Africa, a continent of 55 countries that can boast of over $2.6 trillion in combined GDP, and having 54 countries signing up to the African Continental Free Trade Agreement (AfCFTA) and just 33 of them ratifying the signed agreement, what becomes next of the West African sub-region now that the president of Ghana, Nana Addo Dankwa Akufo-Addo has handed over the AfCFTA permanent secretariat to the African Union on Monday, 17 August 2020? Does it mean that business will not commence on January 1, 2021, considering the fact that Nigeria, the largest economy in Africa, is yet to ratified the agreement? Though, Nigeria is not excluded from business activities under the AfCFTA.
John Isemede, a trade expert and a former director-general of the Nigerian Association of Chamber of Commerce Industry Mines and Agriculture (NACCIMA), whose interview with Business A.M. are published in the following pages, said Nigerian was a systemic important country in the world: “First and foremost, we should realize that Nigeria is the hope of the black race and also the landlord of the ECOWAS secretariat, which has been handled for 45 years with no achievement recorded. Nigeria has the ECOWAS secretariat and Ghana has the AfCFTA secretariat. If we do not communicate, cooperate, and coordinate activities in the West African sub-region, it will be a mirage,” he said.
In terms of Nigeria’s readiness to sign the agreement, Isemede explained that a critical look at Nigeria’s position cannot be done outside of ECOWAS’s protocols on the free movement of goods and services, with the agreement they have on the Free Trade Area (FTA), as well as the Custom Union that they are heading into and a common market. According to him the free trade area plus the common external tariff (CET) will give you a custom union, adding that ECOWAS cannot be going into a customs union and we say Nigeria is not prepared.
“In Africa, there are 8 economic blocs, and if narrowed down, we have 5 – North Africa, East Africa, Southern Africa, Central Africa and West Africa blocs. Within the southern and eastern African blocs, we have COMESA, SADEC and SACU. However, our focus on the AfCFTA will be on the area of ECOWAS,” the trade expert stressed.
According to him, “North Africa to Morocco, Egypt is prepared and close to the European Union, East Africa is prepared and is close to the Asian block, and Southern Africa is more industrialized. So we need to firm up the common market which is the second stage of integration in West Africa”.
How AfCFTA arrangement came into play?
The AfCFTA started in 1957 when the European Union was also being set up with only six members at the time. But today, the AfCFTA is the biggest with 54 members at the commencement. However, the main objectives of the continental trade agreement is to create a single continental market for goods and services, with free movement of business persons and investments, and as the minorities with a full house of government officials not promoting trade.
Meanwhile, Nigeria signed in Niamey but is yet to confirm her signature to the agreement. On what grounds has Nigeria not put her signature down to become a member of the free trade agreement? As experts put it, “it simply is the result of [having] no export strategy, her foreign policy not tied to trade and lack of trade records”.
Trade experts believe that while the largest contributor to the ECOWAS GDP will ratify the agreement, it has work to do fixing certain things, as well as other personal services in the frontline, and not the MDAs.
Another bottleneck that has been identified is the failure to make public the terms of reference, as there was nothing to be gleaned on what to export outside Nigeria, instead it is believed that they were moving from one end of Nigeria to another looking for foreign markets from within.
This formed part of what led to Nigeria’s refusal to join others in Kigali in March 2018, as it was not a tea party, given that some countries were in Rwanda in their national airlines (Nigerian airlines and NNSL were liquidated and export now uncompetitive).
Still some major issues on the agreement
The African Continental Free Trade Agreement was designed for the economic integration of the continent, but as Nigeria has not ratified as of July 2020 still shows that the lack of expert committee on it is a major bone in its throat. On the flip side, there is no made in Nigeria products identified to engage or compete at the kick-off of the free trade arrangement. No market research appears to have been carried out by the MDAs as the target markets for made in Nigerian products at kick-off.
According to Isemede, “We are in a country with foreign policy but no foreign policy strategy. Our foreign policy is not tied to trade. If it was tied to trade, our exploits in Zambia, South Africa, Liberia, and Sierra Leone; today we would not need to sign as people will beg for our participation. America will not leave America to other places without tying it to trade”.
It was when it became obvious that Nigeria could not sign the Kigali agreement that it was taken to Niger. According to the trade expert, Nigerians who went there, as a result of no national carrier resulting from the no bilateral air agreement, flew to Togo, from Togo to Abidjan, then to Mali and finally to Niger.
“If I am to take back my job as export manager in any of the companies in Nigeria, will I be routing my functions in that way?” Isemede asked.
He said Nigeria made a mistake by not using the ECOWAS template, developed by it, adding that recent work must be carried out outside this country.
“What led to the delay in signing was the committee set up by the government because the committee comprises of non-business oriented individuals who have never crossed the borders or ports before and they are neither importers nor exporters,” the former NACCIMA boss said.
While grappling with the situation on ground, ECOWAS remains the least developed sub-region on the continent. This is the time, from Senegal to Nigeria, we have to work together and be able to achieve the customs union, which will now dovetail into a single market, the dream of the AfCFTA.
What next for Nigeria and other W/African nations?
Nigeria was the first to be approved in 1961 for cross border business and Lagos alone had more than 3000 industries as at then. But now, she has the opportunity of taking Africa as a captive market. Also, Ghana getting the secretariat does not mean that Ghana laboured more than others. It was as a result of the foundation laid by Kwame Nkrumah to Ghana’s independence in 1957 – The integration of Africa and industrialization of Ghana.
John Isemede, speaking with Business A.M., highlighted some steps to help ameliorate the failing system in Nigeria as well as citing the need to engage experts and professionals.
“Now that our policies have crumbled the system, we won’t give up because we have experts. We want to implore the government, because we have experts, professors in Nigeria. In AfCFTA, professors have not been engaged. Private sectors that ought to be at the back now sit at the edge of the table to sign papers,” he said.
On the way forward, the trade expert said, the closure of borders negates all agreement under ECOWAS. The closure of the border has revealed a contrary reason to the government’s claim. An instance is the Nigerian naira which traded for N306 to the dollar before the border closure but now trades at over N440 during the closure.
Besides, Nigeria has neither airline nor shipping line, and so border closure should be halted. Therefore, we should know the type of borders we have with our neighbours. If a population of 200 million cannot manage a border of less than 5000 km, then we should desist from complaints on ECOWAS action, he said.
Fundamentally, the capacity building of personnel, as well as the building of linkages between the universities, the private sector and the government, will be a start off point to achieving success with the agreement. For AfCFTA to succeed there must be a monitoring and evaluation mechanism.
Today, Isemede said, the only way we can still gain the naira is to key into the AfCFTA. Did the President just promise 10 million jobs per year? Well, the only way to provide the jobs is to build linkages in agriculture. This is not the ICT, air business or technology. ECOWAS should come together cooperatively to be able to compete against the likes of North Africa, east, central and southern Africa.
The AfCFTA office is now opened in Ghana with the whole world watching to see how Nigeria and ECOWAS will navigate establishing a Customs Union, which will dovetail into a single market. Nigeria is at the centre of all the activities whether it has signed or not signed to the agreement.
“We have to put our acts together and use the maximum support based on the template we used to run the ECOWAS now in the ECOWAS office, based on our research, while looking for import and export revolution in all the 16 countries, plus Chad and Cameroon,” he emphasised.
Frontpage February 19, 2020