How can the maritime sector benefit from the African Continental Free Trade Area (AfCFTA) agreement? It is via strategic positioning and policies, experts have said. Others are, however, worried that with unreliable power supply, high interest rate and hostile investment climate, Nigeria’s capacity to take full advantage of the pact is suspect, MUYIWA LUCAS reports
Former Central Bank of Nigeria (CBN) Governor Prof. Charles Soludo is an authority on economic issues. When he speaks, the world listens.
Presenting a paper at a forum titled: The Platform during the last Independence Day celebration, he said: “Economic restructuring of the future is about positioning Nigeria to compete and win in an increasingly complex world, thereby guaranteeing the security, prosperity and happiness of the 400 or 752 million Nigerians, in a world without oil.”
Soludo’s paper was titled: Re-designing the Nigerian Economy with New Ideas.
His submission was a reinforcement of the various positions of stakeholders in the sector.
At a two-day conference on Maximising the benefits of AfCFTA’, experts were united on the need for proper positioning of the industry to take advantage of the AfCFTA regime which entered into force on May 30, this year, with the first phase taking effect in 24 countries.
Leadership in shipping
For the Nigerian Maritime Administration and Safety Agency (NIMASA) Director-General, Dr. Dakuku Peterside, the new trade regime offers symbiotic opportunities for African countries, especially in maritime.
At the conference, organised by The Journal of Freight and Energy, at the RockView Hotel, Apapa, Lagos, Petersided said as African continental free trade area grew trade among member nations, so would the shipping industry.
“In this new trade arrangement, any country that is able to dominate the shipping industry will reap more than its proportionate share of the benefit accruing from the new arrangement, any country with an efficient maritime infrastructure and tonnage capacity will eventually become the major gateway to Africa,” he said.
According to Peterside, with a single market and uniform tariff, the rest of the world will treat Africa as a single entity with a single-entry point.
“Most shipping companies will not be calling at multiple ports in Africa the way they do. They will only drop their cargoes through a single corridor from there it will be moved to respective African countries in small ships or by other modes of transport,” he explained.
He said the country, with great maritime potential, was a natural choice to lead in shipping when the free trade area takes off.
Break barriers, be cautious
For the Chairman of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), Abubakar Tsanni, there is a need, under the AfCFTA regime, for the removal of barriers in freighting. He assured that the Council would ensure that the barriers, which prevent Customs brokers and freight forwarders from practising in other countries are broken.
Besides, Tsanni said there was a need for greater attitudinal change and deployment of good vehicles on roads, to support logistics and supplies for freight forwarders in the country. With this, he said Nigeria would have been seen to be conforming with standard trading community expectations. This, he explained, is because, under the AfCFTA regime, more trucks and tankers would be coming from outside the country.
He charged operators to be prepared for the AfCFTA regime, warning that the act of looking for funds to clear consignments after they had arrived at the ports might no longer be tenable because of increased risks of port congestion and cost of demurrage.
The founder, National Association of Government Approved Freight Forwarders (NAGAFF), Dr Boniface Aniebonam, however, called for caution.
According to him, industry regulators like the Standards Organisation of Nigerian (SON) must raise the bar in manning the country’s borders, to ensure that the abuse seen in the Econonmic Community of West African States (ECOWAS) Trade Liberalisation Scheme (ETLS), which has made the scheme a failure, is not repeated under AfCFTA, given that this initiative involves larger African continental free trade area.
“The agency (SON) has a lot of questions to answer regarding ensuring that Nigeria does not become a dumping ground for substandard products from other African countries when the AfCFTA agreement becomes fully operational,” he warned.
Is Nigeria ready?
The Chief Executive Officer (CEO), The Journal of Freight and Energy, Ismail Aniemu, noted that the conference was “as a first step at engendering interactions aimed at preparing the Nigerian business community in the maritime industry for the AfCFTA regime.”
Aniemu’s submission presented food for thought for stakeholders who have continued to charge governments to expedite action in preparing the country for the African continental free trade area.
One of such stakeholders is the National President of Association of Nigerian Licensed Customs Agents (ANLCA), Iju Nwabunike.
Decrying the poor production and export capacity of the country, Nwabunike said Nigeria was not ready to take advantage of the AfCFTA pact.
In justifying his position, he said there was an urgent need to address issues of corruption, power supply and insecurity, which, he said, could inhibit the flow and growth of businesses within the country and on the continent.
Besides, Nwabunike argued that aside oil, the country had not shown enough capacity and comparative advantage to produce things for export. He revealed that other African countries were moving at a faster pace in building their local manufacturing capacities by encouraging greater production, expanding chances for their local manufacturers and promoting entrepreneurship.
The ANLCA chief said his position was based on his experience and interaction with countries, such as Niger, Ghana, Cameroon and others, especially, which he said confirmed that the country was lagging behind these countries in terms of preparation for a robust participation in intra-African trade.
“The agreement will benefit countries that are producing more than countries whose factories are struggling to survive and have little or nothing to export. For now, apart from oil, what do we have to give other African countries? There is urgent need to get our agricultural and manufacturing sectors running better than they are doing,” Nwabunike said.
What’s in AfCFTA?
The AfCFTA aims to establish a single market for goods, services, facilitated by movement of persons to deepen the economic integration on the African continent.
The agreement states as an objective the “sustainable and inclusive socio-economic development, gender equality and structural transformation of the state parties”.
Other objectives include developing a customs union spanning the continent’s countries, slashing tariffs and removing non-tariff barriers; and improving intra-country cooperation in investment, Intellectual Property Right, customs and trade facilitation, competition policy and other trade-related areas.
However, the regime does not yet include tariff schedules for goods, nor does it have complete schedules for services, as both are still under negotiation.
Experts argue that when the African continental free trade area finally commences, it will give Nigerian producers opportunity and access to a bigger market of over 1.3 billion people, create $3.4 trillion economic bloc and increase goods exchange inside the continent.
According to AFP, intra-African trade is only about 16 per cent of their goods and services, compared to 65 per cent among European countries.
Besides, the African Union (AU) believes that if African countries follow the African continental free trade area plan, it will lead to 60 per cent boost of trade among African countries by 2022. AU is convinced that AfCFTA will create the world’s largest free trade area when it comes on stream.
Time is now
A recent British Broadcasting Corporation (BBC) analysis of Nigeria’s opportunities in the free trade area may have further caused worries for stakeholders in the sector, hence, the call for proper preparedness to benefit from the regime. The BBC had submitted that it seems the key product Nigeria has to give in the arrangement is her abundant crude and gas. This is even as they said that though Nigeria is oil rich, it however imports refined petroleum products as none of the country’s refineries can refine crude oil.
“With this free trade arrangement other African countries will sell their refined crude even to interested Nigerians,” the analysts said.
Also, the situation where the country, which is still struggling to maintain a meagre 4,000megawatts of electricity (Mw) for its about 200 million people, does not show readiness for businesses to boom under the AfCTA regime.
Aniemu aligns with the BBC analysis, that these challenges must be part of the areas the Federal Government needs to address otherwise other African countries which have steady power supply will take better advantage of the continental free trade pact.
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