Nigeria will Sign African Free-trade Deal


By Joburg Post

Nigeria will sign the African Continental Free Trade Agreement (AfCFTA) at an African Union summit in Niger’s capital Niamey this weekend, after holding out for over a year.

The announcement made late on Tuesday brings the historic deal for the duty-free movement of goods throughout the continent closer to reality.

“Nigeria is signing the AfCFTA Agreement after extensive domestic consultations, and is focused on taking advantage of ongoing negotiations to secure the necessary safeguards against smuggling, dumping and other risks/threats,” 

the Nigerian Presidency tweeted.

Facing pressure from local unions and businesses who feared they would not be able to compete with regional juggernauts in a common market, Buhari held out from joining the pact earlier.

The announcement comes as an AfCFTA Civil Society Forum kicked off in Niamey on Wednesday.

The deal, which plans to expand regional trade by 54% by removing tariffs on 90% of goods traded across the continent, officially came into effect on May 30. It will enter the implementation phase this month following an Extra-Ordinary summit of AU Heads of state on July 7.

Africa’s largest economy joins 44 of the African Union’s 55 member states who signed up in March 2018. Eritrea and Benin have still not ratified the agreement.

Following the official announcement, the Nigerian President Muhammadu Buhari declared: “We support free trade as long as it is fair and conducted on an equitable basis.”

 

Making it work

Buhari has stressed the need to bolster regional manufacturing in order to capitalise on the free movement of locally produced goods.

“Our vision for intra-African trade is for the free movement of ‘made in Africa goods.’ That is, goods and services made locally with dominant African content in terms of raw materials and value addition.” 

he said in July.

“For AfCFTA to succeed, we must develop policies that promote African production, among other benefits. Africa, therefore, needs not only a trade policy but also a continental manufacturing agenda,” he added.


‘Huge Obstacles’

The deal could take at least 3 years to be fully implemented as leaders fine tune legislation in their individual countries to reflect new inter-state agreements, one of the agreement’s architects Carlos Lopes believes.

Yet while the AfCFTA offers an ambitious vision of intra-African free trade, experts say it also requires billions of dollars in cross border infrastructure investment to become a reality.

From decrepit roads to non-existent power networks and patchy airline connections, many countries are ill-equipped to enable trade flows, even if governments tear down tariffs and legal barriers.  

This prompted the African Development Bank to launch a new multi-billion-dollar regional integration strategy to boost infrastructure and allow countries to pursue cross-border integration.

The strategy aims to create a free trade area on par with Europe, North America and Asia by 2025, Khaled Sherif, the vice president of regional development, integration and business delivery at the African Development Bank told African Business in June.

We’re trying to facilitate the construction of 9000km of cross-border transmission lines, enhance construction or rehabilitate about 16,400km of cross-border roads, support construction of rail lines and transport corridors, increase transport links wherever possible and use investments in infrastructure as a way of creating market linkages.

-JP

Article Tags

Nigeria

AfCFTA

Free trade

Economy

AU

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