Africa’s most populous country and biggest economy, Nigeria, Sunday signed the African Continental Free Trade Agreement(AfCFTA), a continent-wide pact that seeks to create a single market.
Nigeria’s neighbour, the Republic of Benin, also joined the ranks of the countries that signed the pact, leaving Eritrea as the only African Union member yet to agree to the trade policy.
Nigeria initially abstained from signing the agreement initially, saying it was weighing the effects it will have on its economy.
“Nigeria is signing the AfCFTA Agreement after extensive domestic consultations,” the government said in a statement.
AfCFTA came into effect in March with 52 out of 55 countries backing the policy as at then. But 54 countries have now signed the agreement.
African Union said the policy will boost “Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.”
The Brookings institution described Nigeria’s decision to not ratify the agreement at the time as “baffling”.
Being the continent’s biggest market and bedevilled by porous and poorly manned borders, Nigeria is wary it may become a dumping ground for all sorts of goods, especially those not made in Africa.
It said it is “focused on taking advantage of ongoing negotiations to secure the necessary safeguards against smuggling, dumping and other risks/threats.”
Nigerian government agreed to sign the agreement after a panel set up by President Muhammadu Buhari in March gave AfCFTA a positive nod.
“Our reports show that, on balance, Nigeria should consider joining the AfCFTA”, the panel’s chair, Desmond Guobadia, said in a statement to the president Thursday
However, the report of the panel warned that the agreement is fraught with “major risks,” including smuggling and deliberate labelling of products made outside the continent as made in Africa.
“The risk is that it will provide incentive for traders to disguise goods imported from outside the continent as made-in-Africa goods”, the report warned.
President Buhari told the panel, after receiving its report, that African countries must scale up their manufacturing capacity for the continent-wide trade policy to succeed, noting that his government’s vision of intra-African trade is for the free movement of made in Africa goods.
“For AfCFTA to succeed, we must develop policies that promote African production, among other benefits,” Buhari said in Abuja last Thursday.
“Africa, therefore, needs not only a trade policy but also a continental manufacturing agenda.”