According to the General Agreement on Tariffs and Trade (GATT), a free-trade area is an agreement among a group of two or more customs territories in which the duties and other restrictive regulations of commerce are eliminated on key provisions of the treaty.
The African Continental Free Trade Area (AfCFTA) is expected to cover all 55 countries of over 1.2 billion people and a gross domestic product (GDP) in excess of USD 2.5 trillion. The scope of the Agreement covers trade in goods, services, investment, intellectual property rights and competition policy.
The African Union (AU) says that the African Continental Free Trade Area which took-off on January 1, 2021 will create the world’s largest free trade area.
The AU also estimates that implementing AfCFTA will lead to around a 60% boost in intra-African trade by 2022.
According to research by the African Development Bank in 2014, only 16% of international trade by African countries takes place between African countries.
The Treaty provides that a State Party (a member state that has ratified or acceded to the AfCFTA) shall accord to products imported from other State Parties, treatment no less favourable than that accorded to like domestic products of national origin, after the imported products have been cleared by customs. State Parties are to progressively eliminate import duties and charges. Special and differential treatment is allowed for State Parties at different levels of economic development.
And after months of hesitation leading to further consultations, President Muhammadu Buhari signed the landmark agreement at the African Union (AU) summit in Niger in July 2019.
Since the landmark signature, some stakeholders in Nigeria affirmed that the nation has a lot to gain from increasing access to its goods and services to a wider African market. But many of also feared increased regional integration would lead to unfair competition for jobs and the goods they produce.
With Nigeria signing-up, AfCFTA’s dream of increasing intra-Africa trade, which currently lags behind the volume of trade the continent does with Europe, is now one step closer.
Now that AfCFTA can offer access to the enormous Nigerian market, they are in a much stronger position to negotiate with regional bodies in other parts of the world.
Expectedly, the Federal Government has urged Nigerians, particularly industrialists, to take advantage of inherent opportunities to promote made-in-Nigeria goods under the regime of the African Continental Free Trade Area (AfCFTA).
There is in place, a National Action Committee on implementation of the agreement in Nigeria. The committee has been very ineffective in galvanizing Nigeria’s participation in AfCFTA.
He said: “The African Continental Free Trade Area Agreement will form a 3.4 trillion dollar economic bloc, which Nigeria cannot afford to be left out.
“We have worked tirelessly to ensure that Nigeria not only partake as a signatory in name, but become a major trade and economic power house, even more than we have been within the ECOWAS region.”
We take very serious note of what the Minister of Industry, Trade and Investment; Mr Adeniyi Adebayo said concerning the need for Nigeria to participate actively in the multi-trillion dollar AfCFTA market.
It is instructive that while Nigeria is still foot-dragging, some countries in West and Eastern Africa are already trading on the continental platform.
Despite several denials relevant Nigerian government officials that trading under AfCFTA have not started, it has now been confirmed that three African countries have actually commenced trading.
Scoring a first, a Kenyan company has exported Kenyan-made exide batteries to Ghana through the Port of Tema in Ghana on 23rd September, 2022.
To further buttress the fact that she has also kicked-off trading, Rwanda has also confirmed that she exported the first consignment of goods under AfCFTA to Ghana on 30th September, 2022.
The first consignment of coffee from Igire Coffee Limited was flown to Accra by the national carrier, RwandAir, marking the formal start of preferential trading under the AfCFTA agreement by the East African country.
We take note of the reaction of the President, Manufacturers Association of Nigeria (MAN), Engr Mansour Ahmed, while reacting to the above. He said that on Nigeria’s part, processes are still ongoing in terms of finalizing the procedures on various frameworks and guidelines that will facilitate her entrance into the continent-wide trade platform. This is quite unfortunate.
Our worries become more compounded when the CEO of Centre for the Promotion of Private Enterprise (CPPE); Dr Muda Yusuf told us that, Nigerian stakeholders, especially business people are still not adequately informed about the protocols and what goods they can export with free duty to our African countries.
This is a calamitous confirmation that the National Action Committee on implementation of the agreement in Nigeria has failed on its mandate and should be disbanded.
The same goes for the Minister of Industry, Trade and Investment; Mr Adeniyi Adebayo, who only goes to seminars and workshops on AfCFTA to reiterate Nigerian’s preparations for the continental trade.
Equally disheartening is the reaction of the Comptroller in charge of Trade and Tariff, Nigeria Customs Service; Comptroller Anthony Ayalogu, when he was confronted with the facts about Nigeria’s failure and apparent unwillingness to play in the first league.
He admitted brazenly that: “Nigeria is not among them because we are not ready”. He thereafter gave some funny excuses about the initial eight countries that were selected to flag-off the continental trading process and the three countries that have started and lately, Cameroun that has joined.
Read Also: Why do you think Nigeria is foot-dragging in the AfCFTA?
His excuse: “We (Nigeria) were not selected among regional economic community not because we are not ready but because we did not fit in the criteria”.
We ask this question- What do these countries: Rwanda, Cameroun, Egypt, Ghana, Kenya, Mauritius and Tanzania and others that have been selected to start trading under the continental trade framework have that Nigeria does not have?
Perhaps, the answer is that, these countries are well-prepared in terms of in-country policies, they have a well-structured trading system, they have a more functional Customs Service, and Nigeria does not have.
In addition, the seven countries that were selected from the 36 that had expressed interest in trading under the pilot phase. Each of the applicants had submitted its tariff schedule. There is even no record that Nigeria was among the 36 nations that applied as pioneer traders.
Failure to fully understand the demands of AfCFTA, especially the basics for trading under the continental platform and instituting a directionless in-country committee to spearhead the process is the bane of Nigeria participation in AfCFTA.
It is without doubt that, Nigeria is missing on the list because of non-ratification of some of the six mandatory protocols that are needed for all participatory countries under the terms and conditions.
From all indications, Nigeria is yet to operationalize the AfCFTA in terms of giving value by trading under AfCFTA terms and conditions, we have not done one single trade, and the infrastructure to operationalize both the legal and market infrastructure is still not in place.
All said, the AfCFTA truly presents Nigeria with an exceptional lifeline to reboot her economy, by making use of the country’s 44 Free Trade Zone zones.
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