As Africa warms up to implement the African Continental Free Trade Agreement (AfCFTA) , the National Association of Nigerian Traders (NANTS) has warned that it would increase unemployment among farmers and farm workers.
The warning is contained in a communiqué issued in Abuja at the end of its National Validation Workshop on the study of conducted by NANTS on articulating Nigeria’s Agricultural Trade Strategies for the AfCFTA.
The communiqué signed by the President of NANTS, Barrister Ken Ukaoha, explained that the study examined the effects of the tariff cuts phases on Nigeria’s agricultural output, investment and employment of manufacturing products/industries earlier classified by initial tariff levels as 5%, 10% and 20% under two scenarios.
According to the communiqué, “The change in domestic outputs for all the three broad sub-sectors is negative and as high as between -14.5 per cent and -49.9 per cent in two sectors.
“Significant changes in employment that cut across all the three broad sub-sectors were estimated in the two scenarios ranging from -1.51 per cent -5.9 per cent.
“Thus, the implementation of the AfCFTA implies increase in unemployment of farmers, farm workers and other associated workers.
“The simulation also shows reduction in investment in the agricultural sector across all the sub-sectors for all the scenarios, and is as high as -7.61 per cent for vegetable products.
“This is worrisome given that the sector is currently constrained by lack of investment, thus suggesting that implementation of AfCFTA would virtually wipe off the current meager investment in the sector.”
While acknowledging that the signatures to the AfCFTA have increased from 44 to 52, with only three African countries remaining, the participants however were of the opinion that the fact that Nigeria has not yet signed was for the good reasons.
“The workshop took note of the fact that the signatures to the AfCFTA have risen from 44 to 52, with only 3 African countries remaining.
“For the ECOWAS region, 13 of our 15 Member States have so far signed the AfCFTA Agreement and 8 (out of 21 ratifications so far) of our Member States have also ratified the Agreement.
“Only Nigeria and the Republic of Benin are the only Member States of ECOWAS yet to sign the AfCFTA.
“Participants however, were of the unanimous opinion that the fact that Nigeria has not yet signed is for the good reasons.”
The communiqué further noted that” attractive objectives of the AfCFTA are contingent upon some major/critical factors, namely: the need for massive cuts on customs duties, which is a major source of government revenue especially for a country like Nigeria, and the need for the simplification and or removal of all bureaucratic procedures, tariff and non-tariff barriers along the border points and corridors.
Another factor is “the imperative of government’s huge investment in road, rail, air, digital and financial infrastructure.
“Therefore, the need for effective, adequate, strategic and inclusive preparations for the negotiations through quantitative costs-benefits analysis, empirical and evidence-based approach to plot the future of the country in the AfCFTA implementation becomes imperative.”
To deal with unemployment induced by liberalisation, participants called on Government to place strong emphasis on policies that enhance education quality, job market information, re-training opportunities for the upgrading of skills and the acquisition of new skills; to enhance job search through employment services which offer job placement information, interview training, career guidance and counselling.
The participants noted that schemes like unemployment insurance, income support programmes, mandatory saving schemes, minimum wages, and compulsory severance payments should be available to deploy to intended effect of trade liberalisation.
“The Nigerian government needs to evaluate to determine their appropriateness, effectiveness, and affordability for envisaged AfCFTA adjustment costs.
“Similarly, Government has the responsibility for instituting social safety net in order to help smoothen and alleviate the effect on the labour force and related issues.
“Social protection expenditures to cushion the negative effects of trade liberalization will be required and need to be upscaled.
“To ensure the effective implementation of the AfCFTA, participants urged the Government to establish mechanism for developing a national AfCFTA strategy in the form of a standing National Action Committee on AfCFTA Implementation Strategies (NACAIS) with mandates to recommend adjustment costs compensation, technology and know-how access, research and development (R&D) subsidization, export market strategies, AfCFTA rules of origin, skills development, business environmental reforms including AfCFTA Country Business Index, AfCFTA impact monitoring and evaluation, among others.
“In addition, the need for significant public investment to cooperate in the formulation and enforcement of continental Rules of Origin (RoO) to forestall trade deflection, institutionalisation of contingent protection measures and implementation of the trade facilitation agreement (TFA), was emphasised.”