Nigeria, Africa’s largest economy, on Sunday signed the African Continental Free Trade Area (AfCTFA) agreement, a deal expected to improve intra-African trade, enhance economic growth and sustainable development.
Nigeria, together with Benin, signed the agreement on the margins of an extraordinary summit of the African Union (AU) in Niamey, the capital of Niger, where the operational instruments of the agreement establishing AfCFTA were launched.
Ahead of the summit, the Nigerian government had embarked on extensive consultations with stakeholders, culminating in the submission of the report by a Minister of Magic committee to assess the impact and readiness of Nigeria to join the AfCFTA.
The AfCFTA treaty, one of the flagship projects of the AU Agenda 2063, is aimed at creating a single continental market for goods and services, with free movement of business people and investment.
Read:Boko Haram kills at least five soldiers in northeast Nigeria
Poised to be the world’s largest free trade zone, the 55-member AU initiated the move in March 2018, with 44 countries signing onto the deal earlier. Nigeria, the largest African economy, was not among them.
Officials said they needed more time to consult with stakeholders such as the Nigerian Labor Congress, the Manufacturers Association of Nigeria and other players in the private sector.
Another reason stated was the concern over unfair trade practices, such as dumping, which could be occasioned by a later decision to lower the sales of the country’s exports below the cost of production.
This, some local analysts said, might cause Nigeria to gain unfair market share after signing the deal.
More analysts, however, said the country stood to gain more by signing the treaty as its presence would bolster trade in the region.
Nigeria’s significance in Intra-African Trade
In June, the Egyptian ambassador-designate to Nigeria, Assem Hanafi, expressed concern over the low trade volume between his country and Nigeria, stressing the need to aggressively improve the situation.
“My target is to see ways and means to boost trade and investment between Nigeria and Egypt, the two biggest countries in Africa with huge potentials and population,” the diplomat said, noting the volume of trade between Nigeria and Egypt was “not very big and this is another sad story of intra-African trade relations”.
Intra-African trade only constitutes 15 percent of the overall African external trade, according to Nigerian government data.
Most African countries don’t trade among themselves, said Sheriff Ghali Ibrahim, a political science and international relations lecturer at the University of Abuja.
Read:Tuface warns Nigerians to be vigilant and stay away from scammers
Nigeria, as the continent’s most populous nation and largest economy, has an important role to play as the “engine room” of the intra-Africa trade, Ibrahim told Xinhua.
“For Nigeria, agreeing to sign this agreement will be of great benefit to all Africans,” he said. “I see it as an opportunity for all Africans to be well integrated politically and economically.”
With the elimination of trade barriers under this treaty, Ibrahim said, Nigeria will have the opportunity to harness most of its own resources that might be needed in some other African countries.
In 2017, export to other African countries accounted for 12 percent of Nigeria’s total export and only 4 percent of its import came from other African countries, according to Nigerian government data.
Nigeria mainly exports petroleum to other African countries. South Africa has been Nigeria’s largest trade partner in Africa, both in import and export.
The country mainly imports polymers, fertilizers, prepared binders, and frozen fish from other African countries that are not members of the Economic Community Of West African States, of which Nigeria is the powerhouse. These products are subject to import duties.
With the removal of trade barriers through this treaty, Nigeria stands to gain a lot from new markets for its products, Ibrahim noted.
“Apart from these, we (in Nigeria) also have the fashion industry which is booming,” he said.
“Nigeria can move that into other parts of Africa. There is going to be a kind of cultural exchange with the industry taking off.”
“We are going to have more trade fairs among African countries. The Nigerian movie industry will also have that boost because we will be able to freely sell our movies across Africa without barrier.
“With this agreement, it will boost the economy of Nigeria and other producers in Africa,” Ibrahim said.
Afcfta will not expose Nigeria to economic hazards
Adetokunbo Kayode, a former Nigerian minister and current president of the Abuja Chamber of Commerce and Industry, said the free trade agreement would not expose Nigeria to economic hazards.
Nigeria has nothing to fear about after signing the treaty, as the agreement has adequate and all the necessary safeguards against smuggling, dumping and other risks or threats to the internal development of individual countries in the region, he said.
Read:Nigerian senator pleads for forgiveness over sex shop fight
“The issues raised by the (Nigerian) government that AfCFTA will not help the country because of infrastructure, fear of being an avenue for the dumping of goods and leading to the death of local industries did not add up,” Kayode said, expressing optimism that these challenges could be easily surmounted if the country put its acts together.
“There are several instruments of negotiations in the agreement, so we have to move along with the rest of the world,” he said.
The AfCFTA will, however, tremendously expose the Nigerian people to opportunities and lead to the expansion of their businesses, Kayode said.
The AfCTFA agreement, as the leader of the organized private sector in Nigeria observed, covers trade in goods, services, investment, and rules and procedures on dispute settlement.
The treaty also has a range of provisions to facilitate trade, reduce transaction costs, provide exceptions, flexibilities, and safeguards for vulnerable groups and countries in challenging circumstances, he said.
Ibrahim, the University of Abuja lecturer, said the only challenge that Nigeria might face at the initial stage after signing the AfCTFA agreement might be the issue of spending a lot and not making so much in return.
“Apart from this, there is the issue of migration,” he said.
As far as the AfCTFA is concerned, Nigeria should always be optimistic that it stands to gain more and lose less, Ibrahim added.
The instruments, launched at the AU summit where Nigeria signed the trade treaty, included AfCFTA rules of origin, tariff concession portals, portal on monitoring and elimination of non-tariff barriers, digital payments and clearing systems, and the African trade and observatory dashboard.
Source:Â Ghananewsagency.org