Post Views: 126 As controversies over Nigeria’s inability to decide whether to sign the African Continental Free Trade Agreement (AfCFTA), a year afte...
As controversies over Nigeria’s inability to decide whether to sign the African Continental Free Trade Agreement (AfCFTA), a year after majority of the continent’s 55 countries had endorsed the agreement, Professor Benedict Oramah, President of African Export-Import Bank, on Tuesday in Lagos urged the Nigerian government to sign it without further delay.
Oramah, who was as guest lecturer on: “Leveraging the African Continental Free Trade Agreement to boost Nigeria’s economic development,” at the 2019 edition of the annual Bullion Lecture organised by the Centre for Financial Journalism (CFJ Nigeria), said Nigeria’s endorsement was needed to key into a window of opportunities for the country to maximize its economic potential.
He recalled that the Agreement was produced from decisions and milestones articulated at the Abuja Treaty of 1991 aimed at defining clear plans for Africa’s economic integration.
According to him, the AfCFTA was signed in Kigali, Rwanda on March 21, 2018 by 44 of 55 African countries, while Nigeria which hosted the forum that gave birth to the initiative is yet to decide on what to do with it.
“The AfCFTA which was signed in Kigali, Rwanda on March 21, 2018, was in line with the Abuja Treaty expectations. So … the child that was conceived in Nigeria was born in Rwanda. And with the emergence of that child, Africa sees a renewed hope, a reinvigoration to chart a new course,” Oramah told the audience.
He expressed worry smaller countries that looked up to Nigeria for leadership had endorsed the agreement and gone ahead to ratify same.
Tracing the historical and economic imperatives that necessitated the AfCFTA, the AFRIEXIMBANK boss noted that Africa benefited a little from many years it was ruled by colonial powers whose main focus was to draw the raw materials it needed for its home industries while it dumped its own manufactured goods in return.
He said the AfCFTA was meant to change the narrative as a continent that was called the “Basket Case”, is now on the path to becoming the “Bread Basket” of the world.
Enumerating the benefits of the AfCFTA to Africa and to Nigeria in particular, Prof. Oramah said the treaty would create an enabling environment for the continent to chart a new development path and eliminate the causes of weakness while upholding the areas of strength among the 55 countries of the continent.
He also said the initiative would create the required economic integration that would promote sub-regional and continental supply chains such as the automotive industry, as “the AfCFTA offers opportunity for African countries to begin to create and nurture infant industries”.
He added that “the AfCFTA creates opportunities for African economies, including Nigeria, to take over from China as the World’s manufacturing hub. China exports US$45bn of light manufacturers into Africa. Nigeria and other African countries can expect to fill that void if they take advantage of the tariff and non-tariff reductions in the AfCFTA.”
The Afreximbank chief said Nigeria stands a great chance of enlarging its Foreign Direct Investment (FDI) inflows through the AfCFTA given its position as the largest economy and the most populous in Africa.
He said a survey conducted by AFRIEXIMBANK showed that 69% of Nigerian businesses believed that AfCFTA would be advantageous to the country in three main areas namely creating a better business environment, promotion of local businesses and business growth and expansion.
He however identified a number of constraints that Nigeria must overcome to reap the benefits inherent in the AfCFTA, including creating conducive macroeconomic policies that support increased regional trade, while strategic steps should be taken to introduce policies that encourage FDI flows to sectors with the highest potential for foreign trade, namely light manufacturing and agriculture, he said.
According to him, the challenge of lack of appropriate financing should be addressed through specific monetary and trade policies that target the potentials of each country towards maximizing the competitive advantage inherit in each economy.
He said 49 of 55 African countries had signed the AfCFTA Agreement while 20 countries had ratified it.
Furthermore, 16 countries had deposited their instruments of AfCFTA ratification with the Chairperson of the African Union Commission as additional four countries had received parliamentary approval for the ratification of the Agreement.
He enumerated many areas that Afreximbank had supported African businesses to overcome growth challenges, noting that Nigeria was among the key beneficiaries of such measures as eliminating the poor product quality of many African businesses by instituting appropriate Quality Assurance Centres and offering Guarantees for facilities given by local banks to Small and Medium Enterprises (SMEs).
The event was chaired by the President/Chairman of Council, Chartered Institute of Bankers of Nigeria (CIBN), Uche Olowu while Ade Adefeko, Vice President, Corporate & Government Relations at OLAM Nigeria and Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI) were on the panel of discussants.