Private sector prompted Nigeria’s refusal to sign AfCFTA

Reports emerged that Nigeria’s refusal to
sign the African Continental Free Trade Area Agreement (AfCFTA) during
the March 21 Kigali was prompted by organised private sector.

 

Forty four out of 55 African leaders signed the AfCFTA at an Extra-ordinary Summit of the AU Assembly in Kigali.

 

Nine other AU members, including Nigeria and South Africa delayed accent to the treaty.

 

The Nigerian Office for Trade
Negotiations has however said that Nigeria is almost ready to sign the
African Continental Free Trade Area Agreement.

 

The private sector, reports say was
worried by what it calls the absence of a study to determine the impact,
benefit and downside of the agreement, among others.

 

 

Mr Chikodi Okerocha, an editor with the
Nations writes after an interaction with the Director General/Chief
Negotiator, Nigerian Office for Trade Negotiations (NOTN), Ambassador
Chiedu Osakwe,
 

 

Osakwe’s expertise in trade policy and negotiations is widely acclaimed.

 

Prior to his appointment as Director
General/Chief Negotiator, Nigerian Office for Trade Negotiations (NOTN),
Ambassador Chiedu Osakwe,
 was Trade Adviser at the Ministry of Industry, Trade and
Investment, where he provided technical advice on trade policy and
structural reforms to the Federal Government.

 

He was also a diplomat in the Ministry of
Foreign Affairs, during which he served at the Permanent Missions of
Nigeria to the United Nations (UN) and other international organisations
in New York and Geneva.

 

Educated at the University of Ibadan
(Nigeria), Oxford (United Kingdom) and New York University, from where
he obtained his PhD, Osakwe is also an Adjunct Professor on a leave of
absence from the International University in Geneva
on International Trade Policy, Diplomacy and Negotiations.

 

With such intimidating resume and wealth
of experience, Osakwe’s charge at NOTN, where he is expected to
coordinate the formulation of a cohesive negotiating strategy for
Nigeria especially in the controversial African Continental
Free Trade Area (AfCFTA) agreement, ordinarily, should be easy.

 

But it is doubtful if his efforts at NOTN
to harvest interests and concerns of various stakeholders and actors on
trade and turn them into technical positions and national agenda at the
negotiation tables are enjoying a smooth
sail.

 

Already, there are indications that NOTN,
which was established by the Federal Government in May, last year, as
the standing negotiating body for Nigeria, may not be on the same page
with members of the Organised Private Sector
(OPS) especially the Manufacturers Association of Nigeria (MAN) with
regards to Nigeria joining the AfCFTA.

 

The Nation learnt that convincing the OPS
to endorse the controversial trade liberalisation deal appears to have
remained a hard nut to crack for the renowned international diplomat.
The deal may have become a hard sale to the
OPS.

 

AfCFTA, as adopted by the 18th Ordinary
Session of the Assembly of Heads of State and Government of the African
Union (AU) in Addis Ababa, Ethiopia, in January 2012, was designed to
create a continental trade bloc of 1.2 billion
Africans, with a combined Gross Domestic Product (GDP) of about $3
trillion.

 

The agreement was seen as an important
milestone in promoting Africa’s regional integration and helping to
increase intra-African trade, which was about 17 per cent, by more than
52 per cent, worth about $35 billion yearly.

 

AfCFTA commits African countries to
phasing out tariffs on 90 per cent of goods, with 10 per cent of
“sensitive items” to be phased out incrementally.

 

 It will also liberalise trade in services, while also signaling a step towards building strong regional value chains.

 

Forty four out of 55 African leaders
ratified the AfCFTA at an Extra-ordinary Summit of the AU Assembly in
Kigali, Rwanda, on March 21. Nine other AU members, including Nigeria
and South Africa delayed accent to the treaty.

 

President Muhammadu Buhari was earlier
scheduled to travel to Kigali to ratify the trade deal, which is easily
the largest trade agreement since the World Trade Organisation (WTO) in
1994. But he backtracked on the opposition
of the OPS who said they were not consulted.

 

Specifically, the OPS decried poor
preparations, lack of consultations, and non-inclusion of inputs by key
stakeholders as regards market access and enforcement of rules of origin
as major reasons why signing the agreement will
jeopardise the nation’s economy.

 

Consequently, the president, on March 27,
set up a committee to review the CFTA framework agreement. The
committee has since swung into action to strengthen its consultations
with critical stakeholders and determine how various
sectors of the economy will benefit from the proposed agreement.

 

The committee is said to have explained
to the various stakeholders the contents of the 250-page document, which
some of them did not read. It has also been working assiduously to
allay the fears of the private sector, specifically
on issues dealing with the particular tariff lines that shall be
liberalised.

 

“What we are doing is to establish a
technical working group on goods market access, consisting MAN, Ministry
of Finance, National Bureau of Statistics, NACCIMA. We asked MAN to
give us the list of products they would like to
see in the 10 per cent. They have sent since last May 11.

 

“In other words, everything MAN asked to
be included in the exclusive and sensitive list (10 per cent not for
liberalisation) has been done,” Osakwe told reporters, in Abuja.

 

 

Manufacturers fault NOTN, renew opposition

 

However, with regards to its ongoing
consultation with critical stakeholders particularly manufacturers,
NOTN, which is the institutional framework and foundation for Nigeria’s
trade policy infrastructure, appears not to be on
the same page with the OPS.

 

Indications to this emerged at last
month’s 51th Annual General Meeting (AGM) of the Ikeja branch of MAN. At
the AGM, which held in Lagos with the theme: “African continental free
trade agreement: Impact on the Nigerian manufacturing
sector.”

 

At the AGM, Jacobs emphasised that as a
concept and in principle, MAN was not against the AfCFTA, reiterating
that the association’s original contention was that the NOTN did not
undertake adequate consultation with relevant stakeholders.

 

The MAN president said although, that is
being done now, “We still have the big issue of the absence of a country
specific study to determine the possible impact, benefit and downside
of the Agreement on the Nigerian economy in
general and the manufacturing sector in particular.”

Continuing, Jacobs charged: “We hasten to
observe that the NOTN version of the outcomes of the stakeholders’
engagement and sensitisation, as reported in the news media, does not
adequately reflect the overall proceedings and
factual expressions at those meetings.”

 

He, therefore, said MAN was worried that
“This could be misleading and, more importantly, may not put Nigeria in
good stead and could inexorably put the nation in a disadvantaged
position under the AfCFTA.”

 

Jacobs in his address at the AGM held on
Thursday, July 19, assured that MAN will continue to engage the NOTN and
the Federal Government to ensure that the concerns of manufacturers are
addressed.

 

 “We are adequately
represented at the negotiations that may ensure, if and when Nigeria
decides to sign on to the AfCFTA,” he said.

 

He described the theme of the AGM as
“Quite apt,” considering the level of high inventory and unemployment in
the country and the efforts of real sector operators to reposition
themselves in the post-recession era.

 

Recall that a groundswell of opposition
by MAN and other OPS members, such as Nigeria Association of Chambers of
Commerce, Industries, Mines and Agriculture (NACCIMMA), labour
movement, particularly the Nigeria Labour Congress
(NLC) had trailed the AfCFTA.

 

Manufacturers have been the most
vociferous in the campaign, which has now gained momentum, with Jacobs
expressing worries that the agreement will open the floodgate for the
influx of the European Union (EU) and other foreign
goods into the local market and turn the country into a dumping ground.

 

According to him, the Rules of Origin
(ROO) in the AfCFTA cannot be adequately enforced to guard against the
influx of goods into the Nigerian market.

 

The ROO are used to determine the country
of origin of a product for the purpose of international trade. But,
Jacobs fears that the ROO cannot be adequately enforced because goods
from the EU can find their way into one of the
African countries that have bilateral agreement with the EU.

 

He also said the agreement’s market
access was a concern to manufacturers as it leaves low protection to
locally produced goods. “The agreement says that 90 per cent of the
tariff plan would be liberalised, leaving only 10 per
cent to protect manufacturers. That 10 per cent is too low,” Jacobs
said.

 

The alleged lack of inputs of critical
stakeholders in the proposed agreement also did not go down well with
the OPS. They argued that ordinarily, proponents of the trade document
ought to have consulted all relevant stakeholders
because of its likely implication on the economy.

 

While the OPS noted that intra-African
trade could bring economic benefits to member states, they insisted that
there should be broad consultations and participations in the AfCFTA
negotiations. This, according to them, was necessary
to avoid “pitfalls of past trade agreements, which turned to be more
devastating and negative.”

 

These were some of the concerns that
forced down the hand of President Buhari to boycott the Extra-ordinary
Summit of the AU Assembly in Kigali, Rwanda, on March 21, where 44 out
of 55 African leaders ratified the AfCFTA.

 

However, both the committee to review the
CFTA framework agreement, and the NOTN to undertake consultations with
critical stakeholders, appear not to have been able to convince the OPS
on the benefits accruing from the agreement
to the economy generally and the manufacturing sector in particular.

 

The OPS has kicked its heels in,
insisting that the NOTN undertake a wider stakeholders’ consultation for
a holistic analysis of the impacts of AfCFTA to the Nigerian economy,
and to do specific study to determine the possible
impacts of the trade liberalisation deal to the economy and the
manufacturing sector.

 

The Nation, however, learnt that beyond
the fears expressed by real sector operators, is the more critical issue
of lack of infrastructure. The dearth of supportive infrastructure is
said to have put fears of competitive disadvantage
in the minds of Nigerian manufacturers against their counterparts from
other African countries.

 

At the core of the infrastructure deficit
that has put fear in manufacturers is the lack of steady and reliable
electricity supply, which is a key factor in the cost of doing business. 
“We need to intensify efforts in what government is doing across
the board to ensure predictable cost effective power supply,” Osakwe
said.

 

He noted that on the enabling environment
for business, a lot of progress has been made as registered in the 2017
World Bank report, where Nigeria went up 24 places and in the top 10
reforming countries in the world, “A lot still
needs to be done to scale-up, deepen, and intensify.”

 

Another long-standing issue agitating the
minds of members of the OPS was the need for more effective border
controls. Some of them insisted that Nigeria should be able to close and
open her borders whenever she wants.

 

While some of the issues and concerns of
the OPS are not for NOTN to resolve, what is not in doubt is that there
has been significant nationwide support for Nigeria to go ahead with the
agreement initiated by the AfCFTA.

 

However, the consensus of various
interest groups is that the pace of work by government, in partnership
with the private sector, should be accelerated with regards to this
range of long standing issues.

 

 

Source: Nation

http://thenationonlineng.net/africa-free-trade-deal-why-manufacturers-are-adamant/