The African Continental Free Trade Area (AfCFTA), was established as a flagship project of the African Union’s Agenda 2063, a blueprint for attaining inclusive and sustainable development across the continent over the next 50 years. It aims to boost intra-African trade by providing a comprehensive and mutually-beneficial trade agreement among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy while AfCTA officially commenced in January 2021. The importance of this to the development of the continent drew the attention of the President, Lagos Chamber of Commerce and Industry (LCCI), Asiwaju (Dr.) Michael Olawale-Cole, offered useful information on how to make AfCTA more impactful.
The LCCI President made this known at the Export Group Symposium themed, “AfCTA: Nigeria’s Preparedness and the Role of Logistics in its Successful Implementation”, held recently in Lagos. Dr. Olawale-Cole, who was chief host at the occasion, stressed the importance of exports to the business community and the nation’s economy, saying that one of the goals of the LCCI is to promote trade and boost exports, which would invariably open new vistas for Nigerian businesses. He described the Pan-African Payments and Settlement System (PAPSS) as a centralised payment and settlement infrastructure for intra-African trade and commerce payments. The project is being developed in collaboration with the African Export-Import Bank (AFREXIM Bank) and would facilitate payments and formalise some of the unrecorded trade due to the prevalence of informal cross-border trade in Africa.
According to him, there are several programmes and opportunities at the regional, continental and international levels that exporters can tap from to their advantage. For instance, the African Growth and Opportunity Act (AGOA), a United States Trade Act, was enacted on May 18, 2000 as Public Law 106 of the 200th Congress, is one, which has since been renewed to 2025. The legislation significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries while the Trade Liberalisation Scheme (ETLS) is a trade instrument designed by the Economic Community of West African States (ECOWAS) that allows unhindered market access to 15 member countries by promoting economic relations within the sub-region.
The LCCI President observed that exporting of primary products to the global community without value addition, through processing, would not generate the desired amount of foreign exchange because Nigeria’s non-oil export sector is dominated by raw materials and primary products such as cocoa, cashew, and leather exports, saying “We could generate more foreign exchange earnings if these primary products are processed into finished goods for the international markets. The potentials of non-oil exports are largely untapped due to over dependence on crude oil exports”. Quoting the International Logistic Performance Index, which was last published by the World Bank Group in 2018 that ranked Nigeria at 113 out of 140 countries assessed, showed that Nigeria still has a long way to go as its performance in different aspects of logistics is just average, at best. With the AfCFTA coming on board and the significant opportunities it presents for various sectors, especially for Small and Medium Enterprises (SMEs), it is paramount that the nation revolutionises its logistics sector, which can be either a huge impediment or enabler to trade and to maximise the benefits of the trade deal, logistical challenges must be tackled, as a matter of urgency.
Dr. Olawale-Cole advised the government to help in quality profiling of the export-ready goods, packaging, and ports logistics for several exporters or potential exporters are not able to pull through the procedures for exporting from Nigeria for “We need a one-stop-shop mechanism to drive export logistics and documentation. The regulatory agencies must strengthen the means of communication to close the information gap between the agencies and players. There should also be incorporation in the communication plan and strategy, mechanism for feedback and continuous interactions”. The LCCI President took time to highlight the importance of improving on the export of other products beyond agricultural products by looking at textiles, solid minerals, and creative arts, among others.
On what to do to explore opportunities of the AfCFTA, Dr. Olawale-Cole said “We must create more awareness; build capacity of the public sector trade regulators like the Nigerian Customs Service, the Federal Ministry of Finance and National Planning, the Federal Ministry of Industry Trade and Investment, Nigerian Export Promotion Council, the Nigerian Investment Promotion Commission, and the National Office for Trade Negotiation, and the AfCFTA Country Office on how to facilitate trade to take advantage of the AfCFTA”. Dr. Olawale-Cole called for improved non-oil exports, as revealed by the Nigerian Export Promotion Council (NEPC) in its First Half Year Progress Report 2022 presentation. In the report, the total value of non-oil exports in the first half of the year was about $2.60 billion, up 62.37 per cent from the respective $1.60 billion and $981.44 million recorded in the first halves of 2021 and 2020. More importantly, this rebound should be sustained through more incentives to exporters and targeted financing for export infrastructure”. Hence, better opportunities would certainly come up when AfCTA is allowed to drive the needed change.
