By Samson Echenim
Amy Jadesimi, manager of the Lagos Deep Offshore Logistics Base (LADOL), has called on the Nigerian government and governments of other member nations to make the African Continental Trade Agreement (AfCTA) a mechanism for local industrialisation.
As Africa’s largest economy, most-populous country, biggest crude producer and cultural powerhouse, Nigeria has long been seen as essential to any pan-African deal, which has had broad support among business leaders across the continent. But President Muhammadu Buhari, a protectionist at heart, heeded calls from his country’s labour and manufacturing trade groups to study the deal’s effects before signing.
According a statement by Olakunle Kalejaiye, the company’s spokesman, Amy Jadesimi is one of the few among Lagos’s business elite to support Buhari’s deliberative approach because, she says, of how important the deal is.
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“We need a continental-focused solution that is developed by the African Union, and targets making the trade agreement a mechanism for local industrialisation,” Jadesimi, told Financial Times in an interview, according to the statement.
“That should be the aim of this trade agreement, rather than just something broad and high level about economic growth or prosperity — those things won’t come if, underlying all of this, we do not create jobs and lift our economies through industrialisation,” she noted.
Supporters argue that the Africa Continental Free Trade Area (AfCFTA) has the potential to spur economic growth in a bloc of nations with a combined gross domestic product of more than $3 trillion, creating the world’s largest free trade zone.
But major challenges remain, and sceptics such as Jadesimi argue that any pact must offer incentives to boost African manufacturing or it will fail — an outcome that could turn the continent into a dumping ground for cheap Chinese, US or European goods.
“Are we going to create an entirely new paradigm for trade, that is Africa-centric, that is controlled by African countries, and that dis-incentivises foreign companies and countries outside of the continent from importing — are we going to do that? That’s going to be really tricky, ” manager of the Lagos-based industrial free zone said.
The African Union summit in Niger in July was a landmark moment for the pact whose roots stretch back decades. Although the deal officially came into force on May 30, the implementation of any final agreement is at least three years away and specifics on everything from rules of origin to intellectual property must be agreed between a diverse group of largely fragmented economies.
The agreement must also contend with a history of regional trade agreements that have largely flopped and done little to bolster trade integration — the AfCFTA will need to be harmonised with eight such regional pacts.
Beyond the issue of whether the costs of an open market outweigh the benefits to specific countries, there is also the question of whether it is possible for Africa to overcome its structural challenges to trade.
The agreement aims to remove 90 per cent of tariffs to create a single market with free movement of goods and services. However, sceptics question how under-resourced governments — newly deprived of that tariff revenue — will be able to afford to upgrade poor infrastructure.