study
Foreign policy refers to actions chosen by the national government to maximize its strategic goals and objectives in the international arena. Every state will have established goals, a set of options, and an algorithm for deciding which option is most appropriate in meeting its goals1 . Thus, foreign policies are the strategies that guide the actions of governments in the international system as they spell out the objectives state leaders pursue in a given situation or relationship2 . For Funso Adesola, “foreign policy could be seen as the totality of all actions, decisions, overtures, and /or interactions between and among states in the international system”3 . Put differently, foreign policy could be based on economics, politics, culture or the creating of co-operation or understanding among nations of the world. It is the sum total of the interactions between and among domestic economies and policies of world nations. Since independence, Africa had been the corner stone of Nigeria’s foreign policy. Issues that concerned the continent were the primary focus of the Nigerian government. Nigeria played unmatched role in restoring peace to conflict-ridden African countries such as Congo, Sudan, Liberia and SierraLeone. In these endeavors, Nigeria committed huge human and material resources. Although Nigeria played the role of a big brother, despite its sustained assistance, it has not been accorded the appropriate recognition for its leadership role in the continent. Instead, Nigeria has been the butt of derision by several African states. For instance, some Francophone African countries brazenly disdain Nigeria and exhibit hostility by subjecting Nigerians living in their midst to varying degrees of torture and humiliation. The poor perception of Nigeria in the international community is attributed to ineptitude in political leadership and economic comatose into which the country has been steeped for several years. This paper, therefore, argues that economic diplomacy should be the main thrust of Nigeria’s foreign policy in the new political dispensation as it will go a long way in solving several of the pressing economic problems that have bedeviled the country. The historical antecedents of Nigeria’s foreign policy owes much to the vision of Alhaji Sir Abubakar Tafawa Balewa, Nigeria’s first Prime Minister and Head of Government, October 1960 to January 1966, and can be located in his famous speeches during the immediate pre and post independence periods. These speeches include his statement in the House of Representatives on August 20, 1960; his Independence Day Address on October 1, 1960 and his Acceptance Speech on the occasion of Nigeria’s admission into the membership of the United Nations in New York on October 8, 1960. From the late 1950s especially from 1958 when he became head of the Self-government and when Nigeria’s Independence was slated for October 1, 1960, Balewa articulated in these speeches the fundamental principles that would guide Nigeria’s external relations after independence and the basis upon which the country would relate with other countries of the world, as well as what its posture would be towards international organizations. The policy of economic diplomacy as a central plank in the correction of the imbalances in the political-economy of the Nigerian state may as well be written off, if one considers the rascality of the operators of the country in the period under discourse. However, for a keen observer and an objective researcher, the policy scored some measure of success between 1988 an 1993. Like in all human ventures, the gains of the ‘new’ economic diplomacy should be seen in terms of long and short term perspectives. Policies at all levels take time to mature and in the case of the ‘new’ economic diplomacy, expectation of tangible and handsome results may be a tall dream, within a short period of five years that the General Ibrahim Babangida regime operated the policy. However, this observation does not suggest a complete failure of the policy. One of the most important objectives of economic diplomacy as a state policy was the development of an enduring economy for the Nigerian people, especially through the attraction of foreign investment. This necessitates the reorganization of the Ministry of External Affairs (MFA) and this was complemented at the domestic level by a host of reforms aimed at achieving positive results. These included the adoption of a new investment code whose objective was to make the process of company incorporation easier; the amendment of the indigenization decree of the 1970s to increase the number of foreign investors in the economy; the elimination of bureaucratic `procedures associated with profit repatriation and dividend remittance, and the introduction of new tax relief measures (Olukoshi and Idris, 1991). With this recap, it is easy to discuss some of the gains of economic diplomacy within the period and scope of this study The policy, within a short time, created a new awareness and interest among the private sector operators, especially in the nation’s export promotion drive. The government introduced very attractive insurance scheme for exports of both manufactured and agricultural goods. Although, it is difficult to quantify the benefits of these measures in cash values, it is reasonable to submit that it had a multiplier effect on the country’s economic growth. The policy of ‘new’ economic diplomacy was pre-occupied with marketing the Structural Adjustment program (SAP) to the outside world.∗ This brought a modest increase in foreign investments and a little halt in the divestment of foreign investment. As a matter of fact, promotional agencies like Commonwealth Development Authority (CDA) and Canada International Development Agency (CIDA), which had left Nigeria earlier, returned to the country with more vigour (Ike Nwachukwu Years). At this point, it is imperative to make some clarifications of the concept of economic diplomacy. This brand of diplomacy involves the decision-making, policy-making, and advocating of the sending state’s business interests, and requires the application of technical expertise that analyze the effects of a country’s (receiving state) economic situation on its political climate and on the sending state’s economic interests. The sending state and host state, foreign business leaders as well as government decision-makers work in synergy on some important issues in foreign policy, such as technology, the environment and HIV/AIDS as well as in the traditional areas of trade and finance. Qualities needed for proper execution of economic diplomacy are versatility, sound judgment and strong business skills12 . The scope of economic diplomacy comprises international and domestic economic issues including the “rules for economic relations between states”. Due to increased globalization and the resultant interdependence among states, economic diplomacy has gone deeper into domestic decision making to cover policies relating to production, exchange of goods, services and instruments (official development assistance). Economic diplomacy is therefore, defined as: The process through which countries tackle the outside world, to maximize their national gain in all the fields of activity including trade, investment and other forms of economically beneficial exchanges, where they enjoy comparative advantage; it has bilateral, regional and multilateral dimensions, each of which is important13 . Thus, economic diplomacy encourages and promotes investment, protects deals from inception to signing of contracts and in fact markets an entire nation as if it is a business outfit itself. The diplomats would conduct trade events and seminars, attend trade shows, visit potential investors and be proactive in marketing the attributes of their country. Success in this endeavour requires knowledge of the business process, of the home country’s economy, and of salesmanship. In this wise, and with proper training, diplomats become essential link in the strengthening of their economies by private investors, with governments facilitating the process.