3rd July, 2019
Nigeria will sign the African Continental Free Trade Area, AfCFTA Agreement in a few days time, leaving out only Benin and Eritrea of the 55 African countries.
President Muhammadu Buhari gave the indication after accepting the recommendations of the Presidential Committee on the Impact and Readiness Assessment of AfCFTA..
Buhari will be signing the Phase one of the agreement in the course of his attendance at the Mid-Year Coordination Meeting of the African Union and 12th Extraordinary Summit on AfCFTA in Niamey, Niger Republic in a few days’ time, according to a statement by Garba Shehu, SSA Media to the president.
A country that signs the first level will then go into country level discussions leading to treaties after safeguards are agreed to.
In accepting the reports as submitted, President Buhari made it clear that Nigerian government will be seeking to include terms that engender the development of policies that promote African production, among other benefits.
“Africa, therefore, needs not only a trade policy but also a continental manufacturing agenda. Our vision for intra-African trade is for the free movement of “made in Africa goods”.
That is, goods and services made locally with dominant African content in terms of raw materials and value addition.
“If we allow unbridled imports to continue, it will dominate our trade. The implication of this, is that coastal importing nations will prosper while landlocked nations will continue to suffer and depend on aid,” he said.
Nigeria had pulled out abruptly from the signing ceremony in Rwanda at the last minute last year, citing some concerns and asking for more time to discuss with stakeholders.
Shortly after, the President inaugurated a committee in March 2018 to consider the various areas of concern.
The committee submitted its report in June.
“Our reports shows that, on balance, Nigeria should consider joining the AfCFTA”, the panel’s chair, Desmond Guobadia, said in a statement to the president after submitting the report.
The trade deal “provides immense opportunities for Nigeria’s manufacturing and service companies to expand to Africa”, Guobadia said.
The panel however recommended Buhari delay “liberalising” and ratifying the deal which would open Nigeria’s markets to the continent, in order to manage the agreement’s “negative impacts.”
“AfCFTA is not without major risks”, it said, warning that the deal could lead to increased smuggling and abuse of ‘rule of origin’ labels on products.
The AfCFTA officially went into force on May 30 this year. It envisages boosting intra-African trade by 52.3 percent by 2022 and cutting tariffs by 90 per cent.
The agreement by Africa’s fifty-five nations, establishes the largest free trade area in the world since the creation of the World Trade Organization in 1995.
AfCFTA, which covers more than 1.2 billion people and over $3 trillion in GDP, promises to unlock Africa’s economic potential.
The African Union launched AfCFTA negotiations back in 2015 with the hopes of boosting intra-African trade, which falls behind trade within other regional blocs.
Only 15 percent of African exports go to other African countries, compared to intra-trade levels of 58 percent in Asia and 67 percent in Europe.
High tariffs and colonial-era infrastructure make it easier for African countries to export to Europe or the United States than to each other.
Furthermore, overlapping membership in Africa’s eight Regional Economic Communities (RECs) hinders trade standardisation and enforcement.
AfCFTA, which establishes a single continental market for goods and services, seeks to increase intra-African trade by cutting tariffs by 90 percent and harmonising trading rules at a regional and continental level.