Nigeria’s next president must take firm position on AfCFTA

Nigeria’s next president must be one that can take a firm position on African Continental Free Trade Area (AfCFTA).

Nigeria has failed to take a decisive step on the AfCFTA, which targets to liberalise trade among African countries.

Already, 49 countries have signed onto the agreement, with South Africa, second biggest economy, also among them.

Discussions on the treaty are on now, with Africa’s biggest economy and most populous country missing.

President Muhammadu Buhari had wanted to sign on the agreement in March at Kigali but pulled back on pressure from labour unions and the Manufacturers Association of Nigeria.

“AfCFTA is entering critical stages and negotiations are going on in priority sectors while Nigeria is still indecisive. We must therefore remember that the world will not wait for us. We need to sign so that we can be involved in negotiations, especially with regards with our areas of concern,” Iyalode Alaba-Lawson, national president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) said.

The AfCFTA is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994, targeted at creating a single market for Africa’s 1.2 billion people and exposing each country to a $3.4 trillion opportunity.

The deal is expected to raise Africa’s nominal GDP to $6.7 trillion by 2030 if all African countries sign up.

The treaty will liberalise 90 percent of  products produced in the continent. This means that a country that is bound by the AfCFTA can only protect 10 percent of its local industries.

Experts say the world will not end if Nigeria does not sign the treaty, but investors will prefer a small African country which has access to 1 billion people— a potentially bigger market— than the protectionist Nigeria with an access to just about 200 million people.

Other countries will also move on without Nigeria and the country will be a late comer by the time it makes up its mind to sign, experts warn.

Babajide Sodipo, regional trade adviser at the African Union Commission, said at the 12th Annual Business Law Conference of the Nigerian Bar Association Section on Business Law (NBA-SBL) in Abuja, that nobody will wait for Nigeria if it does not sign the treaty.

“It will simply mean that life will go on without Nigeria, and then it becomes progressively much more difficult for you to catch up because, eventually, to the extent that you do not want to cap your growth, to the extent that you do not want to lose the market opportunities that you have, you still have to sign,” Sodipo said.

The Manufacturers Association of Nigeria (MAN) believes that the country is not competitive enough to sign on the agreement. MAN also believes that the AfCFTA is shrouded in secrecy and that Nigeria will be worse for it if the country signs the agreement in its current form.

Frank Jacobs, former president of MAN, had  argued that there were no studies validating the benefits of AfCFTA, saying that it would be unwise for the country to go ahead with the treaty.

Findings show that a once disaggregated Europe came together in Maastricht, Netherlands, on November 1, 1993,  to form a formidable free trade union made up of 28 countries with a GDP of $18.4 trillion, making it the second largest economy in the world after the United States.

A study published in July of 2014 by the Bertelsmann Stiftung, a German foundation, showed that German real GDP jacked up at an average of €37 billion per year since 1993, translating into a yearly income rise of €450 per person. Danish citizens’ yearly income rose by €500 over that same period.



You might also like