After over a year of wide consultations and stakeholders’ engagements, President Muhammadu Buhari signed the agreement establishing the African Continental Free Trade Area (AfCFTA) on July 7, 2019, at the 12th Extraordinary Summit of African Union (AU) Heads of State and Government, in Niamey, Niger Republic.
Nigeria’s membership brings the number of countries that have signed the trade pact to 54. The pact seeks to unleash in excess, $2trillion investments into the African economies in the coming years. Nigeria’s membership also solved the apprehension that the biggest economy on the continent wasn’t going to be part of the pact, a situation that would have limited its opportunities.
Industry watchers across the continent consider President Buhari’s signature as a bold step forward for Nigeria, African trade integration and Nigeria’s leadership in the AU.
At the closed-door session of the summit, the president stated that: “The AfCFTA can be a platform for African manufacturers of goods and providers of services to construct regional value chains for made-in-Africa goods and services.
“As leaders on the continent and architects of the African Union, our attention should now focus on implementing the AfCFTA in a way that grows our economies and creates jobs for our youthful, dynamic and hardworking population.”
President Buhari also said: “I wish to assure you that Nigeria shall sustain its strong leadership role in Africa in the implementation of the AfCFTA. We shall continue to engage constructively with all African countries to build the Africa we want.”
The AfCFTA aims to create a single continental market for goods and services, with free movement of people and investments.
Nigeria’s chief trade negotiator, Ambassador Chiedu Osakwe, said President Buhari had demonstrated a remarkable leadership commitment to the due process of the rule of law for trade integration, openness to trade and investment, in a period in the global economy that has been characterised by protectionism.
Osakwe, who is also the director-general of the Nigeria Office for Trade Negotiations, said the feedback in Niamey had been positive to President Buhari’s messages on the predictability and fairness of trade rules, made-in-Africa goods and services, with rules-based safeguards against dumping and injurious trade practices.
Nigeria is now signed onto the largest trade pact in the world, involving 54 countries. Eritrea is the only non-signatory at the moment. Recall that the agreement establishing the AfCFTA was signed at the 10th Extraordinary Summit of the AU Assembly on March 21, 2018 in Kigali, Rwanda.
The agreement covers protocol on trading in goods and services, rules and procedure on settlement of disputes, investment, competition policy and intellectual property rights. In addition, it seeks to expand intra-Africa trade, which currently stands at 16 per cent, in contrast to other regions and continents.
In the European Union (EU), intra-regional trade is 65 to 70 per cent, and in the Asia-Pacific (APEC), 70 per cent. The UNECA has estimated that the AfCFTA and Asia-Pacific can boost intra-African trade to 60 per cent by 2022.
Before Nigeria signed the agreement in Niamey, her office for trade negotiations conducted a nationwide stakeholder sensitization and consultation exercise in all the six geopolitical zones of the country.
The office said it was an exercise without precedent in Nigeria’s political economy as 35 groups, associations and governance institutions were consulted; 3,500 persons were engaged in the various sessions and meetings; five communiqués were adopted and signed in five geopolitical zones.
The AfCFTA entered into force on May 30, 2019 after meeting the threshold of 22 deposits of instruments of ratification as prescribed in Article 23.
Ghana has been confirmed as the location for the AfCFTA secretariat.
The Abuja Chamber of Commerce and Industry (ACCI) has praised President Buhari for signing the free trade area pact. Exclusively speaking to Daily Trust on Sunday on the pact, the president of the ACCI, Prince Adetokumbo Kayode, said Nigeria was competitively positioned to benefit from the free trade pact more than many African countries.
Prince Kayode said most of the fears raised by some stakeholders, such as power and poor transportation network, were in the hand of the Nigerian government. He said Nigeria had nothing to lose but plenty to gain by being part of the free trade area arrangement on the continent.
He said Nigerians were doing business all over Africa and the trade pact would impact positively on them, even beyond Nigeria.
Kayode, who is also the African Union trade policy ambassador, urged Nigeria to be committed to the internal processes of the implementation of the AfCFTA. He called on the government to note that all hands must be on deck to ensure that the organised private sector is involved in all the steps of the agreement. He said the signing of the pact was just one of the steps towards its actualisation and reaping the benefits therein.
He said President Buhari had done the most significant aspect of it and it is now imperative for the organised private sector to be comprehensively integrated into the agenda.
“The organised private sector, where I am a critical player, is willing and ready to work with the government in the process of implementing the agreement. What is important is for us to work assiduously towards boosting our local production and cutting down our net import.
“We must also speed up the implementation of the ease of doing business policy of the Federal Government. In this regard, the organised private sector should be allowed to work with government to monitor the programme and ensure that we fix our infrastructure, in terms of power, transportation system and the capacity of the civil servants to deliver on their mandates. This is the only way we will remain competitive,” he said.
He said the fact that Nigeria signed the AfCFTA did not in any way expose it to any economic or social hazards; adding that it has adequate and all the necessary safeguards against smuggling, dumping and other risks or threats to the internal development of individual countries in the region.
Mr David Aku, a lecturer in the University of Nigeria, Nsukka, also agreed that the AfCFTA would impact positively on the Nigerian economy. He, however, expressed worry over the country’s poor manufacturing capacity and poor state of infrastructure, especially power, in addition to poor implementation of policies, saying they are critical encumbrances that might limit Nigeria’s opportunities. He tasked the Nigerian government to consciously invest at least 50 per cent of budgets in capital projects in the next five years to crystallize infrastructure growth.
He said this would naturally complement the current efforts of the Central Bank of Nigeria (CBN) to unlock capital in the deposit money banks for investments, and the massive support to local industries through the Anchor Borrowers Programme, the textile revival initiative, the palm oil revival programme, among such other programmes. He also taxed the CBN to consider lowering benchmark interest rates so that banks can lend at cheaper rates and spur real sector growth, especially the agro-based industries that have huge potentials to impact on the Gross Domestic Product (GDP).
Recall that the senior director, Nigeria Country Department of the African Development Bank (AfDB), Mr. Ebrima Fall, said recently in Abuja that, “Even with gross international reserves of about $45billion and a pension fund of about N8trillion, Nigeria will need a considerable amount of private finance to bridge its cumulative infrastructural needs of about $3trn by 2024. The time for bridging this gap is now.”
This quantum of investments is key if Nigeria must be a big player in the AfCFTA protocol. Indeed, Nigeria is working hard to really benefit from this deal. If it takes it for granted, other African countries will leverage its over 200million population, the biggest market on the continent, to dump their goods and grow their economy. Will Nigeria prove skeptics wrong? Like they say, the times ahead shall tell. But one thing is certain – there is no going back.
more recommended stories
The truth about Lagos-Ibadan railway project
Not a few Nigerians must have.
Executive order 6: Buhari acquires a big stick against corruption
BY GARBA SHEHU Nigeria’s widespread corruption,.
FG vs MTN: Malami has done it again
Not many who listened to the.
CAMBODIA: Prince Ranariddh injured and wife killed in car crash
A Cambodian prince and former prime.
UNITED STATES: Suspect dead after 20 hurt in shooting at arts festival
A suspected gunman was fatally shot.
AFGHANISTAN: Suicide attack kills at least 18
An explosion in the eastern Afghan.
FEC approves N185b for 14 road projects: A way forward
Road Transport System is said to.
Need for Arewa narrative abroad
When President Donald Trump of the.
When WHO DG visited NCDC
On the 11th April 2018, Dr.
Swiss parliament approves “gender quotas” for big businesses
The Swiss parliament has voted for.