The uncompromising position of some stakeholders in the Nigerian economy on the African Continental Free Trade Area (AfCFTA) agreement may be the reason the Presidency is yet to take a decision on the issue even after consultations with the stakeholders, findings by THISDAY have shown.
Whereas a section of the country’s organised private sector (OPS) is opposed to Nigeria signing the treaty until some conditions are fulfilled, others have urged the federal government to go ahead and sign the agreement, arguing that it harmonises with the economic interest of the country.
The AfCFTA was designed to create one of the largest free trade areas in the world by introducing a single continental market for goods and services as well as a customs union with free movement of capital and business travelers within the continent of Africa.
Analysts believe that this agreement would potentially give birth to the world’s largest free trade area since the World Trade Organisation (WTO) which was formed in 1995, in terms of the number of countries, covering more than 1.2 billion people and about $4 trillion in combined consumer and business spending if all 55 countries in Africa join the agreement.
The African Union agreed in January 2012 to develop the AfCFTA and it took eight rounds of negotiations, beginning in 2015 and lasting until December 2017, to reach agreement. Nigeria played a leading role from start to the end of the Negotiation.
But AfCFTA has generated diverse reactions from the Nigerian organised private sector (OPS) and the labour unions, since March 22, 2018, when the historic agreement was signed by 44 African countries in Rwandan capital, Kigali.
Nigeria and South Africa, the largest two economies in Africa have yet to sign the trade agreement as the two countries believe that the economic and security implications of signing the deal must be further discussed by widening consultations among key domestic players.
The main contention for Nigeria’s declining the signing of the AfCFTA Treaty is stakeholders’ fear of numerous bilateral trade agreements of some African Union (AU) countries with the rest of the world and Nigeria’s underdeveloped industrial and infrastructural profile, which some stakeholders argued that “this Agreement will potentially make Nigeria a dumping ground due to our uncompetitive manufacturing sector, large market size and population.”
Following a false start on the consultation process of the trade agreement, therefore, Nigeria’s involvement in AfCFTA was temporarily set aside to enable broader consultation with relevant stakeholders of the nation’s economy as efforts are ongoing to engage stakeholders in a consistent and iterative manner to enable informed decision prior to the expiration of the 6-month probationary window for reentry to the agreement.
The National President of the Nigerian Labour Congress (NLC), Mr. Ayuba Wabba said the organised labour is opposed to AfCFTA and does not want Nigeria to sign the agreement.
But, the National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Mrs. Alaba Lawson stated that: “NACCIMA has always supported and we are still in support of Nigeria signing the AfCFTA designed essentially to establish a single Market for Trade in Goods and Services in Africa and improve intra African Trade.”
NACCIMA said by signing the agreement, Nigeria stands to benefit in terms of increase sources of raw materials from the African continent, provide larger market for Nigerian goods and services, increased employment for Nigerian youth (who are able to provide cross-border services especially in technology) and increased market share for the Nigerian financial services sector (who are currently dominating the West African market).
“We played a leading role in the evolution of the AFCTFA which is rooted in the Abuja Treaty which was adopted on 3rd June 1991 in Abuja and came into force in 1994 and established the African Economic Community.
“Nigeria was also the Chair of the Negotiating body. We stand to benefit a lot by being part of the AFCFTA. All we need to do is put our house in order. We must not at this stage by act of Commission or Omission be left out of the Agreement.
“We are the largest economy in Africa. Negotiations are already reaching critical stages and we must quickly come on Board. We must position ourselves to seize the opportunities offer by the AfCFTA. We must not shoot ourselves in the foot on the issue,” NACCIMA said in a statement by Mrs. Lawson.
The Director General of the Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, who spoke to THISDAY in a telephone interview, said that the association has not shifted from its position on AFCFTA, which is that certain conditions have to be met before Nigeria can sign the treaty.
“Our concerns were principally the inadequacy of private sector stakeholders’ consultations and absence of a credible country-specific study that should form the basis for our negotiation as a country.
“We express worry over the haste in the signing of the agreement upfront without a clue as to what its major and defining components would be or portends for our country, that is, the potential impact of the agreement on the Nigerian economy.”