After a year of dilly-dallying, Nigeria on Saturday, July 6, signed on to the African Continental Free Trade Area. President Muhammadu Buhari inked Nigeria into the scheme in Niamey after it had secured enough signatories to come into force. In consequence, Nigeria is a latecomer to the latest economic plan that is part of the Vision 2063 of the African Union.
The Nigerian foot-dragging owed to so many factors but mainly a concern by manufacturers that other signatory nations may be a conveyor belt for dumping of products into our country.
As has happened now, their legitimate interest does not and could not preclude the imperative of playing in the broader African market that the Continental Free Trade Area represents. It is noteworthy that Nigeria signed without extracting any additional concessions.
The context of AfCFTA is that Nigeria and Nigerians were in the forefront in pushing the scheme. A Nigerian trade technocrat led the drafting committee. Nigeria played key roles up until it was time for the takeoff. Indeed, President Buhari was due to attend the ceremony for the unveiling of the scheme until a last-minute cancellation.
Extensive consultations followed within Nigeria with the Office of Trade Negotiation claiming it consulted 27 groups, from manufacturers to trade unions. With buy-in secured, Nigeria then joined other African countries to sign. Now the real work must commence.
According to the African Union, the AfCFTA will create the largest free trade area in the world. Trade between African countries would increase by 60% up to 2022. Currently, African countries hardly trade with each other; Intra African trade accounts for only 16% of the international trade of Africa.
The AU expects that a critical step would be the reduction of tariffs continent-wide. There is as yet no timeline for this, but countries at least know that this would happen. Some would be more aggressive than others in managing tariffs.
There would also be no quotas or other restrictions on trade. It is the open season. Countries will thrive or not on the quality and perception of their goods and services.
Nigeria should drive ahead with AfCFTA. Trade and collaboration are critical to the growth of the continent. Nigeria has a definitive comparative advantage in several areas with which to engage. Even with depletion over the years, the manufacturing sector in Nigeria is still active and participates in Good Manufacturing Practice standards. They manufacture world-class brands across the range, from pharmaceuticals to household goods to industrial products.
Even more so, Nigeria has a comparative advantage in soft power. Our Nollywood, music, fashion and cuisine have great appeal across the continent. So, too, our education.
Nigeria should drive intra-African trade deploying a mix of soft and hard power cohesively. Now is the time to activate the concept of public and private partnerships, so it becomes more than a buzzword. The ministry of trade should coordinate activities of Nigerian exporters working with other public sector organs as well as the private sector.
We should also listen to other sectors, such as services. Nigerian firms have excelled and have significant equity in various services, from banking, insurance, accounting, law, marketing communication to ICT. Nigerian goods and services have a broad and robust appeal. Many Nigerian service firms, from banking to insurance and others, have established beachheads across Africa. It should count for something positive now.
We should embrace AfCFTA. Nigeria should drive it. Nigerian firms and service providers should see the 55 countries of Africa as one enormous market.
AfCFTA would mean a thorough stock-taking by all players in the Nigerian market. The call is to raise their games in all areas: products, processes, packaging, marketing and customer service as well as relationships. Our Ministry of Trade should study what the Japanese Ministry of International Trade and Industry did to position Japanese exports to the rest of the world.
Plan. Prepare. Participate. Let’s play in the AfCFTA market.
