Divided private sector puts FG in dilemma over AfCFTA
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Our position is that our dear country should sign the Africa Continental Free Trade Agreement AfCFTA. While we continue to address the issues around it, and work on a strategy for implementation to tackle the problems, we should sign the agreement now.”
These were the words of Iyalode Alaba Lawson, national president of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), on Monday in Lagos. Lawson’s position is a reflection of the views of the majority of private sector players, who see more upsides on AfCFTA than downsides.
The Lagos Chamber of Commerce and Industry (LCCI) in late May backed the trade deal, stating that if smaller African countries are not afraid of it, Nigeria with 198 million people and humongous $430 billion GDP, has no business shying away from inking it.
“I don’t see anything to be afraid of,” Babatunde Paul Ruwase, president of LCCI, said at a stakeholders’ consultative forum on AfCFTA in Lagos in late May.
“If smaller countries are not afraid of it, we should have no fear to be there,” Ruwase added.
However, the position of NACCIMA and the LCCI is contrary to that of the Manufacturers Association of Nigeria (MAN), which believes that the AfCFTA is shrouded in secrecy and that Nigeria will be worse for it if the country signs the agreement in its current form.
“Right from the period preceding the Kigali Summit and up until now, the content of the Nigerian offer has remained unknown to manufacturers who are the number one stakeholders to be positively and or negatively impacted by the proposition,” Frank Jacobs, president of MAN, said recently in Lagos.
The labour unions are also clearly in sync with manufacturers, stressing that signing the deal is akin to signing away Nigerian jobs and making Africa’s most populous country a dumping ground.
However, the impact of this disagreement among the private sector is that the federal government is struggling to take a position on the trade treaty.
During the visit of Cyril Ramaphosa, South African president, President Muhammadu Buhari promised to sign the trade treaty soon, adding that the delay in inking it was basically to protect the national interest.
“I was presented with the document. I am a very slow reader maybe because I was an ex-soldier. I didn’t read it fast enough before my officials saw that it was all right for signature. I kept it on my table. I will soon sign it,” Buhari said on July 12.
On July 17, Yemi Osinbajo, Nigeria’s vice president, at the 8th Presidential Quarterly Business Forum held in Abuja, expressed concerns about AfCFTA, recalling the country’s experience with dumping and other injurious practices which he said made it obvious to Nigeria that its market could be a real target.
“Our local manufacturing could become unprofitable, our agricultural advances could be reversed,” Osinbajo said.
Sources in government told BusinessDay that the federal government is caught between the devil and the deep blue sea.
“The government wants to be part of this agreement, but it cannot sign away Nigeria’s future. The government understands that there are advantages to this, but it is careful not to be recorded in history as one which killed industries,” the source said.
The source said President Buhari is yet to make up his mind, being naturally protectionist, adding that the country might miss the August 30 deadline, after which it must start to negotiate terms afresh if it wants to join the AfCFTA.
BusinessDay gathered that there is a sharp division even among government ministers, as a number of them are still not on the same page with the National Office on Trade Negotiation and the Ministry of Industry, Trade and Investment.
The AfCFTA is easily the largest trade agreement since the World Trade Organisation (WTO) in 1994. It is targeted at creating a single market for Africa’s 1.2 billion people and exposing each country to a $3.4 trillion opportunity.
The AfCFTA expects that this deal will raise Africa’s nominal GDP to $6.7 trillion by 2030 if all African countries sign up.
The treaty will liberalise 90 percent of products produced in the continent. This means that a country that is bound by the AfCFTA can only protect 10 percent of its local industries.
ODINAKA ANUDU
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