Signatures from Botswana, Zambia and Guinea Bissau have raised to 52 the number of countries that have approved the African Continental Free Trade Area (AfCFTA) during the recent 32nd AU Heads of State and Government Summit in Addis Ababa, Ethiopia.
Nigeria, African biggest economy, is among the remaining three countries that are yet to sign the trade agreement.
Ayo Akinwunmi, head of research, FSDH Merchant Bank, said the country was a bit slow in terms of having not read the agreement now.
“It is better for us to be slow and get it right than to rush into it,” Akinwunmi said, noting that we could still take the fast lane and get it right.
According to Chiedu Osakwue, chief trade negotiator and director-general, Nigerian Office of Trade Negotiation, Nigeria is yet to sign the agreement because of the need to create a competitive market.
“Where we are as a government of the country in the Africa free trade negotiation is that we are creating an elaborate process of improving the country’s preparedness,” Osakwue said at BusinessDay’s annual CEO forum held last year.
Osakwue also said the government was working on the competitiveness programme by updating the schedule of tariff concessions for traded goods, not only for the AfCFTA but also, the transition period for the common external tariff of the Economic Community of West African States ECOWAS that would come to an end next year.
Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers, fears that if Nigeria signs the trade agreement, the country may not have the capacity to export due to its weak production capacity.
“We are losing a potentially large market that is free barriers to trade e.g. traffic if we don’t sign. But my concern is what Nigeria has to offer in terms of domestic production, it is still far below consumption,” Ologunro said.
According to Ologunro, there was not enough justification to back the reason why Nigeria should agree to a 90 percent market access.
Albert Muchanga, the AU Commissioner for Trade and Industry, said he expected AfCFTA to formally launch operations in July this year.
“By March 21, 2019, the first anniversary of the launch of the AfCFTA, we expect we will fill the quota of 21 member states needed for the free trade agreement to come into force,” Muchanga said.
“With the expected start of operations of AfCFTA in July, the AU expects member states to start to liberalize trade relations with each other, reduce trade tariff among African countries and come up with mechanism to monitor the application of non-tariff barriers by some member states,” he further said.
The trade agreement seeks to remove tariffs on 90 percent of the goods traded between the signatories to the agreement, and gradually eliminate other non-tariff barriers to trade in goods and services.
According to, David Luke, Coordinator of the Africa Trade Policy Centre (ATPC), it is a tool that countries can use to create opportunities for African businesses and through them drive the continent’s industrialisation, economic diversification and development.
It also helps promote the type of trade that produces sustainable growth, creates jobs for Africa’s youth, and establishes opportunities for nurturing Africa’s businesses and entrepreneurs.