• Thursday, March 28, 2024
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BusinessDay

Nigeria & AfCFTA: Rhetoric & reality

NBA seeks involvement in AFCFTA negotiations, determination of CCT status | Buhari signing electoral act

With the delay and eventual signing of AfCFTA by President Buhari, it now seems that Africa is on the road to El Dorado with big brother Nigeria on the cruise.  After drafting the agreement in March 2018, Nigeria delayed signing for over a year to ensure we get it right through proper and wide consultation. As commendable as the delay was and as beneficial as the agreement can be to Nigeria, the key question is if we are ready as a country to lead and benefit from AfCFTA. While the execution will start in 2020, there are no convincing signs internally and externally that we are willing and ready to lead or even benefit from the agreement. As the biggest trading bloc in the world with over 54 countries on board, there are certain strategic moves that are required to show seriousness and commitment to lead and benefit.

On the external front, two recent developments stand out. With the signing of the agreement by 54 African countries (remaining only Eritrea), African leaders voted to have Ghana as the headquarters of the forthcoming Africa free Trade Zone. Interestingly, with the free trade zone headquarters comes the African aviation hub to be built in Ghana also in addition to further developments of the sea ports. Even without much details, the immense benefits of Ghana’s strategic move and positioning can only be imagined.  Think of the job creation, inflows of both foreign direct/portfolio investments, access to international finance and capital market development, manufacturing hubs and spill over products and services that will follow.

As Nigeria fully and significantly participated in all discussions leading to the drafting, signing and expected execution of the AfCFTA, the question is whether we forgot or are ignorant of the benefits of having the headquarters of the free trade zone and the Africa aviation hub in Nigeria. We are talking of the biggest economy and most populous nation in Africa with the best air navigation location abdicating very low hanging benefits to Ghana, a country of about 30 million people.  Will United States of America, Germany, United Kingdom, India, China, Brazil behave like Nigeria given the same situation? To rub salt to injury, a Ghanaian friend called me last week to enquire if I was following AfCFTA developments to which I answered in affirmative. He then said that he just wanted to briefly greet his good friend from ‘Giant of Africa’.

As we have lost to Ghana on the above very important aspects of the trade deal and as execution will start in 2020 according to AfCFTA timetable, a further question  is how internally prepared we are as a country to really benefit from the implementation. With Intra-African trade still significantly low at about 15% and our 200 million people population a significant target to both manufacturing and service firms, how can we ensure that other areas requiring further negotiations such as the rules of origin and non-tariff barriers are negotiated in our favor to ensure that we take our preeminence position in the deal? Achieving the above goes beyond talk and documentation. It will require deliberate, genuine and committed industrialization approach with a nationalistic and patriotic disposition. We to have ask serious and sincere questions on what happened to firms like Peugeot Assembly Plant and Defence Industries Corporation and other important industries in Kaduna  and Kano, Michelin, Beta Glass and others in Trans Amadi, Rivers state. Even with Lagos as the commercial capital of Nigeria, what happened to Dunlop, AG Leventis and many others that have closed down? It is the same story in Enugu, Aba, Ibadan, Ilorin, Jos and across Nigeria.  As at 1979 we had over 40 firms owned or partially owned by either federal or state governments that are moribund or non-existent as at today. They include Anambra Motor Manufacturing Company (ANAMCO) and Nkalagu Cement Company, Steyr Nigeria Ltd, New Nigeria Salt Company, Delta Steel, Nigerian National Shrimp Co, Serwood Industries and Opobo Boat Yards. Others include Savana Sugar, Aba Textile mills, Electricity Meters Company, Super-Phosphate Fertilizer co., National Truces Manufacturing co., Ajaokuta Steel co. ltd, Nigeria Sugar Company, Lafiagi Sugar company, Nigeria Yeast and Alchohol Manufacturing Ltd, West African Distillers, Nigeria-Romania Wood Industries, Leyland Nigeria ltd and Volkswagen of Nigeria ltd. 

If all these and many more companies have failed without AfCFTA, what will happen to the other few remaining companies with implementation of AfCFTA. As it primarily implies free movement of goods, services and people within the common trade area (Africa), how will the few remaining companies in Nigeria survive and compete when we do not seem to have properly learnt or done anything significantly different from the situation and conditions that contributed to the failures of many companies in Nigeria. In infrastructure, monetary, fiscal and supply-side policies, nothing has significantly changed. In some cases, it is even worse with  the terrible state of electricity provision and sea port services clear examples. How will Nigerian firms compete when it is cheaper to import a container from China to Lagos than to move the container from Apapa to Agbara all in Lagos. It will be interesting to see how we will benefit from AfCFTA when policies are formulated and executed from political, tribal and ethnic sentiments rather than from a nationalistic and patriotic disposition. Unless a miracle happens, it will be almost impossible to benefit from the agreement with only two main functional sea ports and about three or four international airports.  How can we produce when electricity production is still below 5, 000 MW for about 200 million people. While it is good to sign AfCFTA, we must appreciate that to effectively participate, lead and benefit from it requires more than talks and documentation. It starts with a determined and patriotic formulation and execution of a detailed and well integrated economic development plan through which we can appropriately participate, lead and benefit. Unfortunately, we don’t have such long awaited plan!

 

Franklin Ngwu