Legal, economic and financial experts at the Africa Trade Roadshow organised by global law firms, Baker McKenzie and Templars in Lagos on Tuesday, have said that Nigeria must begin to think of innovative ways to cushion the consequences of a late ratification of the Africa Continental Free Trade Agreement (AfCFTA) if and when it is indeed ratified and domesticated.
Speaking about global geopolitical concerns such as trade wars, Brexit, China’s BRI; the influence of U.S and China on Africa; impact of the coronavirus on the Chinese economy and trade, escalation of global trade tensions, amongst other things, at the event, Herman Warren, director, Africa Corporate Network, of The Economist, highlighted the importance of forming alliances towards achieving global economic goals,
“The US-China trade war/conflict is in fact, not a trade battle but one for dominance, while on the other hand, Putin, continues to work hard to establish Russia’s dominance on the global stage.” he said, noting President Trump’s role in heightening anxiety rather than calm in the mix of things.
Making a case for Climate Change, Warren established its essence to economic growth globally, adding that globally, people have also become more protective of their local environment.
He further cited the more stringent EU data privacy rules, stating that there will be more to come in the nearest future.
The panel session at the event provided a global perspective on the Africa Continental Free Trade Area (AFCFTA) in relation to Nigeria, while touching on global and local legal/regulatory hurdles including sanctions, export controls, customs and excise, etc.
Speaking about the effects and outcome of AFCTFA, Virusha Subban, Partner and Head of Indirect Tax Baker Mckenzie, Johannesburg, announced that its implementation is bound to come with consequences.
“It is an inevitable outcome and the smaller businesses would have to bear the brunt of this consequence.” she said “but we should be looking more at the long term benefits that the treaty would provide.”
She thus suggested that the most reasonable response would be to form trade unions as the government would be more likely to listen to unionised concerns as opposed to a solitary voice.
However, in proffering solutions, Kerry Contini, a partner in Baker McKenzie’s International Trade Practice Group, Washington DC, adviced that there was need for companies and businesses with trade deals with the United States, working with their lawyers to prepare and gain more knowledge for risk management.
A partner at Templars corporate and commercial practice group who also a panellist, Ijeoma Uju held the opinion that infrastructure will be a big barrier for Nigeria if it hopes to play big under the AfCFTA.
According to her, the Africa Free Trade Area Agreement (AfCFTA) is an ambitious treaty and Nigeria must begin to match the ambitions of AfCFTA with reality.
“With the infrastructure deficit in the country, what is our competitive advantage?” she asked. “If we ratify and domesticate the treaty without preparation and readiness, the unemployment we speak of today, will only get deeper. We have to be ready with our transport sector. We have to be ready with manufacturing, electricity etc. Our industries must be positioned to compete favourably,” Uju said.
Professor Jonathan Aremu of International Economic Relations at Covenant University, offered no succour either when he declared that the AFCFTA would not succeed without mutual agreements amongst the parties.
“As we move to phase two, there must be a good understanding of trade in services amongst all parties, as this phase will require a lot of legal work, such as intellectual property issues, issues of completion law, investments amongst others.
On the other hand, Jesuseun Fatoyinbo, Head of Trade at Stanbic IBTC Plc., who took a more positive stance stated that the benefits of the trade agreement would see things such as infrastructure fall into place.
According to him, one of the key benefits for Africa is that the continent would become more attractive to foreign investors due to the ability to expand the business to other parts of Africa with significantly reduced resistance.
Fatoyinbo disclosed that the AfCFTA is a great opportunity for Africans and Nigerians to realise their potential, while attracting good investments; noting that significant trade will be driven by competition and documentary tools such as risk mitigation tools, financial advisory services etc.
“AfCFTA as an idea has come at the right time and financial advisory services will become key component of the treaty, “ he said.
The Baker McKenzie and Templars roadshow was aimed at giving a macroeconomic overview of cross regional trade for Africa and to discuss issues affecting trade across Africa, with particular reference to the Africa continental free trade area.