As Africa targets spending power as high as $6.7 trillion by the year 2030, top business magnates have warned that governments alone must not be left to continue the series of negotiations needed to fine-tune the African Continental Free Trade Agreement (AfCFTA).
A top leader in the Manufacturers Association of Nigeria (MAN) has thus declared in Port Harcourt, Rivers State, that business must be part of further negotiations because the impact of the continental agreement is huge.
The Opobo-born senator and now manufacturer, Adawari Michael Pepple, made the declaration on Wednesday, October 23, 2019, at the first ‘CEOs Business Luncheon’ organised by Rivers/Bayelsa chapter of MAN where he encouraged business associations to monitor and participate in the negotiations to help formulate agreements that will improve the regional business and trading environment.
He said business people must be strategic in their engagements in the new market era.
“We are very happy that the Federal Government had commissioned a study as advised by MAN to look at the impact of the signing of the AfCFTA before signing. The President of MAN also commissioned a study which has given our Association better understanding on the way forward irrespective of the ratification and signing of the AfCFTA by the President of Nigeria in Niamey,” he said.
Pepple told the gathering of CEOs at Oak Heaven Hotel that this new market drive (AfCFTA) will have great impact on the way business owners do business going forward and that there is an urgent need to start positioning for a better opportunity rather than wish that the AfCFTA protocol was never signed. “As we all know, it has been signed and it is here to stay,” he said.
According to him, “As a leading Branch in the region, we are poised to see businesses in the region grow. We have improved partnership with government regulatory agencies and the vision is to see how to help businesses meet required criteria and grow the business to greater heights which is why we have organised this luncheon.”
He said his leadership, though just in its second year in office, thought it wise to bring CEOs and business leaders across the various sectors to discuss the emerging trend in the global business space; particularly the African market as a result of the AfCFTA.
“The theme of our 1st CEO Business Luncheon is ‘Current Realities in the African Common Market (AfCFTA): The Role of Nigeria Customs Service and Other Business Support Organisations’. This was necessitated by the fact that manufacturing continues to be the key driver of rapid economic growth and the associated creation of employment, both directly and indirectly. There is considerable accumulated evidence that manufacturing still functions as the heart of the economic development process. By the foregoing, it becomes imperative for us to partner with other sectors to face the current realities of the African market in line with AfCFTA. It is also imperative to note that we cannot exist as manufacturers without the ports, cargo handlers, shippers, insurance, financial institutions, accountants, etc and very essentially, the Nigeria Customs Service,” he explained.
According to him, “The African Continental Free Trade Agreement officially came into force from July 7, 2019. And according to a recent Brookings Africa Growth Initiative policy brief, under a successfully implemented AfCFTA, Africa will have a combined consumer and business spending of $6.7 trillion in 2030. Indeed, Africa is home to the world’s largest free trade area since the establishment of the World Trade Organisation, with nearly every country on the continent joining. This agreement and new free trade area are undeniably important achievements for the region’s economic development. In this light, the AfCFTA is critical because it could boost intra-Africa trade by 15 to 25 percent by 2040. This increased market access to other African countries like Nigeria has positive spillovers too, including improving the competitiveness of industries and enterprises, increasing opportunities for economies of scale improvements, and boosting the efficacy of resource allocation. May I use this opportunity to state here that though all the protocols have not been signed, we need to start positioning our businesses to take advantage of the opportunities that this free trade area provides.”
Quoting Aracha Gonzalez, executive director of the International Trade Centre, the MAN boss said the projected benefits of the agreement are significant. “With expectations of a virtuous cycle of increasing intra-African trade and international investment, the AfCFTA has the potential to make a concrete impact on the lives of ordinary citizens across the continent. By facilitating job creation and greater competitiveness of African micro, small and medium-sized enterprises (MSMEs), the AfCFTA will be a crucial ingredient in lifting people out of poverty and invigorating Africa’s growth trajectory. These objectives are to be achieved through successive rounds of negotiations that progressively eliminate tariffs and non-tariff barriers to trade in goods and liberalise trade in services.
“The African business community is a key beneficiary of the agreement. Potential advantages to the private sector include increasing economies of scale and access to cheaper raw materials and intermediate inputs; better conditions for regional value chains and integration into global value chains; catalysing the transformation of African economies towards greater utilisation of technology and knowledge; facilitating both intra-African and external direct capital flows to African countries, and creating a labour market and a demand pull throughout the continent.
“To ensure that the private sector can benefit from the African Free Trade Area, it is important that business understands what the AfCFTA and future negotiations will cover. Business should ensure its voice is heard as governments craft and operationalise the agreement. In order to do that, they need to be fully aware of the issues, potential benefits and opportunities and, most importantly, the role they can play,” he said.
“With this objective, this guide sets out the context and the guiding principles behind the agreement and analyses its provisions. It compares them to existing multilateral and regional trade agreements to identify potential synergies, issues, opportunities and benefits for African business, particularly MSMEs. It also explains the ongoing negotiations and indicates the road ahead for future negotiations in realizing the objectives of the AfCFTA,” he further said.
This knowledge will enable business to engage effectively in advocacy and public-private dialogue mechanisms to support the negotiations and subsequent implementation of AfCFTA.”
He said part of MAN’s efforts in preparing for the new African market is to make Port Harcourt a preferred manufacturing hub, and that this would hardly be done without bringing together the various sectors and the regulatory agencies to be on same page. He pointed out the ports and the major port services terminal operators in Port Harcourt (PTOL) as key in the new partnership.
Ignatius Chukwu
