AfCFTA: Nigeria Customs, Others, Could Truncate Pact If…
Nigeria has joined other African countries to make history by signing the world’s largest free trade area deal, encompassing 55 countries and over 1.2 billion people.
The signing of the trade deal by the country’s President Muhammadu Buhari at the 12th Extra ordinary summit of the African Union [AU] effectively brings into force, the trade agreement between 55 African Union nations, that would create a single market backed by an African single-currency as well as a free movement protocol among others.
Social Action commends Nigeria’s President Muhammadu Buhari for his critical and empathetic approach toward signing the AFCFTA Agreement, a move which helped to scrutinize and understand the import of the agreement to Nigerian Economy.
It notes that the President’s method in activating rigorous consultations and assessments and scrutiny, was to ensure that the agreement becomes a meaningful platform for Nigerian manufacturers of goods and providers of service to showcase and offer to the continent their unique products and services, as well as to reciprocally receive products and services from other African nations thereby revolutionizing Africa into ‘Factory Africa’.
The President was also right in insistence on not only free but fair trade
The enactment of the AfCFTA is indeed good news for Nigeria and the African continent at large. Securing free trade throughout the continent has the potential to kick-start Africa’s industrial revolution and develops its economy in ways never before seen.
The UN estimates that under the AfCFTA, intra-African trade could increase by 52.3 percent by 2022.
When its implementation kicks off, the agreement will boost intra-African trade by removing tariffs on 90 percent of goods while the rest ten percent of tariffs being on “sensitive goods” would be also be eliminated subsequently, albeit gradually.
However, it is imperative to warn that Nigeria would only stand to harness and indeed maximise the benefits of this landmark trade deal if it immediately moves to put in place the right policies, frameworks and indeed structures to achieve set out goals.
Key institutions such as customs and immigration services must rise above board and dispense of their key roles in this continental pact with national pride and integrity, eliminating all known as well as contrived constraints including corruption that would jeopardize the smooth operation of the trade deal.
Government must also move quickly to address the infrastructural gaps such as electricity that undermines productivity of companies in Nigeria. Addressing infrastructural gaps will lead to reduced cost of production and stimulate industrial growth.
This will in the long run provide Nigerian companies with the opportunity to access large continental markets and thus gain from the economy of scale as well as mitigate adverse balance of trade.
Furthermore, time cannot be better than now, to pursue and implement the National Industrial Revolution Plan to strengthen the country’s Industrial sector, to empower it to effectively compete with those of other climates.
It must also ensure genuine diversification of the economy by affecting a paradigm shift from the mono-product situation of the country to multi-product to afford Nigeria the impetus to harness not just the new African trade deal but others as the proposed open EU markets.
The AFCFTA therefore, offers ample opportunity for industrialization and job creation as it has provided the platform for Small and Medium Enterprises in Nigeria to connect to regional and continental value chains while consolidating the country’s position as the biggest economy in Africa.
Programme Officer, Social Development Integrated Centre (Social Action)
Skype: Botti Isaac