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.
According to research by the African Development Bank in 2014, only 16% of international trade by African countries takes place between African countries.
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 says that the African Continental Free Trade Area which took-off on January 1, 2021 will create the world’s largest free trade area. It promises to change the previous narrative of Africa’s disdain for intra-nations trading.
The AU therefore estimates that implementing AfCFTA will lead to around a 60% boost in intra-African trade by 2022.
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 several months of hesitation, the then-President Muhammadu Buhari eventually signed the landmark agreement at the African Union (AU) summit in Niger in July 2019.
Many 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.
Almost four years after signing the treaty, the Federal Government is still urging 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). Apart from the appeal, there is really nothing significant confirming the nation’s readiness.
Yes, there is in place, a National Action Committee on implementation of the agreement in Nigeria. The committee has however been very ineffective in galvanizing Nigeria’s participation in AfCFTA.
We take very serious note of what the immediate past 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.
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.”
Nigeria’s current rating among AfCFTA nations does not justify the minister’s assurances. We have remained an on-looker despite several assurances.
It is instructive that while Nigeria is still foot-dragging, some countries are already trading on the continental platform.
As of February 2022, eight countries representing the five regions of the continent, namely: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia have participated in the AfCFTA’s Guided Trade Initiative (GTI), which seeks to facilitate trade among interested AfCFTA state parties that have met the minimum
Scoring a first, a Kenyan company has exported Kenyan-made exide batteries to Ghana through the Port of Tema in Ghana as afar back as 23rd of 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 officials of Ministry of Industry, Trade and Investment, who only go to seminars and workshops on AfCFTA to reiterate Nigerian’s preparations for the continental trade.
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.
Failure to fully-understand the demands of AfCFTA, especially the basics for trading and instituting a directionless in-country committee to spearhead the process is the bane of Nigeria participation in AfCFTA.
We hold the NAC accountable for the fact 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.
The sad reality is that, Nigeria has not done one single trade, and the infrastructure to operationalize both the legal and market infrastructure is still not in place.
We call for a sack of the National Advisory Committee currently headed by My Olusegun Awolowo, who has shown no understanding of the mandate of the Committee. His predecessor foot-dragged while other African nations seized the opportunity, but the current headship of the Committee is not doing any better.