January 20, 2021

Nigeria not ready for AfCFTA, says APFFLON boss

Our land soaked in blood, gloom, South-East Bishops wail

A map of Nigeria


By Dave Oludare Oso

Divergent reactions have continued to trail Nigeria’s move to boost its international trade with the the flag-off of African Continental Free Trade Area (AfCFTA).

While a sizeable percentage of Nigerians and Organised Private Sector (OPS) players have viewed the development with unbridled optimism, a high number, especially corporate entities are of the opinion that the move will lead to Nigeria’s doomsday as the treaty is going to be implemented with the nation at a disadvantageous frame.

One of such corporate entities is the Africa Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), which think that the development, though an historic milestone, is coming at a time the country is in a state of uncertain and unfavourable industrialisation and manufacturing activities.

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The President of African Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), Mr. Frank Ogunojemite in a chat with Vanguard insisted that Nigeria was not ready for AfCFTA, noting that with the prevailing micro and macroeconomic variables in the polity, AfCFTA was doomed to fail and the nation set to be the biggest loser.

According to the APFFLON boss, there was no aspect of the nation’s economy that indicated competence or preparedness for the new trade regime at the moment.

He said many industry watcher believe the treaty will falter like the Economic Community of West African States, ECOWAS, Trade Liberalization Scheme (ETLS), Common External Tariff (CET), African Growth and Opportunity Act (AGOA), among others.

The APFFLON boss said that though under AfCFTA trading, tariffs on various commodities, where rules of origin have been agreed, will be drastically reduced and traders of all sizes will have access to a much bigger market than they used to before, Non-Tariff Barriers (NTBs) to trade will also be addressed as a mechanism for speedy reporting and resolution of NTBs has been put in place, the prevailing economic indices in the country will negate any favourable factors.

His words: ”In Nigeria however, forex challenges, increase in electricity tariff, multiple taxation, complex bureaucratic processes, among other factors increase the cost of production of goods that should compete in the region.

”The nation’s logistics performance index is also in shambles with dilapidated roads, non functional rail, inaccessible port access and congestion at ports.

”Given these variables, neighbouring countries have better investment environment for production of competitive goods and Nigeria is tipped to become the dumb site for products from other countries in the region.”

Ogunojemite said that from the standpoint of a freight forwarder, “The way the government has been handling port operations in Nigeria has been pathetic. They says charity begins at home but looking at our port operations and economic regulations in the country; APFFLON does not see any benefits for Nigerians from the regional agreements.

“It is so sad that the gridlock in Tin Can and Apapa ports remain unresolved till this moment. In fact, one can argue that this bottleneck is deliberately created to punish Nigerian citizens as terminals, shipping companies and some government officials benefit. This logistic challenge has caused collateral damages for corporate and individual importers,” he said.

Currently, the percentage of trade that African countries do with each other is a mere 16 – 18%. The bulk of the continent’s trade is with the rest of the world, and most African exports are in raw materials including extractive commodities like oil, gas and minerals which are vulnerable to market volatility.

”Nigeria is the most populous country with over 200 million citizens and this demography makes it the biggest market. Nevertheless, the nation doesn’t seem to have an area of competitive advantage.”

Ogunojemite lamented that Nigeria hadn’t addressed the major issues limiting port business which were identified by the International Monetary Fund (IMF) last year, as dilapidated port access roads leading to congestion, extortion and absence of a national Single Window.

”With AfCFTA, the bigger regional market will spur producers to upscale and support increased industrialization and value-addition in the continent. Indeed, more employment opportunities will be generated for Africa’s burgeoning youth population. How much of these opportunities would be taken up by the continent’s most populous nation? Would Nigeria be content to be Africa’s dumpsite for goods and services produced elsewhere?,” he added.