Nigeria’s organized private sector (OPS) has maintained that until existing trade barriers among African countries were removed, the implementation of the recently adopted African Free Trade Agreement (AfCFTA) by many governments in the continent may not accrue the targeted economic benefits.
This explains why key OPS groups and stakeholders in the country, including Dangote Group, Manufacturers Association of Nigeria (MAN) and Lagos Chamber of Commerce and Industry (LCCI) see the delay by the Federal Government to sign the pact as desirable for the nation’s economy.
Speaking at the just concluded two-day Africa Trade forum 2018, tagged ‘AfCFTA Ratification and Implementation: A game Changer for Africa Economies’ held in Lagos, the President of Dangote Group, Aliko Dangote, queried that “what is the rationale behind formation of regional economic blocs, if trade barriers still exist among African States?”.
The Africa’s foremost industrialist lamented the frustrations, administrative challenges and difficulties companies in his group encounter in their efforts to market goods in neighbouring African countries.
He said: “There is need to consult widely and we are supporting the government in this regard. It is not that I am opposing AfCFTA, but there are many barriers especially in our tariff system among the regions of Africa. We don’t want a situation where Africa will become a dumping ground,” Dangote said.
“There were some trade agreement in the past. Why are they not working? We as a company, Dangote will benefit from AfCFTA. We need 80 percent of raw materials to be very productive; importation of raw materials is not the best for us if we must implement AfCFTA. We don’t want foreign goods to come and dominate our market. Just to take cement to Ghana we have to sign 38 documents.
“For example in Benin Republic that is 24 kilometres from us taking our products there is difficult. So, all these and many other things need to be addressed. What we need is backward integration that will make us produce competitively”, Dangote stressed.
Similarly, the Director-General of the Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, noted that the association had consistently maintained that it was not against intra-African trade, especially the type that support the market reach of Nigerian businesses, including manufacturers.
He, however, explained that such a continental trade regime should not expose Nigeria to become a dumping ground for other countries’ goods to the detriment of domestic enterprises.
Ajayi-Kadir clarified: “We don’t want a situation where Nigeria will be a dumping ground. However, when the agreement was being signed, we cautioned against signing an agreement without fully engaging the relevant stakeholders and adequately comprehending its implications for the Nigerian economy in general and the manufacturing sector in particular.
“We counselled that a country-specific study should be carried out to ascertain its implications for the Nigeria economy, particularly the productive sector.
“It is gratifying to note that the Federal Government embarked on the needed nationwide consultation and is doing the needful in reconstituting the presidential committee dealing with the matter and the private sector is called to join the process.
“At the end of the day, Nigeria will take an informed decision as to what type of AfCFTA it should sign and when to sign.”
Commenting on the continental trade pact, the President of LCCI, Mr. Babatunde Ruwase, said that what remained important for the Nigerian government is to ensure that appropriate safeguards are in place to protect the vulnerable sectors of the economy.
He said: “Nigeria must be part of the AfCTA for numerous reasons which include the fact that it is a platform for our Small Scale Enterprises, SMEs to be integrated into the regional economy and a means of acceleration of women’s trade and economic empowerment.
“We counsel that in order to take full advantage of the AfCFTA, government needs to intensify current efforts to eradicate non-tariff and regulatory barriers to international trade such as border delays, burdensome customs and inspection procedures, as well as ensure that multiple licensing and taxes are eliminated. A situation where it is easier to import than to export will defeat the purpose of signing the AfCFTA”, Ruwase added
