President Muhammadu Buhari’s refusal to attend and sign the African Continental Free Trade Area (AfCFTA) agreement, which 44 other African States endorsed at the 10th Extra-Ordinary Session of African Union Assembly, has attracted undue criticisms. But this is not the first time President Buhari has declined to append his signature on a borderless trade deal. He had earlier withheld his signature from the Economic Partnership Agreement (EPA) among the Economic Community of West African States (ECOWAS). It would appear that the president’s attitude to EPA had escaped the notice of his critics or AfCFTA came up close to an election year. Otherwise, the president’s actions have been consistent and largely predictable.
But what are the grievances of the president’s critics on the AfCFTA agreement? Till date, there has not been any cogent and strong reason to fault President Buhari’s refusal to sign AfCFTA agreement. What resembles a reason why Buhari is under fire for declining to sign AfCFTA was given by former President Olusegun Obasanjo at the Africa CEO Forum in Abidjan, Cote d Ivoire. He said that Nigeria being the founder of the Organisation of African Unity, after it took over the mantle from Egypt, her president has no reason not to sign the agreement. He had hoped that the president will sign the agreement before it would be too late. When it will be too late, he unfortunately did not state. As anyone would expect, his appeal and hope seem to have fallen on deaf ears.
The unnecessary rancour generated by Nigeria’s refusal to sign AfCFTA agreement conveys the wrong impression to the public, that borderless trade deals are new. This is wrong. It is for this reason that this intervention became necessary.
In considering borderless trade deals, I have deliberately excluded the European Union trade deal, because before Europe contemplated any free trade deal, almost all countries on the Euro-zone were at comparable levels of development in manufacturing, technology, external trade, urban planning, building and architecture, and other human endeavour. It will therefore, be in order to consider the Asian experience in putting together free trade treaties/agreements. Two such agreements stand out, namely: ASEAN Free Trade Area (AFTA) and South Asian Free Trade Area (SAFTA).
AFTA is the trade agreement of Association of Southeast Asian Nations, signed in Singapore on January 28, 1992, by six member states of Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam, Laos, Myanmar and Cambodia joined in 1995, 1997, and 1999, respectively. Similarly, SAFTA agreement was signed in Islamabad, Pakistan, on January 6, 2004. The agreement created a trade bloc, currently of 1.8 billion people in Afghanistan, Bangladesh, Bhutan, India, Nepal, Maldives, Pakistan and Sir Lanka. The agreement came into force on January 1, 2006, after seven member states ratified it. India, Pakistan and Sri Lanka, considered the developing countries, were expected by the agreement to bring their duties down to 20 per cent in the first phase of the two-year period ending in 2007. But India and Pakistan did not ratify that agreement until 2009.
The pattern of ratification of AFTA and SAFTA treaties clearly demonstrates that, it is now conventional wisdom for countries to put their houses in order, before signing or ratifying borderless trade deals. President Buhari’s withdrawal from signing AfCFTA, is coming on the heels of the revelation that Nigeria performed poorly in her participation and the benefit she derived from the extended trade deal offered by the USA under the African Growth and Opportunity Act (AGOA). Available records at the US Department for Economic and Regional Affairs shows, in unmistakable terms, that Nigeria accounted for a paltry USD 9 million out of USD 2.7 billion agricultural exports by the continent to the USA in 2017. If Nigeria ratifies AfCFTA as some people want, she will be competing with other African countries which performed spectacularly well under AGOA in 2017. We do not need any Pastor, Imam or Voodoo Priest to predict that the result will be disastrous.
Buhari made it clear while receiving letter of credence from KetilIversenKarlsen, head of EU delegation to Nigeria, that he did not sign the Economic Partnership Agreement (EPA) among ECOWAS countries because our industries cannot compete with the more efficient and highly technologically driven industries in Europe. This is the truth and should be commended by all Nigerians. It is important to remind the president’s critics that there are so many other areas to play politics with. But to extend politics to Nigeria’s long term economic future and development should be resisted.
To be sure, President Buhari has not espoused any coherent policy on Nigeria’s economic growth and development. Different models abound in the world development market-place we can choose from. We can choose the war-induced development model: Japan and the defunct West Germany, after World War II; South Korea after the Korean War or the Chinese and Indian model which entails locking your borders and throwing the keys into the ocean for a number of years. The Chinese did so for 35 years and the Indians for 30 years. In 1985, India was described by the authoritative India Today as a “caged tiger; implying that the country had developed all factors needed for massive production of goods and services. Delivering a paper on “India’s Developmental Patterns: What lessons for Nigeria” at the Nigerian Institute of International Affairs (NIIA), Lagos, I made the point that India’s giant strides in the economic sphere is directly related to the inward-looking policy adopted immediately after that country’s independence in 1947.
Given our present level of development and national circumstances, the Chinese and Indian model recommends itself for a variety of reasons. First, Nigeria is a market, with 198 million people, the largest in Africa. So there is nothing anyone will produce in Nigeria without selling. The market is so huge that local industries cannot satisfy even 30 per cent of its requirement, a perfect situation for inward-looking policy, which will stop foreign businesses having a field day. Herein lies the problem, because initially there will be shortages and given the appetite of the ordinary Nigerians for foreign goods, including clothes used by mad-men in Europe, there will be protests on the streets, claiming that government deprived us the good life. Chinese and Indians endured shortages for their children to come to Idumota and establish factories where Nigerians work as slaves. No pain no gain, as your gym-master will tell you. Second, we need to intensify infrastructural development in earnest, especially electricity and rail transport system. These infrastructure sub-sectors are intrinsically linked and have propelled unimaginable development in the two countries under reference.
Third, before a lock down, Nigeria should return to the five-year medium term planning approach. This planning approach offers a lot of clarity in prioritizing projects and funding as well as implementation timelines, etc. Government should recall all those who put together our third and fourth national development plans to guide the preparation of a five – year nations development plan for Nigeria – say 2019 – 2024.
Funding a five – year national development plan can be a lot easier, given that it will be derived annually from the national budget. The present situation Nigeria has a plan which says she needs trillions and trillions of dollars for infrastructure development is either an academic exercise or wishful thinking. Except, of course, we plan to borrow such humongous amount and invest it wisely in infrastructure development, an idea which, current managerial capacity and present financial management abilities simply does not recommend.
Fourth, intensify the anti-corruption effort through the introduction of new strategies and successful models, tested elsewhere. In this regard, there is need to consider a period of pardon for those who will on their own repatriate ill-gotten money kept abroad. The current approach is time-consuming as several corruption cases will linger in court until the tenure of any democratically elected government expires.
Nigeria should never go back to the kind of national debate occasioned by the country’s acceptance of the International Monetary Fund’s conditionalties between 1985 – 1986. Now such a journey will simply be disastrous.
- Igwe, Ph.D is Director, Economic Research and Policy Management, Federal Ministry of Finance, Abuja.