Despite opposition from the Manufacturers Association of Nigeria (MAN), sources from the federal government told Real Sector Watch over the weekend that Nigeria will soon join other 49 countries in the African Continental Free Trade (AfCFTA) party.
One of the sources said though the government was being circumspect to ensure that it would not be party to any trade treaty that would destroy Nigeria’s manufacturing sector, it had considered the merits and demerits of the trade treaty and decided that the former outweighed the latter.
“We are looking at the first quarter of next year,” one source, who did not want to be quoted, said.
“The thinking is that we can’t be left out of the treaty at this critical point of our history. Pressure is being mounted on the President, but beside that, we see the AfCFTA as a no-brainer,” a source added.
Last week, the private sector, academics and trade experts disagreed over the country should first strengthen its economy before signing the AfCFTA or signing it while strengthening the economy.
At a one-day conference organised by the Nigerian Institute of International Affairs (NIIA) in Lagos recently, Chibuzo Nwoke, a professor and vice chancellor of Oduduwa University, raised a number of questions for the Nigerian trade contingent, saying that though the country had not rejected the AfCFTA, the federal government must have a closer look at the place of regional economic communities in the implementation of the trade treaty.
“How will the Common External Tariff (CET) and the ECOWAS Trade Liberalisation Scheme (ETLS) fit into the scheme? How was 90: 10 arrived at? Is the AfCFTA consistent with the Economic Recovery and Growth Plan (ERGP)? We need to ensure that the Nigerian economy remains competitive,” Nwoke said.
He explained that protectionism was not a totally bad idea as countries often came up with strategies to protect their local industries.
The Manufacturers Association of Nigeria (MAN) said it was not against the trade treaty as perceived in some quarters, but pointed out that there was an ambiguous basis for the determination of 90:10 Market Access ratios, set to be achieved within five years.
Segun Ajayi-Kadir, director-general of MAN, said the thinking behind the instantaneous implementation of Market Access without negotiating the Rules of Origin was untidy and ran contrary to sound trade negotiation practice.
“Nigeria should not sign the AfCFTA based on bandwagon effect or on the grounds of diplomatic niceties,” he said, adding that the association remained resolute in its belief that a trade agreement that would improve intra-African trade was desirable for the continent’s development.
But Iyalode Alaba-Lawson, national president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), had countered MAN’s argument, saying that Nigeria was deeply involved in the negotiation process from the beginning and should not afford to be excluded from a common African market because it was a veritable strategy to raise the competitiveness of African economies in the global market.
Alaba-Lawson, who was represented Ayoola Olukanni, director-general of NACCIMA, pointed out that the association was in support of conducting baseline studies but added that this should not be allowed to stall the AfCFTA process.
“AfCFTA is entering critical stages and negotiations are going on in priority sectors while Nigeria is still indecisive. We must therefore remember that the world will not wait for us. We need to sign so that we can be involved in negotiations, especially with regards with our areas of concern,” she said.
The AfCFTA is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994, targeted at creating a single market for Africa’s 1.2 billion people and exposing each country to a $3.4 trillion opportunity.
The deal is expected to raise Africa’s nominal GDP to $6.7 trillion by 2030 if all African countries sign up.