South Africa moves ahead Nigeria on AfCFTA

Cyril Ramaphosa might have left Kigali on May 21 without signing the African Continental Free Trade Area (AfCFTA), but his South Africa has now set the ball rolling, concluding discussions and deliberations on key Protocols ahead of Nigeria.

“South Africa and the AfCFTA: Conclusion of annexes to Protocol on Trade in Goods and the Protocol on Dispute Settlement ‘enables South Africa to rapidly commence domestic processes of the AfCFTA,” Richard Humphries, South African trade consultant, posted on Twitter on June 6.

“The next phase of AfCFTA negotiations will be led by Uganda, DRC, Mauritania, South Africa, CoteD’Ivoire as the newly elected AMOG Bureau. Other key outcomes and deadlines agreed from the Dakar ministerial,” Humphries added.

South Africa penned only the Kigali Declaration on March 21, leaving behind two major agreements—AfCFTA and the Free Movement Protocol. But all is now set for Africa’s strongest economy to become part of a global Africa.

Nigeria’s President Muhammadu Buhari initially agreed to sign the treaty but later baulked at it at the eleventh hour on the excuse that private sector was not consulted.

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.

Nigeria has fewer than 180 days to sign this deal or risk starting afresh to negotiate all over, a move analysts say could hurt the economy, robbing the country of free trade benefits and worsening smuggling.

Experts worry that Nigeria may miss out on this opportunity as Nigeria’s president seems more focused on his re-election than on economy.

“South Africa is inching towards signing the AfCFTA treaty; Nigeria is still navel-gazing with endless ‘stakeholders’ sensitisation’ that is going nowhere. With next year’s general election on the politician’s radar, expect AfCFTA to be kicked into the long grass,” Olu Fasan, international trade negotiator and visiting fellow at the International Relations Department of the London School of Economics (LSE), said in response to South Africa’s progress.

Experts say the AfCFTA will likely 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.

It is expected to establish a single customs union across the continent and allow free movement of goods and persons.

There are four Protocols being negotiated on AfCFTA: Protocol on Trade in Goods, Protocol on Services, Protocol for Rules and Procedure as well as Protocol for Rules on Settlement of Disputes. South African private sector players are involved in negotiating the Protocols, but some private sector players say they are not part of the negotiation despite the window given for negotiation.

“We have made several presentations and made some initial presentations on what we wanted to be on the list, especially as it affects Protocol on Trade in Goods, but we do not have any clarity now and we we do not know what is happening and not part of the negotiations,” said Segun Ajayi-Kadir, director-general of the Manufacturers Association of Nigeria (MAN), told BusinessDay on the phone.

“Even though we have concerns as a nation, if we choose not to go ahead, Africa will move on,” said Bamidele Ayemibo, lead consultant at 3T Impex Trade Academy and chairman of LCCI Export Group.

“We should be the major beneficiary. Most of the issues like rules of origin have been taken care of, and we still have 10 percent to negotiate,” Ayemibo added.

ODINAKA ANUDU