A close friend of mine aka ‘Uncle Olayinka’ had asked me if I was going to write about the African Continental Free Trade Agreement (AfCFTA), just at the time Nigeria become one of the 22 member countries that ratified the agreement, bringing it into life and making it effective in the African Continental Free Trade Area. The agreement would function as an umbrella, to which protocols and annexes can be added over time. It specifies trade protocols, dispute settlement procedures, customs cooperation, trade facilitation and rules of origin. Former President, Olusegun Obasanjo (OBJ), kept urging the Federal Government to sign up the ratification, just as the South African President was also underscoring the vital role that both Nigeria and South Africa needed to play, such that AfCFTA succeeds. As much as our GDP and recovering economy is cast in a foggy light, our nominal GDP represents 17% of Africa’s GDP, being the best in the continent, with SA coming in 2nd with a GDP of 16%. PMB was millipede-speed cautious, as he insisted that he needed to protect local manufacturers and entrepreneurs and would certainly not rush into an agreement that was anti-competitive. The Nigeria Labor Congress was also wary of a commit to the AfCFTA as it called it a “renewed extremely dangerous and radioactive Neo liberal policy initiative” suggesting increased economic pressure, would pressure workers into migration under difficult and unsafe conditions. The Manufacturers Association of Nigeria, representing 3000 indigenous manufacturers, stoutly stood against the agreement and urged the Federal Government to back out. The FG continued to consult local businesses in order to protect them and to ensure that the private sector buys into it.
The AfCFTA agreement is analogous to the European union model of business interactions between sister nations, just as we have had existing ECOWAS protocols between West African countries albeit the protocols suffer flagrant violations, of which Nigeria is hit the most. So the repositioning of our agriculture with monumental spending to encourage the local production of rice, sugar, milk, textiles tomatoes, aluminium and silly toothpicks – will amount to nought and continue to consume a lot of forex, while negatively impacting on our balance of trade, if we are vulnerable at our land borders.
So my friend Olayinka’s concerns were premised on the fact that all these other countries that have better infrastructure to support local businesses and attract foreign investors will have a comparative advantage over Nigeria, with our huge infrastructural deficits. Investors would be willing to land their factories in Ghana with better electricity supply, and export them to Nigeria, guarded by a 90% reduction in tariffs, as specified by the AfCFTA. Had PMB agreed to ratify in 2018, tons of factories would have been near ready by now, rumbling to exploit our massive 200 million man strong market.
PMB’s Independence Day speech, encircling revenue generating agencies especially the Nigeria Customs and the FIRS – emphasising their targets and likely sanctioning if those targets aren’t met, was the defining mallet that consolidated earlier announced policies and reforms. Such policies include the withdrawal of forex for the importation of milk, and massive investments in livestock farming, and the closure of all land borders, namely Seme and Niger.
Of immediate impact was the border closure which stared down the bogus 60 million litres daily consumption of petrol back to 50 million litres daily. In one fell swoop, the pool of petroleum products smugglers and racketeers that have perennially created artificial scarcity one too many times, over several years, were neutralised. Suddenly Benin republic was experiencing scarcity of petrol and a monumental hike of prices. The value of their CFA fell and their President has been pleading with Nigeria to ‘open up’. Astronomically, there was a redundancy of imported parboiled rice in Benin because Nigeria’s borders were shut down. Dangote said that no country will survive with Cotonou as its neighbour.
Hameed Ali, the CG Customs said that the agency was recording 5 billion Naira daily and that in a single day last month, a record 9.5 billion Naira accrued to the customs, which had never happened before, in Nigeria’s history. Benin’s port was thriving and their economy booming from trade, while our own economy was flailing inspite of our natural endowments. The only solution to this Seme border boom to the detriment of our own economy was a total shutdown. And you know when PMB says total shutdown, it is total when you have one teeny tiny glance at Hameed Ali.
Leakages in government revenue have become drainages. Gold worth 9 billion dollars leakes from mining in the North west, and another 1 billion dollars worth of logging revenue leaks out from the North east. 1 billion dollars worth of bitumen and other minerals drains out from the South west and South east, and then ofcourse a huge fortune of around 3 billion dollars worth of oil is drained away by bunkering in the South south. That is collectively a staggering 15 billion dollars of government revenue lost from these few resources.
The Daily-trust fact-checked Omo Ali Ovie’s tweet to ascertain that yes – our export value was 8.53 trillion Naira in 2016, while import was 8.82 trillion. In 2017, exports rose to 13.6 trillion and imports stood at 9.56 trillion. Exports further hit 18.53 trillion in 2018 and imports stood at 13.17 trillion. Nigeria’s trade balance, being export minus imports, grew from 290 billion in 2016, to 4.04 trillion in 2017. In 2018, it further rose to 5.36 trillion. You need not be as dexterous or renowned as Bismarck Rewane to crunch these figures to see that we growing. The pace or growth rate can be faster if there is a deluge of efforts to ensure that trade protocols with neighbouring countries are religiously adhered to, and then eventually, policies like the AfCTFA agreements fine-tuned in such a way that Nigeria does not get victimised while playing big – big brother.
Calabar port is now functional and a new one will be built in Bayelsa. Dredging of the River Niger to enhance the functionality of Baro town and River port is being done, and all these would readily escalate the de-congestion of the Tincan and Apapa ports. The land borders, porous as they are, could be eliminated as they seem to facilitate terrorism and banditry. China closed down borders for 30 years or so, and Malaysia too right? All hail Trump is building border walls, wrought from iron. We cannot remain an ‘Ashewo’ style bordered country and cry foul over unending terrorism. The speed of infrastructural development all over the country in the forms of railways, roads, and bridges are very key. Then the behemoth power reforms and the local refining capacity. With these, we will be nearing an Eldorado. Right now, PMB’s government’s thrust should be like the activity of a Chef, cooking up a buffet, so that by 60 (Nigeria @ 60), we can begin to return to the glamorous celebrations of October 1st.
Tahir is Talban Bauchi
