• Thursday, July 18, 2024
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African governments making AfCFTA survival difficult

Nigeria tops African CEOs’ export destinations – PAFTRAC Survey

African governments are making the survival of the African Continental Free Trade Area, a continent-wide trade pact, difficult through border restrictions, barriers to easy movement and inability to collaborate warns, UK-based think tank, the African Economic Summit Group.

The group had convened a multi-stakeholder summit last month in Lagos, which detailed observations by discussants about the unsavory state of business in Africa especially as it concerns poor synergy among African nations.

The group noted that Africa with 16 percent of the world’s population only does about 4 percent of trade among the 54 countries on the continent.

It noted also that African countries lack policies to collaborate among themselves in the development of their natural resources, prefer European and Asian products over theirs and do not even store their data at home.

“Trade policies in Africa are inconsistent and fluctuating thereby making trade in Africa unpredictable. This is why we are advocating for a new way of doing things,” said Brian Reuben, president of Africa Economic Summit Group in a media briefing on Tuesday, in Lagos.

The group observes too that African countries do not pay attention or respect trade conventions and treaties they are signatory to. Nigeria in August 2019 shut its borders for over a year.

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Therefore, the Africa Economic Summit Group has made wide-ranging recommendations it believes will quicken progress on the continent.

It called on African governments to collaborate to solve energy problems in the continent and commit to a transition to cleaner energy as well as deploying gas to solve present energy needs.

The group urged the African government to curb waste, provide an enabling environment for private enterprise to thrive, and local products should be sold in local currencies in Africa.

“Customs role should not be hinged on revenue generation but trade facilitation to encourage international trade. They can generate revenue in the process, rather than embarking on steps that would impede the trade they are meant to be facilitating while trying to meet revenue targets,” the group said.

African governments were also urged to digitalise regulatory agencies for ease of doing business, deepen property rights.

“Land for example (including the ones in the rural areas should go into the government balance sheet for easy access to credit by land owners,” the group recommended.

AESG called on African governments to revisit some restrictions they have in place at their borders as the AfCFTA will not thrive under such draconian policies.

The bulk of the recommendations are based on what African governments should do to improve trade but these governments have not demonstrated sufficient capacity or indicated enough awareness about the emerging world economy driven by private capital, technology and youth-led growth.

Reuben said the group was finding allies in government who are genuinely committed to developing their country among the lot. He noted that government officials including from the newly minted regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority participated at the event.

It remains to be seen how much of these recommendations would be heeded. Models aren’t in short supply in Africa, only the will to implement them.

African countries in the main are governed by old men whose best ideas weren’t even mainstream in the last century. Many are corrupt, incompetent and cavalier in their attitude to the private sector. Some like Nigeria are suspicious of private capital. These would need to change for AfCFTA to add value.