The AfCFTA agreement came into effect on the January 1, 2021. However, full implementation of the agreement would take some time as countries settle down to negotiate aspects of the agreement such as trade, dispute settlement processes, tariffs and intellectual property rights. Its however worthy of note that at the centre of President Buhari’s earlier decision to tarry a while, which eventually led to a long delay before he finally gave his assent to the agreement was the deeply considered overriding need to preserve the nation’s local enterprises from the harsh and volatile influences of free market economy. Persistent pressure from various quarters saw the president’s withholding right caving in under the weight of superior agreement on the merit of exploring the finest privileges that African model of free trade economy offers. Even when he eventually signed the agreement, he was resoundingly unequivocal on his fears and expectations from member countries when the trade agreement takes off: ‘‘Nigeria wishes to emphasize that free trade must also be fair trade. We will not agree to anything that will undermine local manufacturers and entrepreneurs , or that may lead to Nigeria becoming a dumping ground for finished goods ‘ he said.
The president is not alone in his position nor is his fears unfounded. Drawing from the experiences and complaints of some member countries in the World Trade Organization (WTO), Buhari’s fears resonate well with countries nursing the fear of “unfair” trading practices that could hurt their economies. It goes without saying that African countries that are relatively more industrialized may want to outdo less-industrialized countries in the opportunities for manufactured goods and in the process go beyond the rules of engagement. The African Trade Policy Centre (ATPC) of the Economic Commission for Africa (ECA) in association with the African Union Commission, has given the clearest indication that (AfCFTA) will bring together a market size of 1.2 billion people and a gross domestic product (GDP) of $2.5 trillion, across all 55 member States of the African Union.
Aside palpable fears of external threats to the prospects of local enterprises in a free market economy there are challenges on the home front peculiar to our local economy. Within the contemplation of fears expressed, Nigeria must rise over these fears by marking out relevant national institutions and agencies with the right mandate to lead Nigeria in navigating the murky and delicate terrain of free market in hedging against fears of unfair trade practices while also exploiting the full advantages that the agreement offers
The African leadership in creating the AfCTFTA envisaged a pool of cohesive and resilient multi- national economic fronts where members participate in huge single market as the best way to address common and peculiar economic challenges in synergic economic input framework. Adapting to the demands in the engagement and exploiting the benefit of partnership facilitate collective and individual growth of members while maintaining the safe limits of rules engagement.
On the whole, NEXIM, as an export credit agency; a macro-economic development initiative designed to carefully exploit opportunities present in international trade among other functions postures as a dependable frontier for exploiting ample opportunities present in international trade for the nation, her people and the economy. It has a mandate to support onshore and offshore activities that result in the export of Nigerian goods and services, by providing finance, risk-bearing facilities as well as trade and market information and export advisory services to the Nigeria export community. The range of services and product lines in its operations are crucial and essential in facilitating and exploring to the fullest the advantages in the clusters of activities envisaged in international trade.
With Nigeria boasting of a population of 200 million- the largest in the continent and with more than $500 billion in GDP- also the highest in the continent, she is well positioned to reap immense benefits from the trade agreement –baring her usual lopsidedness in critical situations. . To its greater advantage, the country already has wealth of experience from trade activities in ECOWAS region. It is on record that the country contributes an estimated 76% of total trading volume in the ECOWAS region- a feat made possible by extant ECOWAS treaty which provides for the free movement of people and goods throughout 15 West African countries. Nigeria only needs to reshape and restrategize its priorities in ECOWAS to fit into The AfCFTA genre of activities which grants greater access to 54 countries with a population of 1.2 billion and a market worth a combined $2.6 trillion in GDP. With Nexim’s stake in Afriexim bank- another strategic and critical player in the continent, Nigeria is in the right stead and ready for the game. As a pan-African multilateral trade finance institution Afriexim bank shares enduring parallel vision and relationship with Nexim rich enough to explore the inherent opportunities in the agreement for the country’s economic betterment
The Extractive industry is said to constitute about 80% of Africa export products but gripped by volatility scare the extractive market is a direct threat for sustainable economic growth which pushes the quest to move economic activities away from the extractive to non -extractive sectors. It is this realization that makes a strong case for Africa to intensify effort towards exploiting the full advantage of AfCTA for its industrial exports. The agreement offers the best opportunity for diversifying Africa’s export trade and encourages shift of economic activities from extractive commodities, such as oil and minerals, which have traditionally accounted for most of Africa’s exports. This is expected to yield a more balanced and sustainable export base for countries in the continent. Majority of business in Africa is tied to SMEs and this is the critical vehicle Africa relies on to drive economic growth. Nigeria with a huge restless population of unemployed youths must find a way to provide the enabling environment for the explosion and thriving of SMEs by addressing the infrastructural challenges which inhibits the foregoing. Contemplated that the AfCTA allows SMEs access to greater market for their goods and services within and outside the continent – Nigeria must not miss the chance of making the best out of the agreement.
Nexim being complementary to commercial banks functions as support mechanism for developmental activities through job creation and support for exports of Nigerian goods and services. For this purpose, it is designed to focus on virgin segments and non- oil exports in different segments of the market economy. Nexim presently has a hold on the CBN –inspired N500 billion Non-oil Export Stimulation Facility (NESF) reserved for export –oriented projects which allows exporters to submit applications directly to her without the hassles of going through other banks. This rightly positions her in the right stead to structure the appropriate financing for enterprises willing to participate in AfCTA agreement either singly or with other commercial banks or financial institutions through syndication.
Since Nexim has been mandated to target specific sectors with greater potential for job-creation e.g. manufacturing, agro –processing, olid minerals and services, she only needs to redesign its operations, in the wake of African the trade agreement, to fit into contemplated areas in the Africa’s model of free trade . Luckily for her, its ambitious plan to make Nigeria the manufacturing hub for West Africa via a plan christened ‘Nigeria Industrial Revolution Master Plan fits into the current agreement. Whilst its plan to promote export of services in professional areas like engineering & construction, creative economy, business process outsourcing and ICT brightens and expands the frontiers for robust economic activities which the country desperately needs to reposition its economy.
Yakubu writes via [email protected]
