Punch | 14 August 2018
Should Buhari sign the African Continental Free Trade deal?
- Mr. Olalekan Ayodimeji (Vice President, Kwara Chamber of Commerce, Industry, Mines and Agriculture)
Yes, President Muhammadu Buhari should sign the African Continental Free Trade Agreement. There is no doubt that the AfCFTA, otherwise called ‘The Kigali Declaration,’ is good for Africa and indeed Nigeria as it will give rise to one of, if not, the world’s largest free trade area given the population of the continent and her business activities. AfCFTA is a trade agreement aimed at creating a single market to ensure a free movement of goods and services among African Union member states. However, for Nigeria the issues have always been the various previous bi-lateral trade agreements of the other African countries, the state of our industrial and infrastructural development and import tariff, among others. The above issues are germane as they have the potential of making Nigeria a dumping ground due to our non-competitive manufacturing activities, our market size and our population. There is therefore the need to develop our export market which is presently comatose. We do not have specialty in any exportable product. Importantly, there is also the need to carry along all stakeholders – the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture; Manufacturers Association of Nigeria and the Nigerian Association of Small and Medium Enterprises, among others. Having recognised these challenges, Nigeria should set up a committee that will fashion out ways to tap into the advantages inherent in what is going to be the world’s largest free trade area. I will therefore advise President Buhari to sign the AfCFTA and let Nigeria take the lead in the various discussions and processes leading to the formulation of modalities for the implementation of the agreement. The Nigerian negotiation team should be guided by our own peculiar situation. Already, 44 out of 55 member states of the African Union have signed the agreement and only 22 countries are required to make it effectual. Thus, delaying the signing may in future make us operate from ‘outside the box. If Nigeria signs, it gives us the opportunity of being part of the decision-making process. It is better that we operate from ‘within the box’ as there is enormous potential in the AfCFTA that can be of immense benefit to us. This is also the time for all stakeholders to come together with a common front to assist the negotiation team in piloting the country’s position to convince other AU member states.
- Dr Chijioke Ekechukwu (Economist )
The African Continental Free Trade Agreement is aimed at creating a single continental market for goods and services. It also will enhance free movement of business persons, investments and investors. It is also aimed at expanding intra-African trade through trade liberalisation policies. It removes business and import restrictions within the continent. My opinion is that as far as Nigeria is a net importing country of goods and services; as far as we are not technologically advanced; as far as we have a large population, as far as our cost of production remains high; Nigeria will be a dumping ground for goods and services. The ACFTA will benefit all the smaller countries in Africa looking for markets for their products. Companies from Europe, Asia and America will take advantage of this agreement to bring their production lines to neighbouring African countries with steady power supply and dump their products on Nigeria. It will undermine our emerging SMEs and exporters and indeed local manufacturers whose products will compete unfavourably with the imported ones under the canopy of ACFTA. However, because of our economic size and population, it is likely to attract investors in many sectors of the economy.
- Adetokunbo Kayode, SAN, (President, Abuja Chamber of Commerce and Industry)
The Federal Government should sign African Continental Free Trade Agreement in order to enable Nigerians working in other African nations to repatriate their wealth to the country. We have nothing to lose by signing this all-important document. We only have a lot to gain. Nigerians are competitive and the Federal Government should add impetus to their drive by signing this agreement to enable them trade in goods, services and skills all over the continent. The world cannot wait for us. It is moving on and there is no need for the giant of Africa to be dragging its feet over signing this document, which has so much to offer the people by enhancing their socio-economic wellbeing. It is sad enough that other smaller African countries that are far less endowed with natural and human potential have strategically positioned themselves to benefit from the initiative. But I am optimistic that we will sign it in the end. In any case, it is always better to negotiate from within than to remain on the sideline.
- Bisi Sanda (Economist/former Senior Partner, Ernst and Young)
We must be sincere with ourselves; trade agreements have a lot of technicalities around them. One thing for sure is that even at the level of the West African states, there is this allegiance by African states to some superpowers. For instance, Francophone states in West Africa serve as trans-shipment for manufacturers from France to dump goods in their countries which then find their way into Nigeria through these trade deals. This will make nonsense of our own industrial policies. There is no much going on in Africa in terms of manufacturing. We are only out for self-deception. African states are still basic commodity exporters. Whatever minerals or resources we have are sold at their basic form without any value or production activity. The Nigerian economy, most unfortunately, is not ripe for all these trade deals. The economy has suffered a lot of reverses from 1986 till date. We had the Structural Adjustment Programme introduced in the September of that year, which made our economy to lose its structure. In analysis, you could talk about 17 sectors of the economy where Nigeria was actively present before 1986. Our economy was represented in many modern economic structures. But since then, what happened is that we have exited most of the sectors and we are not adding value. For example, look at the tyre industry; at that time, three big tyre companies were manufacturing tyres in Nigeria. Today, they are importing the tyres. You can see this trend of excessive importation in other sectors of the economy too. So, today we are not structurally strong to participate in any regional or continental trade agreements. Our industrial base is very weak. If we don’t build our industries, the inevitable side effect is for our country to become a dumping ground for all manner of products from other African states. The federal and state governments must ensure that rapid industrialisation is paramount so that we can exit our economic misery.
- Odilim Enwagbara (Developmental Economist)
The government should not sign the agreement because as a country we are not competing efficiently. And so signing an agreement will open our economy to all sorts of things. Nigeria is a large economy and it has always been a great economy without having to sign economic partnership with any country. The only time we can sign an economic partnership with anybody is when we know that if we do so it is to our benefit. We signed the World Trade Organisation partnership in 1995 and China did not sign it until 2000 and so Russia did not sign it too until early 2000. So we have to make sure our house is in order before we sign any economic partnership. We have an infrastructure deficit and our economy is having difficulties competing because we only produce raw materials and we don’t add value to our petroleum products. So I completely agree with Mr President because if we open our borders to them under the ACFTA, it will affect our industries.
- Dr Sam Nzekwe, (A former president, Association of National Accountants of Nigeria)
My worry about this is that we know that many Nigerian goods are not traded outside this country and that the manufacturing industry in Nigeria is not conducive to growth. So what this means is that if he (Buhari) signs the deal, what is going to happen is that our borders will be so open and goods within the African region will be coming in unhindered. And because of the harsh operating environment for manufacturers in Nigeria, you are going to discover that goods produced in smaller African countries will be cheaper than our own and as such these products will beat the locally-manufactured ones when it comes to competing in the market. Hence, what will happen is that you will see a situation where we are going to stop buying our own goods and start buying the imported alternatives. Mind you, the business environment in some of these African countries is better than ours and so their goods stand the chance of being cheap. Now if these goods flood our markets, then you have succeeded in killing the manufacturing industry in Nigeria. So if you study the environment, you will realise that it is not yet okay and the next thing is to start getting people to come and invest here to help improve the economy. Therefore I will say that until we get things right, we should be cautious with some of these deals.