AS the frenzy over the delay, the rigmarole and the eventual assent to the African Continental Free Trade Agreement, AfCTA, dies down, we draw attention to the task ahead given its implications to Nigeria’s economy.
First, we welcome the assent to the agreement but we are quick to add that the one-year delay was unnecessary and most unfortunate. This is because Nigeria has already lost ground and was also almost losing relevance in the continental economy due to this delay.
Ghana has taken the strategic continental aviation hub that should naturally have been for Nigeria which carries three times the international air traffic volume of Ghana. Moreover, that the AfCTA could actually take off without Nigeria is an ominous sign that the continent’s largest economy may be headed to the sideline in the continental economic diplomacy.
We also draw attention to the peculiar weakness in Nigeria’s international trade, porous borders and ports of entry, which enable all manners of foreign goods to enter the economy, defeating whatever reason that caused the delay in the assent. Finally, not signing before now has denied the country the opportunity to put its views on the table to shape the structure of the agreement.
However, the reality is that the agreement is work-in-progress and Nigeria can always revisit the gaps in the agreement that may not be favourable to her.
The advantages are there to be taken. There will be access to a larger market of 1.2 billion population and a $2 trillion economy. This offers tremendous opportunities for economies of scale for Nigerian firms.
But while this would improve trade among African countries and provide opportunity for Nigeria to export to other African countries, appropriate safeguards should be put in place to protect vulnerable sectors of the Nigerian economy.
It is also critical to ensure the effective enforcement of the Rules of Origin. This is most critical because market intelligence concerning the agreement points to possible dominance by economies outside Africa, targeting markets such as Nigeria’s.
It is heartwarming that President Muhammadu Buhari had said in unmistakable terms while receiving the reports of the presidential committee on AfCTA, that the agreement should carry with it a manufacturing agenda for the continent and quite importantly, that the goods to be traded should be made in Africa. We only hope that Nigerian government could muster enough diplomatic muscle to ensure this happens.
Besides, Nigeria should focus more on building an economy that is competitive rather than having a disproportionate focus on protectionist approach to industrialisation.
Therefore, the country needs to fix our infrastructure to bring down operating and production costs in the economy. The economic policies and institutions must also be in consonance with the quest for a competitive economy.