On July 7, 2019, Nigeria finally signed the African Continental Free Trade Agreement (AfCFTA) at the African Union summit in Niger. This was a historic event for Nigeria because of the much-awaited desire for Nigeria to sign the AfCFTA. The then president, Muhammadu Buhari, initially planned to sign this agreement during the launching at Kigali, Rwanda on March 21, 2018, but that didn’t go as planned owing to some concerns raised by the Manufacturers Association of Nigeria (MAN) and other organised private sector on the likely negative impact of this agreement on Nigeria.
Since Nigeria signed the agreement, the question we need to ask is how does Nigeria enjoy the benefit of this agreement? What does the country need to do to ensure it is well implemented for the benefit of the Nigerian populace? How do we ensure that it does not become one of those agreements Nigeria has signed in the past which are of no value to the citizen?
I will attempt to answer these questions in my next series of articles on AfCFTA Implementation Strategies. This edition is introductory and focused on the composition Inauguration of AfCFTA’s implementation committee. The Inauguration of the implementation committee became extremely important because of the inability to enjoy the benefits of such agreements in the past. Even though Nigeria is a major beneficiary of the ECOWAS Trade Liberalization Scheme (ETLS), I think this happened by default because many businesses are unaware of it. After all, there is no regular, active and deliberate effort to maximise the utilisation of the agreement. In a survey conducted by 3T Impex Trade Academy, it was observed that many SME manufacturers in Nigeria, particularly in Lagos, do not know about the ETLS, not to talk about registering their product for it. The few who know about it have issues with why they will not use it. This will be highlighted in the subsequent editions of this article. However, the major issues that stemmed from the survey were the lack of sensitisation on the elements of the programme (ETLS), the processes involved and the profits to the businesses in West Africa.
To ensure that Nigerian businesses enjoy in full the benefits of the AfCFTA and also that the prediction of those who are against signing the AfCFTA does not come to pass, there is a need to actively and intentionally put in place programs and policies that will ensure proper implementation of the agreement. I believe the proposed implementation committee should include people from both the public and the private sectors.
Public sector should include but not be limited to the likes of Nigeria Export Promotion Council (NEPC), Nigeria Custom Service (NCS), Standards Organization of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), Ministry of Foreign Affairs, Ministry of Trade and Investment, Presidential Enabling Business Environment Council (PEBEC), Small and Medium Scale Enterprise Development Agency of Nigeria (SMEDAN) and the Nigeria Office of Trade Negotiation (NOTN). On the other hand, the private sector should include but not be limited to the representatives from the National Association of Chamber of Commerce Industry Mines and Agriculture (NACCIMA), Bankers Committee, National Association of Small and Medium Scale Enterprise (NASME), Nigerian Association of Small-Scale Industrialist (NASSI) and Manufacturer Association of Nigeria (MAN).
In the subsequent series of this article, I will be sharing some thoughts on the challenges and factors that have hindered the implementation of these types of agreements in other parts of the world including the ETLS and several things that this committee needs to begin to do to be able to ensure that Nigeria fully benefits from this agreement. The strategies for overcoming the challenges of implementing free trade agreements in general and AfCFTA in particular are summarised in the Six-Pillar Model of Implementation of Free Trade Agreement. These pillars include Communication, Coordination, Collaboration, Capacity, Commitment and Cooperation.
The need to properly implement the AfCFTA is highly imperative. From the 2019 first quarter report of the foreign trade statistics released by the National Bureau of Statistics, there was an increase in the non-oil export volume which contributed about 13.3% of the total export volume from Nigeria. The major sector contributing to this increase was the manufacturing sector which constituted 77.3% of non-oil exports and 10.19% of the total export in the first quarter. This was a step in the right direction because a majority of what Nigeria will have to export to Africa will be manufactured goods.
The implication of this is that manufacturers now have more markets since they can export duty-free and therefore sell at a price that could most likely be cheaper than the ones from other continents of the world. This will consequently increase production and invariably increase the propensity of the manufacturers to hire more staff thereby creating jobs and reducing poverty in the African soil.
Look out for more in the series.
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