AFCFTA: Why Nigeria Is Not Yet Ready For Take Off

By Frank Odinukaeze

AFCFTA: Why Nigeria Is Not Yet Ready For Take Off

Nigeria was the 34th nation to sign the African Continental Free Trade Agreement (AFCFTA ) and by implication the last .

Now, ten African nations including : Ghana, Egypt, Kenya,Rwanda and Cameroun, have all completed the mandatory trading requirements necessary for the intra – African trade and therefore  are set for the take-  off   trade on the AFCFTA platform. However, Nigeria again,just like when she signed the agreement late is  missing in the conversation of African nations that are ready to commence AFCFTA project.

AFCFTA, as a trading block was established to engender economic growth and sustained development of African economies,create a single marker for goods and services in Africa and also remove barriers for effective trade facilitation.

It is projected that by 2030, the market size across the continent is expected to include 1.7 billion people with over $6.7 trillion of cumulative consumer and business spending—if all African countries join the agreement.

Analysts posit that Nigeria going by economic indicators are likely to be the greatest beneficiary of the AFCFTA,yet  Nigeria is  not taking advantage of this possibility and is instead foot- dragging in meeting the requirements needed to participate.

It is worrisome that countries like Ghana, Tunisia, Egypt, Cameroon, Rwanda, Kenya, Tanzania and Mauritius  have all  been accredited as ‘participating’ countries, Nigeria is still struggling to meet up with participation requirements.

Speaking to MMS Plus,Dr. Obiora Madu; Director General of the African Center for Supply Chain Management, noted that planning is key to the success of any business or nation, “If you fail to plan, you plan to fail” he said.

Dr Obiora argued that Nigeria’s challenge with export did not start with AFCFTA, stressing that Nigeria has had the challenge even before  AFCFTA.

“Our challenge with export is not starting with AFCFTA. We have had the challenge, how much advantage did we take of  African Growth Opportunity Act “(AGOA) ? 90 percent of the figure in AGOA for Nigeria is Oil. AGOA was not created for oil. Countries like Mauritius even Ghana and so many sub-Saharan Africa countries. I just don’t know what is wrong with us,” he lamented.

He argued that ” AFCFTA is just an export opportunity that drops in mind. So how did we do with the older ones? How did we do it? AGOA is duty free entry into American market for over six thousand items. So, it’s about not doing the right things and not putting the right people in the right places. I have never been excited about AFCFTA because I know that what you just told me will happen. So we should be talking about when are we going to be ready? Because I know that there’s no way we will be ready now and if we don’t take time, those who classified us as beneficiary may see that we don’t become beneficiary by population” .

He said there is nothing wrong with Nigeria’s product, but  there’s something wrong with the  nation.

“My view also is that if we are  prepared and doing well in the export market;  it would have been better.There is a company manufacturing stockings in Ghana, they give like four containers to United States (US) every month. Can you site a manufacturing plant in Nigeria? So it’s a factor of a whole lot of things. You know that trading in AFCFTA is going to be missed with all commodities because you can sell to people what they have. So, doing business in Nigeria already is a nightmare. We are still shipping raw produce. Maybe one day, hopefully after 2023 election there will be a direction and we can get it right,” he said.

Dr Obiora stated that Nigeria is not yet ready for AFCFTA  as the rest  of African nations that are ready cannot wait for Nigeria.”Are they going to stop and wait for us? This stopping and waiting,is it not what has kept Nigeria where she’s now? They are not ready. When it was time to sign negotiation we refused, delayed it. Eventually we signed and then it is time to take off, will they start waiting for us again? I don’t think that makes sense,” he said.

He argued that insecurity in the  country cannot be a reasonable ground for which Nigeria  is not ready for AFCFTA.

 “I don’t agree. What has that got to do with it?  Is there a security problem in Calabar Port, is there a security problem in Lagos Ports? It’s so many other things than what you have just said. It’s a system problem and must be tackled holistically,” he said.

Also speaking to MMS Plus, the Registrar of National Association of Government Approved Freighted Forwarders (NAGAFF)Academy, Fowdr.Francis Omotosho argued that insecurity and trade barriers,tariff and non tarrif  barriers are some of the major reasons why Nigeria may not commence the AFCFTA project. He agreed with Dr.Obiora that Nigeria is not yet ready for AFCFTA..

He noted that Nigeria’ has  major challenges and  as such investors are afraid to come to Nigeria and  to do business.

“We have some major challenges and nobody, no investor or even a trader  wants to come to Nigeria to invest. With what they are hearing about Nigeria every where , terrorists, kidnappers, robbery, high rate of dollar and every other thing, nobody is interested in coming to Nigeria to do  anything” he said stressing that  Nigeria is not yet ready .Customs is not yet ready, because the major thing that  Customs needs to do is to remove barrier, Trade barrier and then talk about the tariff barrier and non tariff barrier.

Omotosho further stressed the need for the NCS to embark on measure that would stimulate trade facilitation in line with AFCFTA objectives.

He said because of the high target given to customs by the government,the Service   is engrossed in ethical dilemma.  “Customs is really facing what we call ethical dilemma by trying to meet up target at the expense of the citizens and  the objectives of  AFCFTA, And on the other hand they are also facing the challenge of meeting AFCFTA concept of removing tariff barriers .So Customs is in serious ethical dilemma .So they have to sit and pick one side in order to complete their revenue target  or to look at the standard of operations worldwide and other African platforms to be able to achieve the AFCFTA objectives” he said

In his contribution, the Registrar ,Chartered Institute of Logistics and Transport,( CILT) Paul Ndibe, disagreed with both Dr Obiora and Fowdr.Omotosho that Nigeria is not ready for AFCFTA.

“It might not be absolutely correct that Nigeria is not ready, it might be correct that Nigeria is not fully ready to embark on the trade and the reasons are for countries that have commenced the trade, they may not have the same countries, that trade with what  Nigeria will trade with. They might not be the same line of product. Therefore,if it requires time for us to develop our own market ,and our own products, then, why not ?” he said, adding that if other countries had started, it is  possible that they have identified other countries they will trade with and the relevant products that will be center of the trade.

He said since we have concession our ports, it is possible that other countries may not have  concession theirs. “Now, that  the AFCFTA  has  come up, the only thing for the government is to begin  now to talk to the terminal  operators to begin  to  see how  to carve  out some space for purposes of  facilitating trade in Africa and for us in Nigeria,” he said.

He noted that Nigeria’ is not into the production of car manufacturing or industrial machines, stressing that since we have more capacity for agricultural product, there is need to have terminals that have controlled  temperature warehouse for purposes of having this products  and providing them for other countries that it may concern.

“So government needs to talk to terminal operators for purposes of creating these facilities. For example, if you take Lagos Port Complex ,there are four terminals. Two are public operated and two are private operated like Dangote, AP-Moller ,ENL. Because of the nature of this job it might not be very easy to introduce and increase capacity for purposes of facilitating African continental free trade ,except  you first of all approach the terminal operators to enter into a unique agreement with  them,

‘he said

 He said the countries that have commenced already also had their teething problems but were able to turn it around and that’s why they are commencing the AFCFTA trade.

Ndibe noted that Nigeria was one of the last seven to sign the trade, adding that there are 25 countries that make up the trade but Nigeria signed late, while Ghana and other countries signed earlier. He said Nigeria delayed until the last minute.

‘It is only when you sign you begin  to think of creating an enabling environment for that, so the initial delay in our signing would be attributed to the delay that we are currently having ,because of the teething problems other countries faced at the time and sorting them out ,we were not doing that, because we have not actually come  to terms with it. By time we came to terms with it and signed was when we started developing processes to facilitate trade. So that initial delay is what is affecting our inclusion in the trade, “he stated.

He argued that there is no better alternative to AFCFTA, stressing that the only thing is that we signed late and because we signed late ,it’s affecting us. And it’s something we can overcome by fast tracking the process which I understand that the office for trade negotiations of the Federal Government is tackling.

 He said with Nigeria as  the strongest economy in Africa Nigeria should be the leading country to benefit from AFCFTA .

“Looking at our population, looking at our demand for products from African countries and of course, the size of our economy we should be  better beneficiary of AFCFTA.

He affirmed that Nigeria might be having some challenges now, but that cannot mean that Nigeria is not ready for AFCFTA.

‘Nigeria may not be fully ready now, but certainly the challenges would be taken care of, “he said.

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