Nigeria, as at last week, seemed not to have overcome the dilemma of whether to sign or not to sign the Africa Continental Free Trade Area (ACFTA) agreement.
Africa’s Heads of Government had agreed in 2012 to establish a Continental Free Trade Area while negotiations started on it in 2015.
The agreement signed by majority of African countries in March 2018 proposes removal of tariffs on 90% of all goods, while the balance 10% of identified “sensitive items” would also be later phased in as tariff free.
The agreement also will liberalize commercial services and also address “non-tariff barriers” which include extended delays and harassment at border posts.
Free movement of people and a common currency will also ultimately evolve in such free trade area.
While countries are expected to enjoy at least 15 benefits despite the challenges from the agreement, some stakeholders believed that its implementation will increase intra-African trade by 52 percent by 2022, compared with trade levels in 2010.
But as at last week, Nigeria and Guinea Bissau, out of the 15 ECOWAS countries, have not signed the agreement.
The giant of Africa is also part of the six members of the African Union that have not signed the agreement.
Since four months ago, many Nigerian business stakeholders and labour unions have been opposing Nigeria signing the agreement, as they noted that Nigeria will be the loser for it.
The public outcry had made President Muhammadu Buhari in March 2018 to call off his planned trip to Rwanda for the signing ceremony.
He paused Nigeria’s signing the document and ordered for thorough consultations among the Nigerian business community and relevant stakeholders.
But the story seemed not to have changed much after the three months consultations nationwide.
There was still great opposition against Nigeria signing the ACFTA as witnessed during the 8th Presidential Quarterly Business Forum held at the old Banquet Hall of the State House, Abuja last week Monday.
Despite all the benefits that could accrue to Nigeria from signing the document, the Director General and Chief Negotiator, Nigerian Office for Trade Negotiations (NOTN), Ambassador Chiedu Osakwe at the Forum noted that certain issues still needed to be addressed first.
He said “In thinking about the ACFTA for the economy, it is important we think both in terms of goods, services and Nigeria’s intellectual property.
“There are number of studies that we have undertaking, all the studies including domestic, collaborative between researchers outside and researchers in Nigeria, simply show that the greatest beneficiary would be Nigeria, the number one economy in the continent.
“We also asked the researchers to do a poll of 512 Nigerian businesses, 69% understand, know about and support the ACFTA, 20% don’t think it is advantageous, and 12% are totally indifferent and they have not made up their minds. That was the feedback we got from the business community,” he said.
He went on “Under the Presidential directive, we undertook a nationwide consultation, hugely beneficial major exercise, we talked to about 28 individual groups and many of you are here.
“We went to all the six geopolitical zones and there were negotiated and signed communiques. Thirdly, through televisions and print media we called for inputs to be … autonomously submitted by businesses on their thinking about the ACFTA and what they would like to see.
“The business groups among you that on your own without any negotiation sent in autonomous inputs are eleven. They are the Association of Women Entrepreneurs, NACCIMA, FOCCIMA, NASMI, Agric business group, MAN, Eastern Economic Group, Nigeria Stock Exchange, NASG (submitted 7 different communiques, including one from each geopolitical zone), Nigeria Institute for Advanced Legal Studies, and Nigeria Defence Company.
“So, the sensitization and the nationwide exercise were very transparent and very open.
“I will like to conclude by saying what did we learn from the three months nationwide consultations and what’s the plan going forward.
“On current trend, the ACFTA should come into force before the end of this year, one point I should leave is this and you need to know because you are the drivers of the economy, Nigeria not engaged since the signing on the 21st of March. The reason I say this is that one, signatories including the 13 in ECOWAS are moving on with the development of the goods and services schedules and they will table them over the next few weeks with the AU with the ACFTA, so that work is ongoing.
“Secondly, with regards to the products specifics roles of origin, remember what we negotiated, agreed and will be signed are the general roles of origin. Negotiations have since resumed with the products roles of origin, I think you need to know that the world moves on nonetheless.
“There is a strong support for ACFTA, but at the same time there is a determination on the part of the private sector that there are longstanding issues in the domestic economy of Nigeria that must be addressed.”
Listing those things that should be addressed, he said “The starting point is power, predictable cost-effective power, because it has a lot to do with the competitiveness of Nigeria businesses, invest more in trading infrastructures, accelerate and build on the major successes Nigeria has attained on the ease of doing business, and the multiple charges, tolls and check points on the roads, good market access for goods and services, tightened and increased effective border control, and establish a trade remedy infrastructure before the end of this year.”
Many stakeholders who spoke after him also believed that Nigeria should not sign the agreement until certain issues are addressed.
Opposing the signing of the agreement, the Chairman of NEPAD Business Group and former President of the Lagos Chamber of Commerce and Industry, Chief Mrs. Nike Akande said that Nigeria’s goods and services should first be made competitive.
She harped on good infrastructure as a key to promoting trade and investment in the country.
The Vice President of the North-West Zone of the Manufacturers Association of Nigeria (MAN), Engineer Ibrahim Usman, added his voice by asking why Nigeria should be in hurry to sign the document if what is going on is still work in progress.
He charged the government to urgently conduct three studies including export market survey, study on national economic industrial product survey and study of liberalization on manufacturing in the country as a whole.
But Vice President Yemi Osinbajo at the Forum believed that Nigeria cannot afford to take the backseat despite the challenges the agreement would likely pose.
He said “With respect to the ACFTA, there are clearly huge advantages for us no questions about it at all. The rest of Africa see the enormous advantage of Nigeria’s participation, everybody is waiting for us naturally and that is because they see a huge market, they are advantages of our being there. But we must ensure to get the best possible terms for Nigerian trade and commerce.
“Our experiences with dooming and other injurious practices make it obvious to us that our market could be a real target, our local manufacturing could become unprofitable, our agricultural advantage could be reverse.
“I think the general resolve favours engagement but the concerns remains around improving the domestic environment for greater competitiveness, concerns of power supply and investment in infrastructure. I don’t think I will make a more eloquent case than the honorable minister of power, works and housing has just made.
“I have noted the various studies that MAN will like to see done, I think those background checks are important as to what works and what doesn’t work and what is going on with the industry and all that. I think those concerns are very crucial and I think many of them are being done already. But at the same time we must be careful not to give the impression that these are minimum pre-conditions for engagement with the process because the question of cause has been asked when will we be ready? What is the opportunity cost of not engaging now? I think these are some of the concerns that we must fixed.
“The only way to go is that we must fix the gap, we must keep the engine running, there is no time for us to say let’s wait, take down the entire time just to prepare. I think this is the time to ahead and do something about it while we are taking into accounts all the issues that have been raised and making sure that we are negotiating well,” he stated.
While it is very important now to urgently do more consultations and carry out further researches, care must be taken to ensure that Nigeria does not make any costly economic blunder.
Steps should also continue to improve the critical infrastructures in the country that will bring down the cost of production of goods and services that will make them more competitive against continental and global markets.
In other words, before opening our doors for favorable or unfavorable external competition, the environment should be put right for our local industries to stand firmly on their feet. Dumping of goods or services must never be allowed to kill local firms and compound the already worsened unemployment situation in the country.
