Some trade experts, the organized labour and other economic interest groups have advised the Federal Government not to assent to the proposed Continental Free Trade Area (CFTA) agreement in view of its potential negative impact on the nation’s economy.
The experts expressed serious concern that the agreement, which is aimed at liberating the African economy by creating a free trade Area for all 55-member states of the African Union (AU), could in the long run be counter-productive for the country.
Commenting on the provisions of the agreement in its current form, an international trade expert Dr. John Isemede, argued that Nigeria would not really gain from the Free Trade Area if the agreement is signed.
Isemede, who is also a former Director General of Nigeria Association of Chambers of Commerce Industries Mines and Agriculture (NACCIMMA) , told pressmen in Lagos that many of Nigeria’s trade agreements had even worked to its disadvantage due to poor export capacity in non-oil and low industrial capacity
Isemede said: “There is a need to review trade agreements and policies at this time because most of the developed countries we see today grew by closing down their borders for a while.
“Take a look at AGOA for instance, for 10 years, only very few exporters have been able to export under the platform due to poor information and lack of proper documentation. We have rice mills and farms that are barely functioning, except for the new intervention of the UNIDO and Bank of Industry to empower farmers and this apparently is not enough”, the trade expert added.
In order to avoid hurting the economy, he advised the Federal Government to look at the critical details involved in the agreement, adding that there must be a balance between import and export for a country like Nigeria to benefit from any trade agreements.
An investment expert Mr. Emeka Nwasike, said that opening the borders of Nigeria would further expose local manufacturing industries in Nigeria which are struggling to survive to undue competition.
Nwasike, who is the Chief Executive Officer of Allied Trust Systems Limited, noted that at a time when other countries are developing policies of protectionism for the growth and survival of its local industry, Nigeria cannot afford to jeopardize the growth of its local industries by allowing a free trade policy.
Similarly, a trainer in small business development, Mr. Henry Agbebire, pointed out that with the high rate of importation from other regions into Africa, the region may soon become a strait for imports against local manufacturing which is a major driver of growth in any economy.
He explained: “Although the focus of the CFTA agreement is to increase Africa’s industrial and trade capacity however, nearly 85% of the goods traded in Africa come from outside the continent as against the 15% produced locally which has led to an annual food import bill of over $35 billion.
“There is therefore a very high possibility that the region would become a conduit for imports against local manufacturing if the free trade zone is allowed operation in Africa and especially in a country like Nigeria. No wonder developed countries and neo-liberal institutions such as UNCTAD, TRALAC, UNECA, WTO, DFID, EU USAID, World Bank etc are very enthusiastic to finance the CFTA process because they know that it would open up the African markets to their exports and at the detriment of the growth of local industries.
“According to history, all developed countries today reached their competitive position through a high import protection on agriculture and other infant industries and as a result benefited from huge subsidies and exploitation of their Southern colonial countries, particularly in Africa for centuries.
“They created the condition to do it through import protection and it is only afterwards that they opened their markets to other countries. I wonder why Africa would want to do otherwise”, Adegbire added.
Explaining further he said: “CFTA has the tendency to reduce real income in Nigeria because, with the policy, the Federal Government will be forced to renounce to a non-negotiable source of income like tariff revenue. Also, as African countries open up, competition will be increasing on the continental market.”
It would be recalled that the Nigerian Labour Congress (NLC) had called on President Muhammadu Buhari not to be stampeded into signing the proposed bill.
The President of the Congress, Mr. Ayuba Wabba, said that the probable outcome of the policy if given life may have a crippling effect on local businesses and attendant effects on jobs.
“We have no doubt this policy initiative will spell the death knell of the Nigerian economy.” the labour leader added.