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Tag: AfCFTA

  • Beyond the glitz and glamour of AfCFTA

    At the launch of the operational phase of the 54-member nation, African Continental Free Trade Area (AfCFTA) agreement in the Nigerien capital, Niamey early this month, the chairperson of the African Union Commission, Mousa Faki Mahamat described it as a “historic moment” and added that “the speedy entry into force of AfCFTA has been a major pride to all of us”.

    Underscoring the expansive trajectory of the trade agreement, Mahamat said that it is “more than just free trade area but by excellence the instrument of industrialization and integration with an objective of the aspiration of the agenda 2063.”

    Earlier at the event, Presidents Muhammadu Buhari (Nigeria) and Tallon (Benin Republic) signed the document  to accede to the free trade agreement, bring to 54, the number of African countries that have signed up, leaving out only Eritrea. However, the 12th Extraordinary summit of the African Union (AU) Heads of State and government in Niamey, the capital of Niger is not the only “historic moment” in Africa’s search for integration, common market and free trade area.

    The most historically momentous was actually the ambitious Lagos Plan of Action and the Final Act of Lagos of April 1980, a significant and audacious continental effort to chart a formidable road-map for building huge regional economies of scale with full compliments of strategic and key economic convergences to drive functional integration and regional market through massive outlays of infrastructural and industrial networks. Shortly after the historic Lagos Plan of Action and its counterpart, Final Act of Lagos, the Bretton Wood Institutions along with the US Treasury Department issued a rival document of stabilization and structural adjustment programme which eventually had its way, while the African regional initiative struggled for a space in the shelves.

    Again on June 3, 1991, 51 African states acceded to the African Economic Community, (AEC) another watershed in Africa’s regional effort to articulate a road-map to economic recovery and sustainable development after the failure of the neo-liberal Washington Consensus that drove the structural adjustment programme of 1980s. The African Economic Community did not, however, seek to overthrow liberalism or market reforms, but sought to harness its advantages through the benefits of economies of scale. Building from the formidable insight of the April, 1980 Lagos Plan of Action and the Final Act of Lagos, the African Economic Treaty sought among other objectives to the promotion and strengthening of joint investment in production and trade of major products and input within the framework of collective self-reliance.”

    “The liberalization of trade through abolition, among member states of custom duties levied on imports and exports and the abolition, among member states of non-tariff barriers in order to establish a free trade area at the level of each regional economic community.”

    “The harmonization of national policies in order to promote community activities, particularly in the field of Agriculture, Industry, transport and communication, energy, natural resources, education, culture, science and technology”;

    “The adoption of a common trade policy vis-à-vis that states”;

    “The establishment of and maintenance of a common external tariff”;

    “The establishment of a common market”.

    The above objectives among others were elaborately stated in the treaty of the African Economic Community and were not different from the objectives of the continental free trade area that has just been launched, even as the historic Lagos Plan of Action was more comprehensive and far more compellingly strategic to the vision of regional integration with the full compliments of common market and free trade area. More curiously, the Peoples Republic of China, whose GDP then, in the late 1970s and early 1980s were lower than some African countries, launched her key economic modernization programme of reform and opening-up around the same time of the Lagos Plan Action. While Beijing stayed the course of her home-grown reform effort, with less economic endowment but a strong political will and discipline to persevere, Africa’s continental initiative as home grown reform suffered a deadly ambush by extra-regional powers. Forty years down the line, China’s GDP has multiplied over 84 times more than any African of country’s economy, pulled 840 million Chinese out of poverty and became the second largest economy in the world.

    From almost zero trade profile in the 1970s, China is the world most vigorous trader now and has been Africa’s largest trading partner for the past 10 years in a straight row.

    The African Continental Free Trade Area (AfCFTA) whose journey in the public domain, began in the Rwandan capital, Kigali last year with high profile accession of its instrument by several states in the continent received its “historic moments”, with the launch of its operational phase in Niamey recently must critically examine itself in the mirror and find out, why its many illustrious predecessors buckled. There are certainly new conditions both in the world and Africa that could help the resurrected efforts at regional integration, common market and free trade area to reach a modest success. Regional or continental facility connectivity through infrastructure renewal, currently at the heart of China-Africa cooperation and embedded in Beijing initiated framework of the Belt and Road International Cooperation can contribute meaningfully to necessary indices conducive for a functional and successful free trade area.

    But the momentum that would make AfCFTA succeed must be generated from within and top most among them, is policy alignment or coordination of participating countries to enhance institutional connectivity. This means significant trade-off of institutional and policy sovereignty. Africa has done these generously with prodding of enticements and blackmail for many years by extra-continental Western powers and institutions and should therefore, not shy away from contributing some bits of their sovereign prerogatives to the internal initiatives and momentum to build a free trade area, common market and drive the integration of the region.

    The Africa’s newest kid on the block, free trade area can walk and even run, but strategic fundamentals must be put in place for operational market and economic indices to function optimally on their own accord. Africa has a unique international advantage of a growing and expansive multi-lateralism with an international system less beholden to a dominant “hyper-power” or any rampaging ideological pole, leaving her open to seek broad partnership across the world than the previous cold war narrow maneuver  of finding allies to fend off, prospective foes.

    Let there be no illusion that the free trade area, even as it enters the operational phase would bring quick results and relieve Africa immediately of the immense burden of poverty of the majority of her population.

    The immediate need or imperative of the current continental initiative is to stay the course with uncommon focus and consistency, wading through the river by feeling stones, as Chinese great reformer, Deng Xiaoping called out his people at their long march to economic stardom, 40 years ago.

    • Onunaiju is director, Centre for China Studies, Utako, Abuja.

  • How to benefit from AfCFTA, by NACCIMA President

    The National President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Hajiya Saratu Iya Aliyu, is excited by the President’s signing of the AfCFTA.

    Hajiya Aliyu said the signing of the treaty by the President was a courageous decision and a fullfilment of the will of Nigerians after a rigorous consultative process involving all stakeholders across the country.

    In a statement by the organisation’s Director-General, Amb. Ayo Olukanni, Hajiya Aliyu said now the hard work must begin if Nigeria, especially the private sector is to reap the benefits of the Agreement.

    Read also: Will AfCFTA maximise Nigeria’s economic potential?

    She said close attention must be paid to the operational phase which has commenced, especially the rules of origin, the Pan African digital payment platform, Web-based and mobile applications for business, and an African Trade Observatory Portal.

    She advised that that the Organised private sector must work closely together to enable the private businesses and manufacturers harness the potentials of the Agreement.

    She said NACCIMA was already putting finishing touches to arrangements for seminars, workshops and Advocacy programmes to enable Chambers to key into and take advantage of the opportunities under the Agreement which is expected to create a huge continental trading place on the African continent

     

  • Next steps for AfCFTA, by ECA

    The United Nations Economic Commission for Africa (ECA) yesterday released a report titled: ‘Next Steps for the African Continental Free Trade Area (AfCFTA )’. It is an assessment of the regional integration efforts in Africa. Excerpts:

    The historic signing of the AfCFTA Agreement on 21 March 2018 marked a momentous milestone for regional integration in Africa. The signing strongly indicated commitment by policy makers and African leaders to regional integration.

    Regional integration faces challenges. They include limited energy and infrastructure development, insecurity and conflicts, multiple and overlapping membership of RECs, poor sequencing of the regional integration arrangements and limited financial resources.

    Africa’s large infrastructure deficit hinders intra-regional trade. Infrastructure financing can be supported by maximising the use of public–private partnerships, tapping into national resources and using regional and global infrastructure development funds and innovative financing tools.

    Regional energy integration through power pools can attract considerable investment in energy. Africa’s governance, peace and security challenges are inextricably linked and are prerequisites to establishing a continental-wide economic space.

     

    Policy recommendations

     

    • More economic and physical integration, including through important infrastructure projects, is needed. It will require significant resources, including leveraging public–private partnerships and innovative financing tools.
    • Cross-border collaboration in energy trade should be strengthened. Mechanisms include regional energy policy frameworks, gas and power pools and integrated regional energy markets.
    • African States at the level of both RECs and the African Union should strengthen and resource their existing instruments promoting good governance, peace and security. These will create the right environment for the pursuit of regional integration
    • Monitoring the implementation of regional integration is critical. The development of the African Regional Integration Index by ECA in collaboration with the African Union Commission and the African Development Bank is a powerful tool for monitoring integration.
    • Monetary integration continues to be actively pursued by five of the eight regional economic communities. These RECs have adopted macroeconomic convergence criteria, but their member countries have had mixed success in meeting these criteria.
    • Integration in services is important, given its contribution to African GDP growth. In 2017, over 53 per cent of the continent’s GDP came from services.
    • Gradual progress is being made towards the free movement of people. Steps have included the launching of the Common Electronic Biometric African Passport in July 2016 and the adoption of the AU Protocol on Free Movement of Persons, Right of Residence and Right of Establishment in January 2018—the latter, however, has struggled to gain country ratifications.
    • A mismatch between available skills and the needs of Africa’s labour markets slows the continent’s economic integration and overall development. Deepening of regional cooperation in education, including through the
    • African countries must address the crisis of implementation and translate promises at the continental and regional levels into action. These include ratifying and implementing the AfCFTA, the Single African Air Transport Market, peace and security instruments, monetary integration commitments and the AU protocol on the movement of persons.
    • Remarkable progress has been made in realizing the AfCFTA. Fifty-two of 55 AU member States have now signed the agreement. As of April 2019, 22 have ratified and deposited ratification instruments with the AUC. Negotiators have concluded all four of the phase I protocols to the agreement and 10 of the 12 annexes (Trade in Goods annex 1 on Schedules of Commitments and annex 2 on Rules of Origin are to be concluded by July 2019), marking commendable progress since the launch of negotiations in June 2015.
    • Implementing the AfCFTA is about more than trade. It is about dispelling the “crisis of implementation” of AU decisions and initiatives and validating the African Union and its Agenda 2063. It is a litmus test of the commitment of African countries to economic integration.
    • The AfCFTA aspires towards deepening the integration of the African continent beyond merely a free trade area. It includes as objectives to “create a liberalized market […] through successive rounds of negotiations,” “lay the ground for the establishment of a Continental Customs Union” and “contribute to the movement of capital and natural persons.”
    • African countries must take care that the AfCFTA not simply add an additional strand in the African spaghetti bowl of preferential trade regimes. Instead, it must provide coherence to the internal and external trade policy landscape in Africa.
    • The remaining African countries should ratify the AfCFTA without delay and ensure that the continent moves together by greatly exceeding the minimum number of 22 ratifications required for entry into force.
    • Critical technical components that need to be finalized before the AfCFTA can be operationalized must be urgently concluded. They include schedules of concessions for trade in goods, rules of origin and schedules of specific commitments for trade in services. These must be followed by the phase II negotiations on investment, competition policy and intellectual property rights.
    • Ratification of the AfCFTA must be followed through by effective implementation. This requires creating the AfCFTA institutions, establishing the mechanisms envisaged in its operative provisions and incorporating AfCFTA obligations into the laws and regulations of each State party. And countries must strategically take advantage of the AfCFTA to achieve economic development and poverty alleviation.
    • The effectiveness of the AfCFTA committees will require many prompt decisions. Certain perfunctory decisions could be delegated to the Secretariat, other decision-making authority delegated to REC representatives in the absence of State representation or permanent representatives accredited to the Committee of Senior Trade Officials, as is done in the WTO in Geneva.
    • Implementing of the AfCFTA will be more effective if national ministries responsible for trade create AfCFTA committees. The committees can comprise persons focal for satisfying the commitments and interest of the AfCFTA and can harmonize their country’s approach to implementation. These should ideally be framed within the structure of an AfCFTA national strategy.
    • Using the AfCFTA to realise the deeper forms of integration in Africa that have been called for by African Heads of State and Government. This requires progressively deepening the liberalisation achieved under the AfCFTA until it is sufficient to subsume the existing REC FTAs into a single, fully liberalised, African trade area.
    • Unilateral trading schemes of Africa’s partners can reinforce African regional value chains if they are designed appropriately. African countries should accordingly deploy their diplomatic capabilities towards influencing trading partners to promote regionalism as they design their unilateral trading schemes, including generalised systems of preferences.

     

    Taking Full Advantage of the AfCFTA

     

    To take full advantage of the AfCFTA, countries must buttress its implementation with complementary measures in investment, production, trade facilitation, trade-related infrastructure and import defence.

    • Investment in the AfCFTA can be supported through: (1) national investment plans that channel investment flows into sectors that benefit from AfCFTA market liberalisation; (2) investment promotion agencies to attract and facilitate investment, including through “matchmaking” between international and domestic firms, one-stop shop centres for investors, and measures detailed in the UNCTAD Global

    Action Menu for Investment Facilitation and (3) partnerships with other African countries to learn from their experiences and with UNCTAD and ECA for support with UNCTAD investment policy reviews and UNCTAD/ECA online investor guides.

    • A productive capacity development agenda can support a country in producing the goods demanded by the AfCFTA market through: (1) an industrial policy to create a supportive and facilitative overarching enabling environment, (2) sector-specific strategies that take a regional approach to value chains development and (3) the AUC Service Sector Development Programme, which seeks to provide a blueprint for the development of competitive services sectors in Africa.
    • Trade facilitation measures can support AfCFTA trade opportunities through: (1) an effectively designed AfCFTA non-tariff barrier mechanism, (2) investment in standards infrastructure and strategically harmonising standards in sectors with high AfCFTA potential and (3) introduction of a continental simplified trade regime, to help small and informal traders gain from the AfCFTA.
    • Trade-related infrastructure for pursuing the opportunities of the AfCFTA can be supported through: (1) effective implementation of the Programme for Infrastructure Development in Africa and (2) strategic logistics management to align trade facilitation with infrastructure development.
    • Import defence measures can help to manage import competition from the AfCFTA through: (1) pooled resources to establish regional trade remedy institutions at the REC level, (2) competition institutions established or reinforced at the regional or continental levels, (3) ministries of trade focal persons assigned by the ministry of trade to proactively assess likely import implications of the AfCFTA and monitor customs data for changing import patterns and (4) platforms sponsored by the ministry of trade for private sector stakeholders to flag import stress.
    • National AfCFTA strategies can provide a coherent and strategic approach towards measures to complement the AfCFTA. They and should incorporate gender mainstreaming to ensure that the gains from the AfCFTA support gender equality.

     

    Intellectual Property

     

    • As private rights used in the industrial and commercial context, IP rights function as policy tools to promote entrepreneurship, investment, competition and innovation. At the same time, IP regimes are essential in maintaining certain public policy objectives that relate to the dissemination of knowledge and indigenous learning. The AfCFTA provides an opportunity to advance a continental approach to a balanced IP rights system that responds to the aspirations contained in Agenda 2063.
    • Membership of the WTO by 44 African Union member States has a significant influence on how the IP rights protocol in the African Continental Free Trade Area can be designed: the WTO TRIPS Agreement does not provide exceptions for regional preferential agreements, which means that, unlike other the protocols in the AfCFTA, the benefits of an IP rights protocol must be extended to all WTO member States. African countries also differ significantly in their use of TRIPS flexibilities.
    • African countries have different levels of obligations in IP treaties beyond WTO: including participation in multilateral IP treaties and commitments arising from bilateral trade agreements.
    • African countries have undergone extensive reforms in IP laws and regulations: nevertheless, the use of IP rights, as demonstrated by patents and trademarks, is very limited in Africa compared to other regions and most patents and trademarks registered in Africa belong to non-residents. Considerable innovation is taking place in Africa, but without receiving protection from IP rights.
    • Three options may be identified in regional economic integration in IP rights:

    (a) arrangements for regional cooperation and sharing of experiences on IP rights in general;

    (b) regional filing systems, usually for patents, but also for trademarks and industrial designs; and (c) development of one substantial law or unification of laws for members of a regional organisation. Different parts of Africa have experience with all three of these models.

    • Developing one substantive IP regime for 55 African Union member States would be challenging: (a) it may well prove over-ambitious to negotiate; (b) it may undermine existing flexibilities that African countries enjoy in their multilateral and bilateral IP commitments; and (c) it may conflict with obligations that African countries have committed to in international and bilateral agreements.
    • An African Continental Free Trade Area protocol involving only a cooperative framework for IP rights would fail to take advantage of many opportunities, including developing tools for promoting regional integration, ensuring non-discrimination between countries with different international treaty membership and advancing the objectives of industrial diversification and value chain integration.
    • A viable IP rights protocol in the African Continental Free Trade Area could do the following:
    1. Provide guiding principles for national IP law and policy, as well as for engagement of African countries in international IP treaties.

    b Provide for non-discrimination among nationals of States parties on matters of IP rights.

    1. Develop norms to safeguard African interests, including non-discrimination among African countries on matters pertaining to IP rights.
    2. Establish a regional IP exhaustion system to prevent fragmentation of the AfCFTA market and encourage regional value chain development.
    3. Provide the minimum requirements for the protection of traditional knowledge, genetic resources, and cultural expressions, but with sufficient flexibility for domestic law and multilateral negotiations on these issues.
    4. Require the ratification of the Marrakesh Treaty, with the additional commitment to adhere to any other multilateral agreement that promotes access to work for persons with disabilities.
    5. Require the ratification of the protocol amending the TRIPS Agreement, 2005, in order to benefit from the facilitated production and exportation of pharmaceuticals for a regional trade agreement in which 50 per cent of the members are least developed countries.
    6. Oblige the protection of geographic indications through either a sui generis system or certification and collection marks.
    7. Develop minimum standards on plant variety protection, including on availability, scope of protection, and exceptions to plant breeders’ rights and the protection of traditional and new farmers’ varieties.
    8. Develop guidelines on procedures for the enforcement of IP rights.

  • UN backs AfCFTA as countries get set for implementation

    THE United Nations (UN) has pledged its full support to the African Union (AU) as member nations begin the implementation of the African Continental Free Trade Area (AfCFTA).

    As designed by the AU, the AfCFTA agreement is expected to unleash the continent’s all-inclusive economic potential.

    UN’s Deputy Secretary-General, Ms. Amina J Mohammed, gave the pledge in a statement by the Communications Section of Economic Commission for Africa (ECA) Office at Addis Ababa, Ethiopia.

    She gave the pledge on behalf of the world body at the weekend in a remark on the 12th  Extraordinary Session of the AU on the AfCFTA.

    Ms. Mohammed assured the AU of UN’s readiness to work in partnership with African countries as they move to implement the historic and game-changing agreement.

    She said: “We are already working with 16 African governments to develop national strategies to maximise the opportunities created by this agreement, and we will increase this number from next year.

    “We are committed to working with African institutions to mobilise the resources that will be required for full implementation of the AfCFTA. In the first instance, the African Regional Integration Trust Fund will support countries to mobilize resources to finance regional integration.”

    Ms. Mohammed said the UN will work with the African Union to coordinate and leverage complementary funding sources from the African Development Bank’s Africa50 Fund, to the African Union’s Programme for Infrastructure Development in Africa (PIDA), and China’s Belt and Road Initiative.

    Read also: Next steps for AfCFTA, by ECA

    The United Nations ECA, she said, is supporting the process of mainstreaming gender and youth employment initiatives into national strategies.

    “This will help to ensure that trade policy is both gender-sensitive and responds to demographic realities, thereby contributing more fully to sustainable development,” the UN deputy chief said.

    “Trade can contribute to either widening or closing inclusion and gender gaps, depending on how the process is managed. So we are also working with governments to counterbalance the distributional and gender-differentiated effects of trade liberalisation.”

    Ms. Mohammed said it was essential to act now, not only to ensure that women benefit from the AfCFTA but also the African youth given the demographic challenges facing the continent.

    She told the African leaders gathered for the landmark occasion to officially launch the AfCFTA that entry into force of the accord was a momentous step.

    “But as you have recognised, it is a first step. Realising its full potential will require changes and improvements in several important areas, including infrastructure development, capacity to export, and non-tariff barriers,” Ms. Mohammed added.

    The AU’s Phase II of the AfCFTA negotiations will tackle competition, investment, and intellectual property rights, which the UNDSG said were some of the regulatory obstacles that create dysfunction in integrated markets.

    “I urge you to move decisively and quickly during the transitional period up to 1 July 2020 to reap the rewards of this historic agreement,” she said, adding, “Africans should take particular pride in reaching this agreement at a time of growing protectionism and rising trade tensions that threaten economic stability and progress around the world.

    From free trade to climate change and migration, African countries and regional organisations are developing progressive policies that demonstrate global responsibility and forge a new path for multilateralism and sustainability, Ms. Mohammed said.

    “The entire UN System will continue to support African countries as you accelerate the continent’s development. Together, we will realise our shared vision of Agenda 2063 and the Sustainable Development Goals (SDGs), leaving no one behind,” she added.

    With the world’s largest free trade area, encompassing 54 countries and 1.2 billion people, the AfCFTA would bring the promise of trade-led economic growth closer to reality for Africa’s entrepreneurs, industrialists, investors, innovators and service suppliers, said Ms. Mohammed.

    She said: “It will create jobs and contribute to technology-transfer and the development of new skills; it will improve productive capacity and diversification; and it will increase African and foreign investment.

    “Perhaps most important of all, the African Continental Free Trade Area demonstrates the common will of African countries to work together to achieve the vision of the Africa Union’s Agenda 2063: The Africa We Want.”

    It is a tool to unleash African innovation, drive growth, transform African economies and contribute to a prosperous, stable and peaceful African continent, as foreseen in both Agenda 2063 and the 2030 Agenda for Sustainable Development, Ms. Mohammed added.

    Nigeria and Benin signed the historic agreement during the opening session of the summit on Sunday morning.

  • AfCFTA: Pressure mounts on Nigeria to sign deal

    Of 55 African countries, 49 have signed the African Continental Free Trade Area (AfCFTA) agreement; 20 others have ratified the deal, which seeks to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3.3 trillion. But, Nigeria has yet to muster the political will to sign the treaty. However, experts and stakeholders have mounted pressure on President Muhammadu Buhari to sign. They note that the agreement holds the key to maximising Nigeria’s economic potential, Assistant Editor CHIKODI OKEREOCHA reports.

    He spoke with the verve and bluntness of an expert schooled in the dynamics of the African economy, particularly Nigeria’s. And by the time the President of African Export-Import Bank (Afreximbank), Professor Benedict Oramah was done reeling out some of the obvious benefits of the African Continental Free Trade Area (AfCFTA) agreement, it was clear that Nigeria may have been shooting herself in the foot by her continued delay in signing and implementing the agreement.

    The AfCFTA was adopted by the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) in Addis Ababa, Ethiopia in January 2012, and was expected to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3 trillion. The agreement is seen as an important milestone in promoting Africa’s regional integration and helping to increase intra-African trade.

    AfCFTA commits countries to liberalising services and trade and removing tariffs on 90 per cent of goods. Apart from its inherent capacity to promote economic growth and development, reduce poverty in the partnering countries, it was also expected to help expand and diversify trade and increase domestic and foreign investment. The AfCFTA was signed in Kigali, Rwanda on March 21, 2018 by 44 of 55 African countries.

    But President Muhammadu Buhari cancelled his earlier scheduled visit to Rwanda to sign the AfCFTA, citing the need to allow for more consultations with stakeholders in Nigeria over the trade agreement, and the need for his administration to be circumspect in entering into any agreement that would make the country a dumping ground and jeopardise its security.

    In boycotting the trade liberalisation deal, the president buckled under intense pressure by members of the Organised Private Sector (OPS), which included Manufacturers Association of Nigeria (MAN), Nigeria Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMMA), and the labour movement who vehemently kicked against the proposed agreement.

    For instance, MAN hinged its opposition on issues of market access and the enforcement of Rules of Origin (RoO), among other concerns. It said, for instance, the RoO in the AfCFTA cannot be adequately enforced to guard against the influx of goods into the Nigerian market.

    The RoO are used to determine the country of origin of a product for the purpose of international trade. But, MAN expressed fears that the RoO cannot be adequately enforced because goods from the European Union (EU) can find their way into one of the African countries that have bilateral agreement with the EU.

    MAN also said the agreement’s market access was a concern to manufacturers as it leaves low protection to locally produced goods. “The agreement says that 90 per cent of the tariff plan would be liberalised, leaving only 10 per cent to protect manufacturers. That 10 per cent is too low,” MAN said.

    On its part, the NLC expressed fears that the deal will lead to the collapse of the manufacturing sector and loss of jobs. It also raised the alarm that if signed, the CFTA will turn Nigeria into a dumping ground for repackaged and re-bagged foreign goods from Europe and other developed countries.

    The alleged lack of inputs of critical stakeholders in the proposed agreement also did not go down well with the NLC. Its President, Comrade Ayuba Wabba, argued that ordinarily, proponents of the trade document ought to have consulted all relevant stakeholders because of its likely implications on the economy.

    Consequently, the president set up a committee to review the CFTA framework agreement. And the committee said it has since moved to strengthen its consultations with critical stakeholders and determine how various sectors of the economy will benefit from the proposed agreement.

    Despite setting up the committee, the Federal Government has continued to foot-drag on the signing of AfCFTA more than one year after its inauguration in Rwanda. Obviously, this has not gone down well with Oramah and indeed, other experts and critical stakeholders in the economy. They have, therefore, intensified pressure on Nigeria to sign the treaty.

    Oramah, for instance, rode on the platform of this year’s Bullion Lecture organised by the Centre for Financial Journalism (CFJ Nigeria) to speak of his disappointment that Nigeria, which hosted the forum that gave birth to the AfCFTA initiative was yet to decide on what to do with it.

    At the lecture, which held in Lagos, Oramah, who spoke on the topic: Leveraging the African Continental Free Trade Agreement to boost Nigeria’s economic development, said given Nigeria’s vantage position as Africa’s largest and most populous economy, AfCFTA actually handed her a window of opportunity to maximise her economic potential almost on a platter.

    He regretted Nigeria’s inability to sign the agreement more than a year after 49 out of 55 African countries signed it, even as 20 other African countries have ratified it. He urged the Federal Government to take urgent steps to sign and implement AfCAFTA in order to take advantage of its numerous benefits.

    According to the Afreximbank chief, one of the benefits of the deal waiting for Nigeria to grab, if it summons the political will to sign it, was the possibility of taking over from China as the world’s manufacturing hub.

    He said while China exports $45 billion of light manufactures into Africa, Nigeria and other African countries can expect to fill that void if they take advantage of the tariff and non-tariff reductions in the AfCFTA.

    Tracing the historical and economic imperatives that necessitated the birth of the AfCFTA, Oramah noted that Africa benefited a little from many years it was ruled by colonial powers whose main focus was to draw the raw materials it needed for its home industries while it dumped its own manufactured goods in return.

    He said the AfCFTA was meant to change the narrative, as a continent that was called the “Basket Case”, is on the path to becoming the “Bread Basket” of the world. He said AfCFTA will create the environment for the continent to chart a new development path.

    It will also eliminate the causes of weakness while upholding the areas of strength among the 55 countries of the continent. This, according to him, will be by creating the required economic integration that would promote sub-regional and continental supply chains such as the automotive industry.

    Experts say that the deal presents an attractive domestic market base for foreign investors interested in manufacturing for exports to the rest of Africa. “Today, Foreign Direct Investment (FDI) inflows to Nigeria amount to about $3 billion, 90 per cent of which goes to the oil sector. This can change positively with the AfCFTA”, Oramah stated.

    He further stated that a survey conducted by Afreximbank showed that 69 per cent of Nigerian businesses believed that AfCFTA would be advantageous to the country in three main areas, namely creating a better business environment, promotion of local businesses and business growth and expansion.

    The Director General/Chief Negotiator, Nigerian Office for Trade Negotiations (NOTN), Ambassador Chiedu Osakwe, could not agree less. He projects that with the trade liberalisation deal, an economy like Nigeria would be larger than that of Australia in 32 years.

    The acclaimed international trade policy expert added that intra-African trade, which was  at 16 to 17 per cent, would be increased to 52 per cent with a corresponding GDP growth and increase in employment and job creation on the continent.

     

    OPS, others push for Nigeria to sign

    Some members of the Organised Private Sector (OPS) particularly Lagos Chamber of Commerce and Industry (LCCI) have also thrown their weight behind the push to get the Buhari-led government to do the needful and sign the free trade treaty. For instance, LCCI President Mr. Babatunde Ruwase described the AfCFTA as an economic game-changer.

    Speaking at the 2019 Founders Day Lecture of the Nigerian Institute of Advanced Legal Studies (NIALS) with the theme, “Inclusivity and the Transformational Potentials of the AfCFTA for African Countries,” Ruwase said Nigeria stands to benefit from the continental economic integration. “The reality is that there is a great deal of value in economic integration, but as a country, we need to position ourselves well to take advantage of the opportunities it offers.

    “The AfCFTA is an age-long dream of the continent with regards to the promotion of trade and investment among African countries. As a country, our decision on the AfCFTA could be a game-changer for the Nigerian economy if we do the right thing at the right time,” the LCCI president said.

    The guest lecturer, Adjunct Professor at the Centre of Comparative Law in Africa, University of Cape Town, South Africa, Prof Faizel Ismail, also said AfCFTA has the prospect of catalysing the process of transformative industrial development, cross-border investment, democracy and governance in Africa.

    Similarly, the President and Chairman of Council, Chartered Institute of Bankers of Nigeria (CIBN), Uche Olowu, noted that Nigeria being the biggest economy in Africa ought not to lag behind in ratifying the trade agreement, but should be at the fore front.

    He lamented that Nigeria is one of the very few countries yet to sign the treaty, despite her large number of manufacturing companies and other small and medium enterprises.

    Olowu’s worry was that if Nigeria does not sign the continental agreement, it will not only be a dumping ground for substandard products, but a final destination for totally rejected goods and services from other African countries.

     

    The challenges

    Despite experts’ superior argument in favour of signing AfCFTA, signing and implementing the treaty will not be a walk in the park. The belief is that there are still a number of hurdles to cross if Nigeria and other African countries must reap the benefits the AfCFTA offers.

    Some of the major challenges ahead in terms of implementation and pushing the AfCFTA agenda forward to meet the goal of increasing intra-African trade to 25 per cent by 2023, from between 15 and 18 per cent currently, include weak productive capacity, high production costs, and large infrastructure deficits.

    Oramah said, for instance, that the challenge of creating conducive macroeconomic policies that support increased regional trade remain. He said strategic steps should be taken to introduce policies that encourage FDI flows to sectors that have the highest potential for foreign trade, namely light manufacturing and agriculture.

    He also said lack of appropriate financing should be addressed through specific monetary and trade policies that target the potentials of each country towards maximising the competitive advantage inherent in each economy.

    Oramah, however, said Afreximbank had supported African businesses to overcome their growth challenges, noting that Nigeria was among the key beneficiaries of these measures, one of which was the elimination of the poor product quality of many African businesses by instituting appropriate quality assurance centres.

    The other, according to him, was offering guarantees for facilities given by local banks to Small and Medium Enterprises (SMEs).

  • Afreximbank president urges Fed Govt to sign AfCFTA

    President of African Export-Import Bank (Afreximbank), Prof. Benedict Oramah, has urged the Federal Government to sign the African Continental Free Trade Agreement (AfCFTA).

    He gave the advice while speaking in Lagos last Tuesday as guest lecturer at the 2019 edition of the annual Bullion Lecture organised by the Centre for Financial Journalism (CFJ Nigeria).

    Professor Oramah, who spoke on the topic: Leveraging the African Continental Free Trade Agreement to Boost Nigeria’s Economic Development, urged the Federal government to take urgent steps to endorse AfCAFTA in order to key into what he called a window of opportunity for the country to maximise its economic potential.

    He expressed concern over the inability of the  government to endorse the agreement, which was produced from the decisions and milestones articulated at the Abuja Treaty of  1991 aimed at defining clear plans for Africa’s economic integration.

    According to him, the AfCFTA was signed in Kigali, Rwanda on March 21, 2018 by 44 of 55 African countries while Nigeria which hosted the forum that gave birth to the initiative was yet to decide on what to do with it.

    Oramah said it was worrying to well-meaning Nigerians and other countries of Africa that a treaty, which Nigeria gave birth to had to be delivered in Rwanda  while smaller countries that looked up to  her had  endorsed the agreement and went forward to ratify it.

    “The AfCFTA, which was signed in Kigali, Rwanda on March 21, 2018, was in line with the Abuja Treaty expectations. So … the child that was conceived in Nigeria was born in Rwanda. And with the emergence of that child, Africa sees a renewed hope, a reinvigoration to chart a new course,” Oramah told the audience in Lagos.

    Tracing the historical and economic imperatives that necessitated the birth of the AfCFTA, the Afreximbank boss noted that Africa benefited a little from  many years it was ruled by colonial powers whose main focus was to draw the raw materials it needed for its home industries while it dumped its own manufactured goods in return.

    He said the AfCFTA was meant to change the narrative as a continent that was called the “Basket Case”, is now on the path to becoming the “Bread Basket” of the world.

    Read also: ‘AfCFTA’ll worsen Nigeria’s woes’

    Enumerating the benefits of the AfCFTA to Africa and to Nigeria in particular, Prof. Oramah said the treaty would create the environment for the continent to chart a new development path and eliminate the causes of weakness while upholding the areas of strength among the 55 countries of the continent.

    He also said the initiative would create the required economic integration that would promote sub-regional and continental supply chains such as the automotive industry, as “the AfCFTA offers opportunity for African countries to begin to create and nurture infant industries”.

    Oramah added that : “The AfCFTA creates opportunities for African economies, including Nigeria, to take over from China as the World’s manufacturing hub. China exports $45 billion of light manufacturers into Africa. Nigeria and other African countries can expect to fill that void if they take advantage of the tariff and non-tariff reductions in the AfCFTA.”

  • ‘AfCFTA’ll worsen Nigeria’s woes’

    THE National Association of Nigerian Traders (NANTS) has warned the Federal Government against signing and implementing the African Continental Free Trade Agreement (AfCFTA), saying  the deal would worsen unemployment among farmers and farm workers across the country.

    Its President, Ken Ukaoha, who stated this at the weekend in Lagos, said this was based on the outcome of a research by the association, which examined the effects of the tariff cuts on the country’s agricultural output, investment and employment of manufacturing products/industries earlier classified by initial tariff levels as five per cent, 10 per cent and 20per cent under two scenarios.

    “The change in domestic outputs for all the three broad sub-sectors is negative and as high as between -14.5 per cent and -49.9 per cent in two sectors.

    “Significant changes in employment that cut across all the three broad sub-sectors were estimated in the two scenarios ranging from -1.51 per cent -5.9 per cent.

    “Thus, the implementation of the AfCFTA implies increase in unemployment of farmers, farm workers and other associated workers.

    “The simulation also shows reduction in investment in the agricultural sector across all the sub-sectors for all the scenarios, and is as high as -7.61 per cent for vegetable products.

    “This is worrisome given that the sector is constrained by lack of investment, thus suggesting that implementation of AfCFTA would virtually wipe off the current meagre investment in the sector,” he said.

    He said he was not bothered that signatories to AfCFTA had increased from 44 to 52, with only three African countries left. He said Nigeria’s refusal to sign the trade agreement was in the best interest of the country.

    “The research took note of the fact that the signatures to the AfCFTA have risen from 44 to 52, with only three African countries remaining.

    “For the ECOWAS (Economic Community of African States) region, 13 of our 15 member states have so far signed the AfCFTA and eight (out of 21 ratifications so far) of our member states have also ratified the agreement,” he said.

  • Afreximbank president urges Fed Govt to sign AfCFTA

    President of African Export Import Bank (Afreximbank), Prof. Benedict Oramah, has urged the Federal Government to sign the African Continental Free Trade Agreement (AfCFTA).

    He gave the advice while speaking in Lagos last Tuesday as guest lecturer at the 2019 edition of the annual Bullion Lecture organised by the Centre for Financial Journalism (CFJ Nigeria).

    Professor Oramah, who spoke on the topic: Leveraging the African Continental Free Trade Agreement to Boost Nigeria’s Economic Development, urged the Federal government to take urgent steps to endorse AfCAFTA in order to key into what he called a window of opportunity for the country to maximise its economic potential.

    He expressed concern over the inability of the  government to endorse the agreement, which was produced from the decisions and milestones articulated at the Abuja Treaty of  1991 aimed at defining clear plans for Africa’s economic integration.

    According to him, the AfCFTA was signed in Kigali, Rwanda on March 21, 2018 by 44 of 55 African countries while Nigeria which hosted the forum that gave birth to the initiative was yet to decide on what to do with it.

    Oramah said it was worrying to well-meaning Nigerians and other countries of Africa that a treaty, which Nigeria gave birth to had to be delivered in Rwanda while smaller countries that looked up to her had endorsed the agreement and went forward to ratify it.

    “The AfCFTA, which was signed in Kigali, Rwanda on March 21, 2018, was in line with the Abuja Treaty expectations. So … the child that was conceived in Nigeria was born in Rwanda. And with the emergence of that child, Africa sees a renewed hope, a reinvigoration to chart a new course,” Oramah told the audience in Lagos.

    Tracing the historical and economic imperatives that necessitated the birth of the AfCFTA, the Afreximbank boss noted that Africa benefited a little from many years it was ruled by colonial powers whose main focus was to draw the raw materials it needed for its home industries while it dumped its own manufactured goods in return.

    He said the AfCFTA was meant to change the narrative as a continent that was called the “Basket Case”, is now on the path to becoming the “Bread Basket” of the world.

    Read also: Afreximbank invests $1b in Nigeria’s EPZ

    Enumerating the benefits of the AfCFTA to Africa and to Nigeria in particular, Prof. Oramah said the treaty would create the environment for the continent to chart a new development path and eliminate the causes of weakness while upholding the areas of strength among the 55 countries of the continent.

    He also said the initiative would create the required economic integration that would promote sub-regional and continental supply chains such as the automotive industry, as “the AfCFTA offers opportunity for African countries to begin to create and nurture infant industries”.

    Oramah added that : “The AfCFTA creates opportunities for African economies, including Nigeria, to take over from China as the World’s manufacturing hub. China exports $45 billion of light manufacturers into Africa. Nigeria and other African countries can expect to fill that void if they take advantage of the tariff and non-tariff reductions in the AfCFTA.”

    The Afreximbank chief said Nigeria stands a great chance of enlarging its Foreign Direct Investment (FDI) inflows through the AfCFTA given its position as the largest economy and the most populous in Africa.

  • Afreximbank president urges Fed Govt to sign AfCFTA

    President of African Export-Import Bank (Afreximbank), Prof. Benedict Oramah, has urged the Federal Government to sign the African Continental Free Trade Agreement (AfCFTA).

    He gave the advice while speaking in Lagos last Tuesday as guest lecturer at the 2019 edition of the annual Bullion Lecture organised by the Centre for Financial Journalism (CFJ Nigeria).

    Professor Oramah, who spoke on the topic: Leveraging the African Continental Free Trade Agreement to Boost Nigeria’s Economic Development, urged the Federal government to take urgent steps to endorse AfCAFTA in order to key into what he called a window of opportunity for the country to maximise its economic potential.

    He expressed concern over the inability of the  government to endorse the agreement, which was produced from the decisions and milestones articulated at the Abuja Treaty of  1991 aimed at defining clear plans for Africa’s economic integration.

    According to him, the AfCFTA was signed in Kigali, Rwanda on March 21, 2018 by 44 of 55 African countries while Nigeria which hosted the forum that gave birth to the initiative was yet to decide on what to do with it.

    Oramah said it was worrying to well-meaning Nigerians and other countries of Africa that a treaty, which Nigeria gave birth to had to be delivered in Rwanda  while smaller countries that looked up to  her had  endorsed the agreement and went forward to ratify it.

    “The AfCFTA, which was signed in Kigali, Rwanda on March 21, 2018, was in line with the Abuja Treaty expectations. So … the child that was conceived in Nigeria was born in Rwanda. And with the emergence of that child, Africa sees a renewed hope, a reinvigoration to chart a new course,” Oramah told the audience in Lagos.

    Tracing the historical and economic imperatives that necessitated the birth of the AfCFTA, the Afreximbank boss noted that Africa benefited a little from  many years it was ruled by colonial powers whose main focus was to draw the raw materials it needed for its home industries while it dumped its own manufactured goods in return.

    He said the AfCFTA was meant to change the narrative as a continent that was called the “Basket Case”, is now on the path to becoming the “Bread Basket” of the world.

    Enumerating the benefits of the AfCFTA to Africa and to Nigeria in particular, Prof. Oramah said the treaty would create the environment for the continent to chart a new development path and eliminate the causes of weakness while upholding the areas of strength among the 55 countries of the continent.

    He also said the initiative would create the required economic integration that would promote sub-regional and continental supply chains such as the automotive industry, as “the AfCFTA offers opportunity for African countries to begin to create and nurture infant industries”.

    Oramah added that : “The AfCFTA creates opportunities for African economies, including Nigeria, to take over from China as the World’s manufacturing hub. China exports $45 billion of light manufacturers into Africa. Nigeria and other African countries can expect to fill that void if they take advantage of the tariff and non-tariff reductions in the AfCFTA.”

  • LCCI: AfCFTA is game-changer

    Signing the African Continental Free Trade Area (AfCFTA) agreement will be an economic game-changer for Nigeria, the Lagos Chamber of Commerce and Industry (LCCI) President Mr Babatunde Ruwase has said.

    The AfCFTA, signed in Kigali, Rwanda on March 21, last year, is a trade agreement between 49 African Union (AU) member states (excluding Nigeria), with the goal of creating a single market followed by free movement and a single-currency union.

    While some have expressed concerns over sustainability of investments should Nigeria sign it, Ruwase was of the view that the country stands to benefit from continental economic integration.

    He spoke during the 2019 Founders Day Lecture of the Nigerian Institute of Advanced Legal Studies (NIALS), with the theme: Inclusivity and the transformational potentials of the AfCFTA for African countries.

    Ruwase, who chaired the event, said: “The reality is that there is a great deal of value in economic integration, but as a country, we need to position ourselves well to take advantage of the opportunities it offers.

    “The AfCFTA is an age-long dream of the continent with regards to the promotion of trade and investment among African countries.

    “As a country, our decision on the AfCFTA could be a game-changer for Nigerian economy if we do the right thing at the right time.”

    The guest lecturer, Adjunct Professor at the Centre of Comparative Law in Africa, University of Cape Town, South Africa, Prof Faizel Ismail, said AfCFTA has the prospect of catalysing the process of transformative industrial development, cross-border investment, democracy and governance in Africa.

    Read also: LCCI: VAT hike’ll compound business woes

    He, however, advocated for fairer outcomes of the AfCFTA and a more balanced and mutually beneficial integration process.

    “African governments should ensure that their stakeholders: business (both big and small), trade unions and civil society NGOs are included in the national consultation process and, provide their negotiators with clear mandates for negotiations.

    “African countries need to build effective institutions that are inclusive and enable the fullest participation of stakeholders in the negotiating process.

    “This will improve both the quality and the sustainability of the AfCFTA agreements,” he said.

    NIALS Director-General Prof Adedeji Adekunle said the yearly Founders Day Lecture provides a forum for intellectual discussions on legal and related issues.

    “We use it to take stock of how faithful we have been to the mandate of the institute and the dreams of those who founded it.

    “The topic is one that is on the front burner. Even as we’re gathered here, CEOs from Africa are gathered in Kigali talking about what AfCFTA holds for them.