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  • Actualising the African Continental Free Trade Agreement

    Actualising the African Continental Free Trade Agreement

    The drive to actualising the African Continental Free Trade Area is gaining momentum. The Access Corporation pooled economic experts, including Taiwo Oyedele and Bismarck Rewane to brainstorm on the way forward and ex-ray the benefits of the AfCFTA agenda, write Group Business Editor, SIMEON EBULU and EKAETE BASSEY.

    The AfCFTA, the acronym for the African Continental Free Trade Area or Agreement, as it is variously called, is gaining traction, as it is seen as the gateway to the continent’s economic development. The initiative which is the brainchild of the African Union (AU), is being vigorously pursued by the African Export and Import Bank (Afreximbank), is to date been endorsed by over 64 countries.

    The AfCFTA is seen and envisaged to provide the African Continent the needed economic bloc, which when engaged on the specified terms, will afford member countries easier access to each other’s markets, without border and regulatory constraints that hitherto act as hindrances to international trade.

    Trade blocs have become common features around the world. Countries have always leveraged on geographical contiguity, communality, and other bilateral and multilateral frameworks to foster trading blocs, or associations. The USA- Canada Trade Pact, the Eurozone and NAFTA, are s few examples.

    AfCFTA is coming with a lot of potentials, but challenges lay ahead. The problem of multiple currencies in use from one country to another, exchange rates disparity and near absence of internet infrastructure to enable money transfers, are a few critical minuses that can result in hiccups. Add to that the issue of raw materials processing and standardization, and not ignoring communication barriers brought about by illiteracy, and what have you.

    Notwithstanding these myriads of challenges, the financiawl and banking sub-sectors are upbeat that the AfCFTA holds so much benefits for the African Continent and its economy, so much so that the inherent barriers will not be aloud to stand to becloud the benefits that the free trade area holds for the region. That account for why several dialogue and strategy sessions are being held regularly and everywhere to strategize on how to surmount the obstacles.

    One of such sessions is the one hosted by Access Corporation, owners of Access Bank PLC.

    To speak to the pivotal issues that are expected to drive the growth of the African Free Trade Area, Access Bank put together an assemblage of knowledge driven experts, who in their chosen fields, have proved their mettle and are schooled in the art of regional and global economic matters, that can proffer solutions to the challenges envisaged in midwifing the issues around the AfCFTA.

    The African Continental Free Trade Area, as envisioned, could turn out to be one of the biggest trade blocs, given the size and resources embedded in African countries.

    Read Also; Now that NNPCL is out of the radar

    It is envisaged by the promoters, that the operation and trading activities and other commercial undertakings that will take place across the region, will give rise to the establishment of industrial hobs and processing centers that will require extensive and deep funding that only banks and financial institutions with requisite balance can handle. To date, many development banks, including Afreximbank, African Development Bank (AfDB), among others, including Access Bank in Nigeria, including their counterparts in North Africa and South Africa, have developed flourishing desks designed to handle export related businesses. Many of these institutions have established foreign branches that are competing favourably with indigenous ones in the host countries.

    Renowned economist, Bismarck Rewane highlighted the pivotal role of banks in Nigeria’s economic rebirth amidst significant economic reforms.

    Speaking in September at the second Access Bank Forum, Rewane, CEO of Financial Derivatives Company Ltd., emphasised that the nation is at a critical juncture, requiring strategic interventions from both the financial sector and the government.

    Rewane opened with a broad overview of the economic outlook for 2026, forecasting Nigeria’s growth rate at 3.5 percent, making it the second-largest economy in Sub-Saharan Africa.

    He warned that while the future holds potential, the current economic landscape is fraught with challenges.

    The country faces high inflation, substantial debts, and growing poverty levels, creating a daunting environment for recovery. Against this backdrop, Rewane stressed that the banking sector, particularly through institutions like Access Bank, holds a significant key to driving the recovery efforts.

    “Banks are no longer just intermediaries; they are the lifeblood of economic activities in a developing economy like Nigeria,” Rewane noted.

    He pointed out that with the proper regulatory framework and reforms, banks can serve as catalysts for growth by facilitating investments in critical sectors such as agriculture, telecommunications, manufacturing, and oil and gas.

    One of the central points in Rewane’s presentation was the need for financial institutions to lead the charge in nation’s Accelerated Stabilisation and Advancement Plan (ASAP), designed to advance President Tinubu’s economy-related “8 Priorities.”

    He explained that the banking sector’s ability to extend credit and support key government programmes will be instrumental in addressing poverty, stimulating demand, and supporting household incomes.

    “The stabilisation plan is not merely about pumping money into the system,” Rewane cautioned.

    “It’s about strategic interventions in sectors that drive productivity and enhance competitiveness, such as agriculture and manufacturing.”

    He pointed out that banks must adopt innovative financing solutions, such as digital-only banking, partnerships with fintech companies, and support for small and medium enterprises (SMEs), to bridge the gaps in financial inclusion.

    Rewane’s assessment highlighted the importance of foreign exchange stability, which remains a critical challenge for businesses in Nigeria.

    He predicted that by 2026, the naira would stabilise at N1550 per dollar in the parallel market, a key factor that could encourage greater participation in the nation’s economy.

    He credited the financial sector’s potential to mitigate the risks by facilitating inflows through diaspora remittances and improving access to credit for businesses, especially those in export-driven sectors.

    “Investment in deep offshore drilling, green bonds, and sustainable projects can transform the oil and gas sector, but banks must lead the charge in facilitating these investments,” Rewane stated.

    He stressed that banking institutions must be at the forefront of financing the next wave of infrastructure development, including power generation, transportation networks, and renewable energy projects, to unlock Nigeria’s economic potential.

    Looking ahead, Rewane projected that the banking sector’s performance would grow substantially, with sector growth expected to reach 38.45 per cent by 2026.

    However, he warned that the sector faces risks such as regulatory fragmentation, high credit risks, and non-performing loans (NPLs).

    To overcome these challenges, Rewane called for the recapitalisation of banks (which is ongoing), and the consolidation of the financial industry to build a more resilient system.

    In conclusion, Rewane’s message at the Access Bank Forum was clear: banks will play an indispensable role in Nigeria’s economic rebirth.

    He urged financial institutions to step up their efforts, not just by lending, but by becoming key partners in the country’s stabilisation efforts.

    “By supporting growth across industries, enhancing access to capital, and fostering financial inclusion, banks like Access Bank can help steer Nigeria toward a brighter economic future,” he added.

    Also speaking at the session, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, laid out an urgent and comprehensive agenda to address the country’s fiscal and economic challenges.

    In the face of Nigeria’s pressing socio-economic challenges including slow economic growth, high inflation among others, Oyedele, during the 2024 Access Corporate Forum on “Sustainable Economic Growth”, argued that bold reforms, particularly in fiscal governance, tax collection, and public spending, are imperative to reverse these trends and promote shared prosperity.

    Present Economic Realities

    He acknowledged Nigeria’s harsh economic landscape, characterised by a GDP growth of approximately 2 percent annually over the past decade, well below the population growth rate.

    “Over 95 million Nigerians live in monetary poverty, with an even larger 133 million people suffering from multidimensional poverty,” Oyedele highlighted.

    He also pointed to Nigeria’s growing debt, with debt service reaching 96 percent of government revenue in 2022 and 74 percent in 2023.

    This fiscal strain, he noted, is compounded by declining foreign investments and capital formation, alongside a worrying trend of emigration and corporate divestment.

    Public Expenditure and Revenue Shortfalls

    In his analysis of public expenditure, Oyedele underscored the 2024 Aggregate Budget for both the Federal Government and states at N51.1 trillion (circa US$32 billion).

    However, this is dwarfed by the revenue shortfall, driven by Nigeria’s low tax revenue profile compared to countries like Kenya and South Africa.

    Despite having a wide tax base, inefficiencies in collection and compliance mean that “Nigeria cannot afford to continue business as usual. Incremental progress is simply not enough,” Oyedele stressed.

    He highlighted a multiplicity of taxes and taxing agencies across all levels of government, complicating compliance and frustrating taxpayers.

    Why Tax Revenues are Low

    A key factor behind the country’s low tax revenues is poor tax morale, Oyedele argued.

    He cited findings from a recent NESG Tax Perception Survey, revealing that only 17 percent of individuals and 31 percent of businesses consider tax evasion wrong. The survey indicated “Nigerians have low tax morale – most people don’t pay the correct tax to the government and they do not think that evasion is wrong.”

    Tax Morale is the willingness to comply with taxes and the belief that tax evasion is wrong according to NESG.

    “There is a significant lack of trust in the government, dissatisfaction with social services, and a highly complex tax process, which discourages compliance,” he explained.

    The survey also highlighted that Nigerians prioritise basic needs like electricity and security over tax compliance.

    Reforms to Harmonise Taxes

    To remedy these systemic issues, Oyedele proposes tax harmonisation as a cornerstone of fiscal reform. The goal is to simplify Nigeria’s tax structure by reducing the number of taxes across all levels of government to a single digit.

    “We must eliminate nuisance taxes with low revenue yield and high collection costs, which ultimately burden the poor and small businesses,” he said.

    Oyedele envisions a system that focuses on a few, broad-based taxes that are easier to collect, including income tax, value-added tax (VAT), property tax, customs duties, excise taxes, and stamp duties. Additionally, he called for a national single revenue platform to streamline the collection process.

    2024 National Fiscal Policy and Proposed VAT Reforms

    The committee’s 2024 National Fiscal Policy emphasises equity, simplicity, and transparency. Oyedele advocates for tax reforms that lower the burden on essential goods while increasing rates on non-essential luxury items.

    “The current VAT regime taxes essential items that account for 82 percent of the consumption of low-income households. We are proposing 0 percent VAT on food, healthcare, and education,” Oyedele outlined.

    Furthermore, the reforms aim to exempt 97 percent of small businesses from charging VAT, reduce audit processes for VAT refunds, and ensure equitable sharing of VAT revenues among states.

    Constitutional Amendments and Long-Term Goals

    Oyedele’s vision extends beyond immediate fiscal adjustments. He proposes significant constitutional amendments, including the establishment of a Federal Revenue Court and a cap on the number of taxes imposed by different government tiers.

    These amendments, according to Oyedele, are vital for ensuring long-term fiscal discipline and transparency.

    “Reforms must be institutionalised to ensure sustainability,” he added, stressing the importance of embedding these changes within Nigeria’s legal and governance framework.

    Facilitating Shared Prosperity

    According to the Chairman, Presidential Fiscal Policy and Tax Reforms Committee, at heart of the center of the reform agenda is the need to facilitate shared prosperity and sustainable growth.

    The committee’s mandate, he indicated, focuses on protecting the poor, harmonising taxes, digitising revenue systems, and promoting fiscal federalism.

    The ultimate goal, Oyedele reiterated, is “to promote inclusive growth by removing bottlenecks and disincentives that hinder investment and economic progress. We aim to ensure that Nigeria’s fiscal policy is purposeful, coherent, and investment-friendly.”

    He reaffirmed that these reforms present a bold and necessary blueprint for restoring fiscal balance, fostering shared prosperity, and positioning the country on a path to sustainable growth.

  • Africa trade agreement in Nigeria’s interest-NACCIMA boss

    The National Association of Chambers of Commerce, Industry Mines and Agriculture (NACCIMA) has called on the federal government to sign the African Continental Free Trade Agreement (AFCTA), saying it will help reposition the country’s competitiveness in the area of locally manufactured goods.

    The immediate past President of the Association, Chief Iyalode Alaba Lawson, who disclosed this while speaking to Commerce and Industry Correspondents during the commissioning of Ide John C. Business Centre at NACCIMA headquarters in Lagos, noted that signing the agreement would make the local manufacturers to enhance their capacity utilisation.

    She pointed out that it will further put the government on its toes, adding that such trade treaty will lead the country to fixing and improving on the much needed infrastructure required for global competitiveness.

    Lawson maintained that when proper trade policies are put in place and judiciously enforced, the country has nothing to be afraid of, stressing that it would only bring out the best from Nigeria.

    The outgoing NACCIMA boss, who regretted that unemployment rate is still high, recalled that she launched an empowerment programme ‘Catch them young and teach them how to become an entrepreneur using their talents.’

    Pressed further, she said, she partnered with some government agencies like the Federal Institute of Industrial Research, Oshodi (FIIRO), Nigeria Export Promotion Council (NEPC), for capacity building, training, and workshops to harness the talents of the prospective startups.

    Specifically, Chief Lawson disclosed that she opened the Youth Entrepreneur Centre in 17 states which has trained and empowered over 50 thousand youth entrepreneurs.

    “NACCIMA Export Promotion Group is doing extremely well to improve our Gross Domestic Product (GDP), you need to have very good strong export group that will obey the rules and regulations of each country, so that we can compete favourably all over the world,” she said.

  • Nigeria and African free trade

    Given the latest debate about new minimum wage, labour is cheaper in Nigeria than in over 40 countries.

    Afew days ago, former President Obasanjo encouraged the rest of Africa to ratify the African Continental Free Trade Agreement (AfCFTA), regardless of whether Nigeria has agreed to come on board or not. On the Nigerian side, President Buhari’s sensitisation team is travelling across the country to raise awareness of stakeholders about the Free Trade agreement, preparatory to Nigeria’s final decision on this major goal of the African Union. From comments of pundits in the social media, the two schools of thought are starkly distinct. One is that Nigeria is not ready to join the group of 49 countries because the country is not sufficiently competitive to do so with smaller countries. And another says there are huge benefits waiting for Nigeria if it can do what is needed for Africa’s largest economy to be competitive.

    Both sides seem to have a point. The Buhari group which believes Nigeria is more likely to be a dumping ground, given its poor state of readiness, should it hop on the train of continental free trade at this point makes sense. The other group which claims that the benefits of signing the AfCFTA agreement are tempting enough to stimulate Nigeria to prepare itself to be competitive is also rational. But wringing of hands is not going to get Nigeria any benefit; what is needed is for the Federal Government to complete its sensitization of stakeholders. It will be appropriate if the outcomes of the consultation across the six geopolitical zones can be shared with citizens as soon as they are ready. Ordinarily, there should have been no reason to sensitize farmers, traders, and the few manufacturers in the country, except as a diplomatic way of temporizing on the part of the government. All the producers of goods and services in the country are always eager to enlarge the market for their goods.

    One thing that is at the root of Nigeria’s unpreparedness for AfCFTA at present is the high cost of production that makes the little we produce to be competitive even within the context of Africa. And that one thing is lack of power. While the extensive consultation is going on, the government ought to embark on how to end Nigeria’s stubborn jinx—failure to produce and distribute adequate power to large-scale manufacturers and households that could have been engaged in cottage industries.  Many people are already congratulating the federal government for moving the total number of megawatts from 3,000 to 7,000. And those trying to congratulate the Minister of Power are not wrong for appreciating the minister under whose watch at least 4,000 megawatts are added to 3,000 produced by military and civilian governments since Independence in 1960.

    But the immediate challenge before the country is the inability to transmit more than 3,500 megawatts. All the mendacity about declaring emergency in many sectors may become useful for the power sector, to make the 50 per cent of available energy meaningful for manufacturers, who can improve the country’s chances of joining fellow Africans to benefit from a regime of free trade within the continent. Given the latest debate about new minimum wage, labour is cheaper in Nigeria than in over 40 countries. Some would even say that only South Africa, Egypt, Botswana, Cote d’Ivoire, Morocco, Algeria, Tunisia, and Libya would have higher labour cost than Nigeria. Nigeria also has a large labour pool than other countries in Africa. Barring the jinx of irregular electricity, Nigeria is poised to compete efficiently with its African neighbours. We thus need not waste too much time on sensitizing stakeholders; we need to get the country’s transmission of electricity in good working order.

    Undoubtedly, fixing the problem of transmitting the energy already in store will save power generating companies from looking for buyers in Burkina Faso, a much smaller and less resource-rich country than Nigeria, which has already signed the African Free Trade Treaty. As most of the energy now unusable in Nigeria because of a rickety transmission system has not been made possible by the River Niger, Nigeria has no reason to be under pressure to sell such energy to Burkina Faso and would not have given such idea a thought if Nigeria were able to take advantage of about 4,000 megawatts of power currently lying fallow in various parts of the country.

    Nigeria is too important and full of potential to benefit from free trade within Africa to fail to take the kind of advantage that countries such as China, the U.S.A., India, Indonesia, South Africa, and Brazil reap from having big populations and reliable electricity to keep their factories open. It is reassuring that President Buhari is not averse to Free Trade within Africa. The major disadvantage is poor infrastructure that needs to be improved to make participating in such trade meaningful for Nigeria. Nigeria is certainly at a point that it should declare emergency in the energy sector with the hope of quadrupling the country’s 7,000 megawatts and making sure that 50 per cent of such power can be made useful within 12 months. Whatever we borrow to make this possible can be gained from Nigeria’s participation in the continent’s regime of free trade.

    The African Free Trade Treaty is too important to be turned into an opportunity for politicians to turn into an excuse to harangue each other as the debate over African free trade became when Obasanjo said Buhari’s hands are too weak to sign the treaty or for ‘economic purists’ to insist that Nigerians must be sensitized before any decision can be made to sign the treaty already endorsed by 49 out of 55 countries. The real problem facing the country is not inadequate understanding on the part of Nigerians of the advantages of AfCFTA. It is inadequate energy to make the country competitive to take its seat in a Union that it has helped to nurture for decades that needs to be addressed immediately. The Minister of Power should be given all resources needed to position our country to take advantage of the competitive market that majority of the states on the continent have agreed to create. He should also be given a deadline to end the problem of Nigeria’s lack of competitiveness, on account of poor capacity to transmit electricity already generated.

    It is not good that Nigeria is not already a part of the continent-wide free trade initiative, given the country’s leadership role on the continent since 1960. Nor is it good for other countries already committed to free movement of goods, services, and persons which can benefit from Nigeria’s experience.

  • Obasanjo pushing $27b free trade agreement

    Former President Olusegun Obasanjo has advised African leaders to sign  the African  Continental Free Trade Agreement (ACFTA), which promises $27billion investments.

    Obasanjo, who spoke yesterday in Cairo, Egypt at the opening of the Intra-African Conference prior to the unveiling of the first Intra-African Trade Fair (IATF), said the fair was necessary to actualise ACFTA,  which, he stressed,  is vital for the continent’s transformation. “It is, therefore, imperative that all African governments, who believe in Africa’s progress, should not only sign the  ACFTA, but should ratify it at once, making a way for its implementation,” Obasanjo said.

    The first of its kind in Africa, IATF is expected to churn out deals worth over $27 billion. Obasanjo said the event had been designed to drive inter-African trade and support the implementation of ACFTA. He tagged ACFTA    a landmark agreement in the context of its value in economic integration, transformation  and progress in Africa’s development.

    The trade fair, in his words, “will give each participant a platform for sharing in the context of African trade, investment and economic integration, leading to the  transformation and  development  of the continent.

    “It will give opportunities to investors to showcase their goods and services  and share with others the trend and market openings.”

    Obasanjo praised the Africa-Export Import Bank (Afreximbank) and its Chairman, Prof. Benedict Oramah, for its contributions towards bringing the IATF dream to fruition.

    He said: “When we started planning for the project, we did not have any financial resources.  Afreximbank provided significant financial resources, but Professor Oramah and  other senior management members of the bank committed so much of their time and resources with enthusiasm ad conviction that the trade fair would pay-off and would contribute ultimately towards the actualization of the ACFTA, which will play a vital role in driving business and generating employment  across the continent.

    “Afreximbank and the AU have worked tirelessly since the announcement of the trade fair in Kigali in March this year,” he stated.

    Obasanjo said that without uninhibited trading among African countries, intra-African trade fair will amount to a sham.

    “Africa needs to focus on what trade is needed, where the markets are, the size of the markets, and the standards required by those markets; how and where to implement the value chains that serve the market.

    “We also need to fashion out the medium of payment within Africa for intra-African trade expeditions. These factors need to be combined in ensuring that there is commercially viable return and that the markets chosen are sustainable.”

    He said when Africa actualises its potential, it would earn more respect from the human race.

    Oramah said Africa was making history at the IATF by reversing the colonial strategy of divide-and-rule, adding that  the event signalled Africa’s readiness for economic independence. As he put it, “Africa should use the force of history to change the course of history,” he said.

    Some 1,150 exhibitors from 80 countries are to participate in the fair, with close to 40 from outside the continent.

    A large number of exhibitors, many of them from Nigeria, are at the fair. The Managing Director of the Bank of Industry (BoI), Olukayode Pitan, United Bank for Africa (UBA) Chairman Tony Elumelu, BoI Executive Director, Small and Medium Enterprises (SMEs) Waheed Olagunju are at the fair. Dangote Group, Fidelity Bank, several firms from Europe, Turkey, China, Indonesia, among others, are there. The Prime Minister of the Arab Democratic Republic of Egypt, Mustafa Madbouly represented the Egyptian President at the opening ceremony.

     

  • Nestle sees huge export benefits in AfCFTA

    Head of Corporate Communication and Public Affairs, Nestle Nigeria Plc, Gloria Nwabuike, has said there is  a lot of potential in the African Continental Free Trade Agreement (AfCFTA).

    She stated this a media parley in Lagos.

    She said: “We see a lot of potential in the African Continental Free Trade Agreement (AfCFTA). It will make it easier for us to get the documentation, all the approvals and all that we need to export because for us, that is something that really causes a lot of delays, bottlenecks, and all that, and looking at the shelf-life of products, that is a struggle for us a lot of the time. So, the AfCFTA should actually make it easier for us to operate in this environment in the way that we have been operating already.’’

    “You know that Nestle is present not only in Nigeria but across West Africa, also across East Africa and across South Africa. The way we operate at Nestle is to consolidate our base and then export to neighbouring countries, so our products are already going across the continent, for instance, the Nescafe we have here are imported from Ivory Coast leveraging on our regional hubs and the GoldenMorn which is made in Nigeria, is going across the borders to other countries.

  • Free trade deal: What’s in it for Nigeria?

    President Muhammadu Buhari’s refusal to sign the African Continental Free Trade Agreement(AfCFTA)at the just concluded African Union summit in Kigali,Rwanda, has raised mixed reactions from a cross section of Nigerians over the propriety or otherwise of that decision.  Ibrahim Apekhade Yusuf in this report examines the issues

    How free is free trade? This is one simple question that has been hotly debated so much with welter of criticism rife amongst the organised private sector most of who have stoutly opposed Nigeria’s participation in the African Continental Free Trade Agreement(AfCFTA)signed at the just concluded African Union summit in Kigali, Rwanda.

    At the AU meeting in Rwanda, 44 African countries signed the AfCFTA framework agreement. The continent’s two biggest economies, Nigeria and South Africa, refused to sign.

    Like Nigeria, South Africa’s President Cyril Ramaphosa reportedly said his country will join the agreement when the necessary legal processes are concluded. He said he will sign once the legal and other instruments associated with the trade bloc are processed and ratified by South African stakeholders and parliament.

    What the AfCFTA is all about

    According to statement issued on its website, 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,gave birth to the AfCFTA which was designed to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3 trillion.

    The agreement, seen as an important milestone in promoting Africa’s regional integration and helping to increase intra-African trade, requires that countries remove tariffs on 90 per cent of goods and to liberalise services. Just as its  has its main objective as the creation of a single continental market for goods and services, with free movement of business persons and investments.

    The AfCFTA treaty is one of the flagship projects of the African Union Agenda 2063, and is aimed at creating a single continental market for goods and services, with free movement of business persons, investments and a single currency.

    Furore over AfCFTA

    Interestingly, former President Olusegun Obasanjo is one those that has raised his voice above the din over the inability of President Buhari to sign the Africa Continental Free Trade Area agreement, warning that there are dire implications if the president decides to change  it may be too late when he changes his .

    Obasanjo poured out his mind on the AfCFTA during a presidential panel, titled: ‘When Leaders Make History’ at the Africa CEO Forum in Abidjan, Cote d’Ivoire on Tuesday. He was joined by the President of Zimbabwe, Emerson Mnangagwa.

    Obasanjo said, “That President Buhari didn’t sign the free trade agreement in Kigali is disappointing; I hope he signs it before it is too late.

    “Egypt started the discussion on the formation of the Organisation of African Unity but didn’t conclude it and Nigeria took over. Nigeria was also central to the discussion of the free trade agreement, but I am surprised that the country withdrew from signing.”

    Besides, there are fears on what may be the adverse implications of such action chief among which is the  fact that it will boost smuggling activities. However, the Minister of State for Commerce, Industry, Trade & Investment, Hajia Aisha Abubakar, recently said that the government will in due course, make its position known on it, pledging that government remained poised towards protecting indigenous manufacturers.

    The federal government had delayed the signing of the treaty to allow for more deliberations and input from stakeholders and had set up a committee on the issue before the President would sign the treaty.

    OPS groundswell of opposition

    But the President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, said the government’s enforcement mechanism in the area of enforcement of rules of origin needed to be clearly defined before local producers could support the agreement.

    Jacobs noted that although, he and other MAN members were not oblivious of the benefits inherent in the establishing the AfCFTA could improve intra-African trade and enhance economic growth and sustainable development, Nigeria must be cautious before rushing into a free trade agreement with other African countries.

    He, therefore, urged the government to renegotiate trade conditions that could impede economic growth in its review of the (AfCFTA) agreement.

    Jacobs, who spoke in Lagos, last week, said the trade pact will result in job losses, as most manufacturing companies in the country will close shop.

    He explained that the private sector’s agitation was because of the lack of consultation and inclusion of inputs of key stakeholders before Nigeria’s position was presented at the meetings of the AU-Technical Working Group on CFTA in the build-up to AfCFTA negotiation by Nigeria.

    Jacobs urged the government to set in motion a process that will enable all stakeholders on the international trade value chain in Nigeria to quickly review the text of the draft AfCFTA agreement and come up with comments on areas that are not in the best interest of the economy and sectors.

    He said: “The government should, as matter of urgency, convene a special meeting of the relevant stakeholders, including experts on trade policy, to consider tariff lines rates along the line of efficiency, sectoral and sub-sectoral preferences that would be most beneficial to Nigerian businesses under the AfCFTA dispensation.

    “It will also reconsider the national position on EPA vis-a-vis the AfCFTA, especially on tariff lines of products on the sensitive/exclusion list, with a view to ensuring that the EU-EPA is not reintroduced through the AfCFTA’s back door.

    “Review presentations and prepare a detailed submission for the Government on ways and means of participating in the AfCFTA in a manner that our national interest and that of the budding manufacturing sector are effectively protected.”

    While commending Buhari for refusing to sign the trade deal, Jocobs reiterated that MAN will not support the government’s adoption and ratification of the agreement establishing the AfCFTA until the issues of market access and enforcement of ROO are addressed.

    As to be expected, before President Buhari’s scheduled visit to Rwanda for the Extra-Ordinary Summit of the AU on March 21, during which he was to sign the AfCFTA, a groundswell of opposition by OPS members, labour and other critical stakeholders in the economy, had trailed the proposed agreement.

    The labour movement, particularly the Nigeria labour Congress (NLC) and,other civil society groups also warned the President against signing the agreement. They insisted that it will hurt Nigeria’s productive sector and the economy generally.

    The NLC specifically warned the federal government not to sign the policy document, warning that it will cripple the economy and leave more Nigerians unemployed.

    Besides, it expressed fears that the agreement will expose the economy to foreign intervention, which will allow foreign firms to operate in the local market without employing Nigerians.

    NLC President Ayuba Wabba aligned with MAN’s President Frank Jacobs argument that the proposed agreement lacked the inputs of relevant stakeholders, including the organised labour.

    He said ordinarily, proponents of the

    Wabba said: “We find it confounding that at a time nations, including the United States (U.S) are resorting to protectionism in defence of their local businesses and protection of jobs, we have the audacity to want to fling open our doors, windows and roof tops.

    “We have no doubt that this policy initiative will spell the death knell of the Nigerian economy. Accordingly, we urge Mr. President not to sign this agreement either in Kigali or anywhere.”

    According to him, the national interest takes precedent and nothing should be allowed to compromise it.

    He said: “The AfCFTA, rather than unite Africa will only divide it the more.  Rather than enrich Africa, it will only pauperise it the more.

    “Those pulling the strings of this radioactive agreement are somewhere, well concealed and protected in the metropolis of the world. They have had this all thought-out and profits computed well ahead.”

    The United Labour Congress (ULC) faction of the NLC commended Buhari for putting a halt to its hurried signing of the trade deal.

    In a statement by its General Secretary, Didi Adodo, ULC said: “Nigeria is not only an importer nation, but also an economy with weak infrastructural base thereby increasing the cost of the products produced in Nigeria.

    “If signed, the AfCFTA will only encourage industrialised countries to use other African nations to push their products to the Nigerian market thereby killing locally produced goods. We reject it in its entirety.”

    Support for AfCFTA

    It is however instructive to note that a few discerning Nigerians pushing for AfCFTA have argued matter-of-factly that the supposed benefits of the trade pact are too good for Nigeria to ignore. Apart from its inherent capacity to promote economic growth and development, reduce poverty in the partnering countries (Nigeria inclusive), the promoters believe it would expand and diversify trade and increase domestic and foreign investment.

    The continent’s share in world trade is also not impressive, standing at less than three per cent. That informed the move to stimulate intra-African trade by at least 25-30 per cent to raise the continent’s share in global trade and competitiveness, African leaders came up with the idea of establishing AfCFTA.

    The AfCFTA they argue,would lead to a significant growth of intra-Africa trade and also assist Africa use trade more effectively as an engine of growth and sustainable development. It was expected to help Africa participate in global trade as an effective and respected partner.

    Besides,by the agreement include, enhancing competitiveness at the industry and enterprise level, through exploitation of opportunities for scale production; continental market access and better re-allocation of resources; provision of a comprehensive framework to pursue a developmental regionalism strategy for the continent.

    In the view of Prof. Jonathan Aremu,a professor of International Economic Relations at the Covenant University,Nigeria’s refusal to be of the epochal event is the saddest thing that can happen to any country.

    While trying to.justify what he considered a very awkward development.

    “Ithink the real problem with Nigeria is that there was not enough sensitisation and I agree. Secondly, the Nigerian Office of Trade Negotiation was just created August last year. I don’t think that office that is in charge of negotiation for AfCFTA has enough capacity in terms of funding to be able to organise a free trade area because up till now, I think that it was created by an Executive Order. So I don’t think they’ve been able to mobilise funds immediately to get it done.”

     

  • Labour hails Federal Govt’s stance on AfCFTA

    Organised Labour has hailed  President Muhammadu Buhari’s decision to hold more consultations on the controversial African  Continental Free Trade Agreement (AfCFTA) Act.

    Labour commended the vigilance of stakeholders, such as manufacturers, the Nigeria Labour Congress (NLC) and businesses, in calling for caution on international trade agreements that could undermine the country’s development aspirations.

    Nigeria failed to attend the meeting of the AU in Kigali, Rwanda, last Wednesday, where the agreement was scheduled to be signed.

    Speaking on the Federal Government’s position, NLC National Executive committee member and  Industrial Global Union Vice President Comrade Issa Aremu  noted that while intra-Africa trade could bring economic benefits to member states, there should be broad consultation and participation in the AfCFTA negotiations to avoid what he called “pit-falls of past trade agreements, which have turned out to be more devastating and negative”

    He recalled that Nigeria’s membership of the World Trade Organisation (WTO) in the 1990s with attendant lowering of tariffs and trade liberalisation was the singular factor that led to the collapse of labour-intensive industries like textile and automobile in the country.

    According to the labour leader, trade is the means to development, not the end itself, therefore, any trade pact must foster growth, create mass decent jobs and development, falling which it is counter-productive.

    “AfCFTA will fuel cheaper imports and smuggled goods that would overrun domestic markets of local products, which, because of high production costs, are unable to compete, thus perpetuating “deindustrialisation, unemployment and poverty,” he said.

    Aremu said rather than Nigerians agonising over the act’s non-ratification, it is high time Minister of Industry, Trade and Investment, Okechukwu Enelamah,  engaged stakeholders on the trade pact, answer critical questions on the implications of the AfCFTA, for ECOWAS treaty, and Common External Tariff and the contentious Europe Union Economic Partnership Agreement (EPA).

    Aremu averred that whatever the outcome of the deliberations, AfCFTA should allow Nigeria the domestic policy space such that the objectives of job creation and industrialisation as contained in the Economic Recovery and Growth Plan and Nigeria Industrial Revolution Plan are not jeopardised.