As some stakeholders continue to express their disappointment over Nigeria’s failure to sign the African Continental Free Trade Agreement (AfCFTA), the Manufacturers Association of Nigeria (MAN) and other industry players have reiterated their opposition to the plan for an African free trade area
According to MAN, saying such an arrangement should only be considered when the Federal Government has done more studies on its impact.
“When they open our borders for all manner of products to come into this country, most of our industries will be out of business,” Frank Jacobs, President of Manufacturers Association of Nigeria, told reporters in Lagos, the commercial capital, on Tuesday. “We will continue to oppose it until the right thing is done.”
Also speaking, Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry said for the fact that Nigeria’s manufacturing sector is very weak and the country does not have an export oriented manufacturing industry, it will be suicidal for the country to sign the agreement at this time.
“The manufacturing sector in Nigeria is focused more on the domestic market and once you take away this market, the sector will practically collapse because it cannot compete internationally. This is mainly because of the operating environmental challenges in Nigeria. So maybe the government realised this and decided to hold on in order to review the whole thing once again.
“There are attractions for a free trade zone but for a country with a large market like Nigeria, we must be very careful in signing such agreements. I believe the President took the right decision to allow for a proper study of the implications before making any commitment,” he said.
Yusuf pointed out that there are a lot of countries looking for ways to enter the Nigerian market and the country is not careful, such an agreement may open the back door for them to enter and reverse the little gains the country has made especially in the area of agriculture.
He noted that there were some proposed economic partnership agreements with some European or some Asian countries which Nigeria rejected. “If we enter a free trade agreement now, there is a possibility of us accepting what we have since rejected.”
According to Auwual Musa, Executive Director, Civil Society Legislative and Advocacy Centre; “we will need some time to build capacity and infrastructure before thinking of signing the regional trade bloc agreement. “f we open our market to the rest of Africa under this free trade arrangement, I don’t need to be an economist to know that it will be near impossible to keep unwanted foreign interests outside Africa from taking undue advantage of the agreement to our disadvantage. I think caution should continue to be our watchword.
“If the agreement is signed, other countries will bring in their goods and they will benefit immensely from that but Nigeria does not have many goods that can be exported to those African countries, so our local economy will not benefit. So, the refusal of the President to sign the agreement is good for our economy now.
“The efforts of the government to improve on our production capacity and to industrialise those objectives will be felt when those objectives are achieved but before then, it will be counterproductive to open up our market for other countries to bring their goods while we don’t have much to export,”
Dr. Chijioke Ekechukwu, a former Director-General, Abuja Chamber of Commerce said CFTA will benefit all the smaller countries in Africa looking for markets for their products. He added that 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 in Nigeria.
“It will demotivate our emerging small and medium enterprises; exporters and indeed local manufacturers whose products will be exposed to unfair competition with imported ones under the canopy of AfCFTA.
“However, because of our economic size and population, it is likely to attract investors to many sectors of the economy,” he stated that government should not sign the agreement because as a country, Nigeria is not competing efficiently. “And so signing the agreement will open our economy to all sorts of things.
“We signed the World Trade Organisation’s partnership in 1995 but China did not sign it until 2000 when they were ready to unleash their manufactured goods on the world, Russia signed it in early 2000.
“So, we have to make sure we put our house in order before we sign any economic partnership.
“We have infrastructure deficit and our real economy is having difficulties competing because we only produce raw materials and we don’t add value to our petroleum products,” he said.
“Nigeria is the largest market in ECOWAS and not only in ECOWAS, it is the largest market in the whole of Africa and everybody is looking for how to take advantage of this but our government must make sure that it doesn’t sign any agreement which will hinder our own capacity to develop,” he said.
It will be recalled that more than 40 nations signed the African Continental Free Trade Area agreement, or AfCFTA, in March, committing to removing tariffs on 90 per cent of goods. The aim is to boost commerce within a continent that currently has low levels of intra-regional trade and supplant a patchwork of existing agreements.
While Kenya and Ghana have ratified the deal, Africa’s two biggest economies — Nigeria and South Africa — have not. Some critics accused Nigerian President Muhammadu Buhari of bowing to pressure from labour unions concerned that more free trade would hurt local industries and cause jobless.
But amidst the fears and concerns expressed by some Nigerians, the Chief Executive Officer of Jumia Nigeria, Ms Juliet Anammah, has assured the Federal Government that, among other benefits, the trade pact will encourage partnerships among e-commerce firms within the continent, and impact the country’s growing economy significantly.
The scope of the pact covered agreements on trade in goods, services, investment, and rules and procedures on dispute settlement, including a range of provisions to facilitate trade, reduce transaction costs, provide exceptions, flexibilities and safeguards for vulnerable groups and countries in challenging circumstances.
Ms Annamah made the remark while fielding questions from journalists in Lagos on the implications of the Trade Agreement and the possible impact on e-commerce’s operations in Nigeria and Africa, wherein Jumia has established an unrivalled presence, and has earned the Alibaba or Amazon of Africa’s title.
According to her, a diligent review of the structural trade barriers, establishment of the right trade agreement, cross border and taxational cross border tariffs, will foster partnerships amongst e-commerce companies within and outside the continent.
“Signing the continental free trade agreement is good for the economy and the whole of Africa. But in terms of the actual removal of the barriers, reshaping of the tariffs in such a way that it becomes attractive to export products from one country to the other, only government can do that. Looking at the structural barriers to trade, by the time government establishes the right trade agreement, and the right tariffs – cross border tariffs and taxational cross borders, partnerships with foreign e-commerce companies will naturally evolve,” she said.
According to Nigeria’s Chief Trade Negotiator, Ambassador Chiedu Osakwe the country’s decision to back down from signing the new pan-African continental free trade area in Rwanda was “in the national interest of a great and diverse country”.
In an email sent in response to Channels Television’s enquiry, Osakwe said the government wants to “deepen, intensify and extend the scope of consultations on a number of areas.” The areas listed include sectoral and systemic issues, as well as the ”aggregated and granular effects” of the new free trade deal for Nigeria’s “fiscal, structural and monetary policies”.
The AfCFTA will make the continent the largest free trade area created since the formation of the World Trade Organisation.
The Continental Free Trade Area is aimed at creating a single continental market for goods and services. It will also enhance free movement of business persons, investments and investors. It is also aimed at expanding intra-African trade through trade liberalisation policies.