After 16 months of intense pressure and lobbying from within and outside the country, Nigeria finally signed the African Continental Free Trade Area (AfCFTA) Agreement on July 7 in Niamey, Niger Republic.
President Muhammadu Buhari signed the agreement at the opening of the 12th Extraordinary Summit of the African Union (AU). The next stage is for the instrument to be ratified by the Senate and House of Representatives.
Acting on the advice of the Manufacturers Association of Nigeria (MAN) and captains of industries, President Buhari earlier declined to sign the agreement and failed to attend the Kigali (Rwanda) Summit. His explanation was that the nation was still studying the instrument.
However, Nigeria’s poor industrial and productive capacity was given as the reason for the delay in joining the free trade area. The fear, according to some local industry experts, is to avoid making Nigeria a dumping ground and the attendant security risks.
The antagonists argued that the free trade market access was a concern to them, as it leaves little or no protection to locally produced goods. The Nigerian Labour Congress (NLC) said the deal would lead to the collapse of the manufacturing sector and loss of jobs in the country. It also raised the alarm that if the agreement is signed, the CFTA will turn Nigeria into a dumping ground for repackaged and re-bagged foreign goods from Europe and other developed countries.
In the imbroglio amidst pressure, the government set up a committee to study the impact of joining the AfCFTA, and the committee later recommended that Nigeria should sign the agreement. And the MAN, the Nigeria Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMMA) and the labour movement turned around in less than six months to support the agreement after the committee’s report.
In appending his signature, President Buhari warned: ‘‘Nigeria wishes to emphasise that free trade must also be fair trade.’’
“As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hardworking population.
‘‘I wish to assure you that Nigeria shall sustain its strong leadership role in Africa, in the implementation of the AfCFTA. We shall also continue to engage, constructively with all African countries to build the Africa that we want.’’
Buhari’s insistence on fair trade was borne out of fears being expressed by opponents of the treaty that signing the deal will be counter-productive.
For instance, the manufacturers had earlier screamed blue murder over issues of market access and the enforcement of Rules of Origin (RoO) under AfCFTA.
They argued, for instance, that the RoO cannot be adequately enforced to guard against the influx of goods into the Nigerian market.
However, stakeholders are still out on whether 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, holds the key to uplift Nigeria’s economic potential.
The free trade has been adjudged as a milestone in promoting Africa’s regional integration and helping to increase intra-African trade and boosting free movement.
It will do this by committing countries to liberalise services and trade and remove tariffs on 90 percent of goods.
The Organised Private Sector (OPS), which earlier kicked against it, now says Nigeria has more to gain because it will have access to the larger market of the member countries.
Mr. Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), said Nigeria’s access to African countries offers tremendous opportunities for “our firms’’.
He urged relevant agencies to effectively enforce the rules of origin of the agreement so as to build a competitive economy rather than having a disproportionate approach to the country’s industrialisation.
Mr. Mansur Ahmed, the President, Manufacturers Association of Nigeria (MAN) said: “Initially, we (manufacturers) were not fully prepared, but right now, we are more than ready to benefit and exploit the framework of the agreement.”
Mr. Ayoola Olukanni, Director-General, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said: “AfCFTA is designed for the economic integration of Africa along the lines of what is evident within the European Union (EU), the North American Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations (ASEAN).
“The reality is that AfCFTA is finally here, and the recent stakeholders’ meeting organized by the Coalition for Dialogue on Africa (CoDA) in Addis-Ababa is a clear indication that we are on the margins of history on the emergence of Africa as a single and unified market.
“However, only those who prepare for it will harness the full potentials,” he said.
Olukanni added that before the agreement, most Nigerian companies, including banks, operated in 18 African countries, while Nigeria practically dominated the entertainment and creative sector of the continent.
“Nigerian airline operators, in spite of the tough terrain of the domestic Aviation sector, provide services across the west and other parts of Africa.
“Now is the time for other sectors to harness the potential of the agreement,” he said.
The President of the African Export-Import Bank (Afreximbank), Prof. Benedict Oramah, one of the leading lights in the push for Nigeria to sign the deal was particularly livid that Nigeria, which hosted the forum that gave birth to the AfCFTA initiative, was yet to decide on what to do with it.
Oramah 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.
According to the Afreximbank boss, one of the benefits of the deal waiting for Nigeria to grab, is the possibility of taking over from China as the world’s manufacturing hub.
The African Union Development Agency-New Partnership for Africa’s Development (AUDA-NEPAD) also argued that the agreement would not only boost Africa’s economy, but was also capable of eliminating illegal migration, which has claimed many lives, especially Nigerians.
The National Coordinator/Chief Executive Officer, Mrs. Gloria Akobundua, noted that the gains include infrastructural development, job creation and economic growth and that Nigeria’s small, medium and large scale industries are well positioned for benefits.
In spite of these perceived benefits, the Nigerian Institute of Management (NIM) is still not comfortable.
Prof. Olukunle Iyanda, President of NIM, is worried that the agreement will not be beneficial to the nation due to the infrastructure deficit of the country.
“The agreement will not be too beneficial since the parameters to produce enough are not in place.
“My advice is that we specialise in the production of higher value export like cars, equipment and machineries rather than exchanging small value goods among member nations,” he said.
MM/GIK/APA