• Thursday, March 28, 2024
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MAN fears AfCFTA benefits may elude Nigeria as challenges intensify

How AfCFTA can strengthen regional value chains and SMEs growth

The Manufacturers Association of Nigeria (MAN) has expressed concerns that the numerous benefits offered by the African Continental Free Trade Area (AfCFTA) may elude manufacturers in the country due to inherent challenges that have intensified overtime.

This was discussed at the 11th edition of the manufacturers business luncheon themed ‘improving Nigeria’s manufacturers competitiveness within the context of AfCTA’s implementation’ organized by MAN Apapa branch.

The United Nations Economic Commission for Africa (UNECA) projects that the trade agreement will provide a market of 1.2 billion people boost intra-African trade by between $50bn and $70bn in monetary terms, with a 40 percent to 50 percent increase over the first 20 years of its implementation.

At the forum, manufacturing stakeholders and experts agreed that the AfCFTA holds numerous opportunities for manufacturers and exporters, however the possibility of reaping its benefit is slim as the sector is yet to fully recover from numerous challenges aggravated by the COVID-19 pandemic and the Russia-Ukraine crisis.

Frank Onyebu, MAN chairman, Apapa branch said AFCFTA is designed to be a game changer for development ambitions in Africa, adding that every country that wants to participate in the agreement must be competitive and must create a deliberate economic policy towards sustaining industrial development.

“However considering the enormous challenges facing our country at this point in time, especially the high and rising cost of production, exploiting the opportunities presented by AFCFTA will be an uphill task,” he said.

Onyebu specifically highlighted the rising unsustainable energy cost, infrastructure deficit, widening supply gap, among other issues which waters down the competitiveness and profitability of manufacturers in Nigeria.

“These are challenging times for us with prices of input soaring higher on a daily basis while the current hike in diesel price calls for innovations in our production mode to enable us compete, presently the Amuwo Odofin and Apapa axis contends with poor infrastructure despite the huge businesses in the area coupled with the enormous presence of manufacturing activities,” he said.

He urged that the government across all levels must commit to creating a framework for deeper socioeconomic integration and improved cooperation that enables trade, investment and the mobility of people which will support the industrialization and development of a dynamic competitive manufacturing sector.

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“I believe a viable deliberate economic policy, which will necessarily include an improvement in the infrastructure will encourage manufacturers to seize the enormous opportunities that AfCFTA offers to the Nigerian economy, this would ultimately lead to a massive investment inflow into our economy and increase in our national assets,” he said.

Oluwasegun Osidipe, Director, Economic & Statistics Division, MAN said competitively, Nigeria is not fully ready for improved local, continental and global trade due to numerous familiar challenges confronting the private sector.

He however said Nigeria has a chance to excel under the agreement if the challenges are addressed and there is an enhanced relationship between the government and the private sector.

“Government needs to hasten the implementation of viable industrial, trade and investment policies and create a friendly operating environment which provides a comprehensive and integrated support system that will spur the flow of investment to the sector,” he said.

Osidipe said Nigeria has comparative advantages in mineral fuels, agricultural products, manufactured products and crude materials, while sectors like services, manufacturing, food products, transport equipment, and chemicals have significant value addition opportunities.

He said that MAN has advised manufacturers to adopt technology, deepen backward integration practices, exploit trade platforms, leverage regional networks, among other practices.