Nigeria’s refusal to sign the AfCFTA

Nigeria was, once again, absent on a momentous day in African history when 44 African countries signed the African Continental Free Trade Area (AfCFTA) at a summit of the African Union in Kigali, Rwanda. The AfCFTA seeks to remove import duties and non-tariff barriers among member countries and could bring together over 1.2 billion people into one market, boost intra-African trade, making it the biggest trade agreement since the formation of the World Trade Organisation in 1995.

Unfortunately, 10 members of the African Union’s 55 member states, including its two largest economies – Nigeria and South Africa – did not sign the agreement, taking the shine off the momentous event. South African president, Cyril Ramaphosa, unlike Nigeria’s president, was present at the summit and stated the commitment of his country to the agreement once the necessary legal processes were undertaken.

Curiously, Nigeria’s reasons for refusing to sign the trade treaty, in which its international trade policy expert was the lead negotiator, was that it does not want to become a dumping ground for goods from African and European countries, who would use smaller countries to gain free entry into the Nigerian market. “We will not agree to anything that will undermine local manufacturers and entrepreneurs, or that may lead to Nigeria becoming a dumping ground for finished goods,” President Buhari tweeted on Wednesday. The special adviser to the president on Media and publicity, Femi Adesina added subsequently that the president said the country is yet to fully understand the economic and security implications of the agreement.
This only brings to focus the embarrassing lack of coordination within the Federal Government and its agents. Does it mean that on such an important issue, policy papers and memoranda had not been previously read by the President and Vice President before the crucial FEC meeting that ratified the treaty? Does it mean that the Vice President did not consult the President to know his thoughts before leading the entire cabinet to ratify a treaty with which their Principal disagreed?

What do we make of the fact that the globally-respected trade policy expert, Ambassador Chiedu Osakwe, who led Nigeria’s negotiations and played a very significant role in bringing African countries to achieve this momentous milestone, must now be extremely embarrassed by his President who is now making near-xenophobic statements about this African trade treaty.

And what exactly are Nigerian manufacturers afraid of? What have we been for imports from China and South East Asia all these decades? Which African country has a greater manufacturing/trade capacity than Nigeria outside South Africa? What does South Africa “dump” in Nigeria that harms us? The treaty is also not merely about goods. What about services? What about intellectual property? These are areas in which Nigeria does enjoy significant advantages. However, with this refusal to ratify the African Trade Treaty, we have effectively ranged ourselves against all our major trading partners. This is almost like our own Brexit, except that the President’s decision to act against the advice of his entire cabinet lacks a credible basis.

Does the president realise that in Africa, it has, perhaps, the largest number of its citizens living and doing business in other African countries? Does he realise that perhaps, beside South Africa, Nigeria has the largest number of its banks and companies pursuing internationalisation programmes in other African states? What will become the fate of Nigeria’s biggest industrialist, the Dangote group, now operating in over fourteen African countries and seeking to dominate the African market?

Perhaps, the president needs to consider the benefit of the AfCFTA to Nigeria and Africa as a whole. The AfCFTA has the potentials to permanently change Africa’s fortune from dependence on assistance to increased trade. Intra-African trade, which currently stands at only 10 percent, is the lowest in the world and one of the chief reasons for Africa’s backwardness. Our salvation ultimately lies in trading amongst ourselves and consequently developing our economies and not in isolationism as Nigeria is tending towards.