As AfCFTA enters into force: What should Nigeria do now? – Vanguard

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By Ayo Olukanni THE entry into force of the Africa Continental Free Trade Area, AfCFTA, Agreement on the May 30, 2019, is indeed a historic event in the long march for economic integration in Africa. The AfCFTA seeks to create a single unified market, thereby boosting Intra-African trade from 17 per cent to 52 per cent by 2022, and increasing the gross domestic product of the African continent from USD2.5trillion to USD25trillion by 2050. President Muhammadu Buhari signing the Assembly of the Union on African Continental Free Trade Area (AfCFTA) agreement on behalf of the Federal Republic of Nigeria while other officials witnessed the signing during the 12th Extra ordinary session and the First Mid-Year Coordination Meeting of the African Union at the Palais des Congres, Niamey, Niger Republic. Photo by Abayomi Adeshida 07The question on everyone’s lips now is, “what should Nigeria do, now that the AfCFTA has entered into force and the train is gradually pulling out of the station”. In answering this question, let us leave out the issues of why Nigeria did not sign and why we dithered till now over this Agreement. The hope is that we would sign before the high profile ceremonial launch of the AfCFTA in Niamey in July 2019 which will usher in the operational phase of the of the AfCFTA. For now let us concentrate on what needs to be done and start preparing for implementation when we eventually accede to the Agreement. As Africa gears up for the implementation of this landmark agreement, a few issues deserve our attention. The AfCFTA is designed for the economic integration of Africa along the lines of what is evident within the European Union, EU, the North American Free Trade Agreement, NAFTA, and the Association of Southeast Asian Nations, ASEAN. The AfCFTA Framework agreement, of course, still requires fleshing up in various parts, such as the operational modalities of the Rules of Origin, Tariff Schedules, Tariff Concessions, Services, and Investment Rules, just to mention a few. Single and unified market The reality is that the AfCFTA is finally here, and the recent stakeholders’ meeting organised by the Coalition for Dialogue on Africa, CoDA, in Addis-Ababa is a clear indication that we are on the margins of history on the emergence of Africa as a single and unified market and only those who prepare for it will harness the full potentials. The Stakeholder Dialogue on Continental Trade and Strengthening Implementation of the African Continental Free Trade Agreement, organised by Coalition for Dialogue on Africa, CoDA, was held from May 27 to 28,s 2019 in Addis- Ababa. The event was a policy dialogue meeting chaired by former President Olusegun Obasanjo in his capacity as Chair of CoDA. The dialogue brought together African policy makers, Regional Economic Communities, RECs, and a cross section of representatives from Regional Economic Groupings, Regional Financial Institutions, Chambers of Commerce, African Business Leaders, and other members of the Organized Private Sector. The meeting deliberated on strategies for the successful implementation of the AfCFTA in pursuit of AU agenda 2063, the Africa We Want. While the stakeholder dialogue was going on, another meeting was also held at the African Union, AU, headquarters in Addis Ababa. This was the 15th meeting of the Plenary Negotiations Forum of the Trade Negotiators. Also read: Buhari charges committee to address risks in AFCFTA It was dealing with the specifics issues of the Agreement while the quiet diplomatic maneouverings of who will host the secretariat of the AfCFTA was going on among seven states who are angling to host the Secretariat: Egypt, Eswatini, Ethiopia, Kenya, Ghana, Madagascar and Senegal. Both meetings were of immense significance because they focused on “implementation” which is the real challenge in ensuring that this continent-wide Trade Agreement is not mere talk but achieves its purpose of positively boosting intra-African trade. Both meetings concluded that implementation is key now and African countries, especially the private sector should start getting themselves ready and put their house in order to be able to benefit. Before I continue, let’s go back a bit into history. While the May 30, 2019 is truly worth marking, the dream of a pan-African single market goes as far back as the formation of the Organisation of African Unity, OAU, in 1963. An   economically integrated Africa was part of the vision of pan-Africanism from an envisioned United States of Africa. This was the dream of our forebears and pioneer African leaders close on the heels of political independence in the 1960s. Visionary leaders, including the late Dr. Kwame Nkrumah, the first President of Ghana and our very own golden voice of Africa, Prime Minister Tafewa Balewa alluded to it. This they did at the formation of the OAU, now African Union, on May 25, 1963. They forcefully argued that the independence of African countries will not be meaningful without economic independence of the new African States. In addition, they spoke about an African-continent-wide economic grouping. The journey to the AfCFTA thus started as far back as the 1960s. That vision inspired regional economic communities such as the Economic Community of West African States, ECOWAS, the East African Community, ECA, the Southern African Development Community, SADC, and others, as building blocks. There was also the the Lagos Plan of Action (April, 1980), the Abuja Economic Treaty adopted on June 3, 1991, and the establishment of an African Central Bank which began in May, 2015 and is due to be completed by 2020. With the commencement of the negotiations of the AfCFTA in 2014, our very own Ambassador Chiedu Osakwe became the chief negotiator and presided over the negotiating forum at the Technical Working Group level, while the Minister for Industry, Trade and Investment, Dr. Okechukwu Enelamah was the chair at the ministerial level. This was in sync with our leadership role in Africa which has seen Nigeria’s involvement in the struggle against apartheid, the fight for independence of African countries under colonial rule, and the promotion of economic integration. So, it was only natural for Mr. President to head for Kigali for the signing of the AfCFTA in June 2018. However, concerns over the lack of stakeholder consultations as well as the lack of empirical studies on the impact of the AfCFTA on the local economy led to the decision that it was not yet time for Nigeria to sign. This also led to nation-wide consultations, and the consensus later emerged that Nigeria cannot afford to be excluded from of a continent-wide single market for reasons too well known to start listing here, and should sign. Our signing is only a matter of time because Nigeria has come too far to be missing in action and certainly not on the AfCFTA! The AfCFTA is perhaps the fastest among all the array of negotiated agreements in the history of the OAU/AU. From the decision by the Heads of State to commence negotiation, to the conclusion of the Framework Agreement and its entry into force, the entire process took about 24 months. This is a reflection of the political commitment to this particular agreement and the decision to continue that trajectory. Hence the decision to ramp up activities, especially the deposition of instruments of ratification towards entry into force which has now taken place. The conclusions and outcomes of the CoDA meeting in Addis-Ababa on May 27 and 28, 2019, is that member states must now gear up for implementation and set up their respective National Implementation Committees. This is to enable them identify the challenges to an efficient unified single African market. The committees are also expected to drive the process for private sector engagement, free movement of persons, industrialization, value chain development, gender equality, strengthening of regional economic communities, and promoting cross border trade. While noting that the AfCFTA has taken off, we must accept the fact that work has just started, especially at the national levels. This is the heart of the matter now, hence the recommendation for a strong National Implementation Committee with the focus on the private sector on whom implementation will devolve. Each African country has the responsibility for the success of the agreement. So on our part, in our dear nation, Nigeria, how do we translate this vision to reality. There is no silver bullet in this case. Hard work is the answer. In addition to an efficient National Implementation Committee, private sector buy-in is necessary. The private sector should be assisted to ensure a proper understanding of this agreement as part of the efforts to prepare them to harness the opportunities provided by the agreement. At the CoDA meeting in Addis-Ababa there was understandably the question of why Nigeria has not signed and when will Nigeria sign. There was also a sense of anticipation of Nigeria coming on board to give concrete meaning to the agreement because there is the notion that the AfCFTA will be a hollow Continental Trade Agreement without Nigeria. While this may be far fetched there is some truth in that. Rules of origin, services, tariffs The meeting of July 2019 in Niamey is the official launch and we should indeed hop on board this train which is gradually rolling out of the station. The hope is that we will sign and our team will now focus and start preparation for key issues such as the Rules of origin, Services, Tariffs and so on. Already we have lost out in the competition to host the secretariat of the AfCFTA. There is the likelihood that our sister state of Ghana has secured the right to host the headquarters. We must act now, especially those of us in the Organised Private Sector. It is also pertinent to draw attention to the fact that indeed, already Nigerian private sector operators and indigenous companies are already defacto operating intra-Africa. One of Nigeria’s conglomerate is operating in 18 African countries. Nigerian banks dominate the banking and financial sectors. We practically dominate the entertainment and creativity sectors. The video and films of Nollywood are ubiquitous and worth billions of dollars, creating jobs and employment at home and abroad. The Nigerian airline operators, despite the tough terrain of the domestic aviation sectors, are now providing services across the west and other parts of Africa. So what are we afraid of? Now is the time for the private sector to wake up and start to get ready to harness the potentials of the agreement. The core issue here is how does the private sector take advantage of the AfCFTA. There is need for stakeholders to study the Agreement with a fine comb for a proper understanding of its nitty gritty. This will be part of the activities to start preparation for   implementation. Nigerian banks which are already operating in West Africa and the rest of Africa, as well as operators in key sectors of the economy must be invited to stakeholders meetings to deliberate also work with the National Implementation Committee to be set up by government. Now is the time to act. We can no longer delay. Vanguard
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