Now That Nigeria has Signed the AfCFTA By Ogbu, Blessing Ekpere Esq.
The issue of regional economic integration has always been at the epicentre of regional fraternalisations. This is even prior to the African Continental Free Trade Area becoming a headline issue. These regional fraternalisations find expressions in regional associations such as the Economic Community of West African States (ECOWAS), the Arab Maghreb Union (UMA), the Common Market for Eastern and Southern Africa (COMESA), the Community of Sahel-Saharan States (CEN-SAD), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Intergovernmental Authority on Development (IGAD) and the Southern African Development Community (SADC). These are the regional economic communities recognised by the African Union. In order to deepen greater economic ties among African nations via the creation of vistas of economic cooperation and interactions through trades in goods and services, investments, intellectual property rights and competition policy, the African Union saw the necessity of a common market. The overall objective is to create a viable economic hub where African countries can harness their huge market potentials not just to create wealth, but also to improve their respective balances of trade and strengthen their positions in relation to other nations of the world.
It is against this backdrop that African leaders came together in Kigali, Rwanda between 18th March 2018 and 21st March 2018 to formalise a process which began several years ago. The highpoint was the signing, on the 21st of March 2018 of the AfCFTA formal document by 44 out of 55 member-nations of the African Union. Nigeria was one of the nations which demurred in signing the Agreement then. Nigeria’s concern was anchored on the fear that the Agreement may impede the Nigerian government’s efforts towards revamping and strengthening the nation’s indigenous industries.
By virtue of Article 23, The AfCFTA shall come into force 30 days after its ratification by 22 of the signatory-nations or the deposit of the instrument of ratification by the 22nd nation. The Gambia ratified the Agreement on the 2nd of April, 2019 while on the 29th of April, 2019, Saharawi Republic became the 22nd nation to deposit its instruments of ratification. The Agreement, thus, came into effect on the 30th of May, 2019. The 12th Extraordinary Summit of the African Union on the AfCFTA which held in Niamey, Niger Republic on the 7th of July, 2019 was to iron out outstanding grey areas regarding the first phase of its operation.
Further, this Summit held special signification because Nigeria eventually executed the Agreement, thereby becoming the 53rd member of the African Continental Free Trade Area.
What, then, are the benefits which accrue to members of the African Continental Free Trade Area? The obvious benefit, of course, is the eventual annihilation of tariffs, or progressive reduction of tariffs on over 90% of goods manufactured on the continent and the removal of non-tariff barriers to trade. The other benefits can be seen in the Preamble and Article 3 of the Agreement and they include the provision of a continental market with the free movement of persons, capital, goods and services, deepening of economic integration, promotion of agricultural development, food security, industrialisation and structural economic transformation. Others include the availability of an expanded and secure market for the goods and services of State Parties which is made possible through adequate infrastructure and the elimination of tariffs and non-tariff barriers to trades and investments. It is expected, therefore, that there will be free flow of commodities, goods and services in the free trade area which is the largest since the World Trade Organisation came into being in 1994 via the Marrakesh Agreement. According to statistics available from the United Nations Economic Commission for Africa, trade in the free trade area is expected to boost intra-African trade by 52% by 2022. A successful AfCFTA will create a $3.4 trillion economic hub which, expectedly, will herald an era of unprecedented development on the African continent.
Now, that Nigeria has signed the treaty, certain things need to be done. First, Nigeria must deposit her instrument of accession with the Secretariat of the AfCFTA. The deposition of this instrument will complete the process of making Nigeria a party to the treaty and, as a consequence, bound by the provisions and terms of the treaty. Further, Nigeria will be required, by virtue of section 19 of the CFRN 1999 as amended to give effect to international treaties to which she is a party. To this end, therefore, President Buhari, on 28 July, 2019, approved the establishment of a National Action Committee (NAC) for the implementation of the AfCFTA.
Second, Nigeria must rejig her security apparatus and intensify her efforts towards improving her security situation. No nation which is gripped in the vice of insecurity prospers. Insecurity and economic prosperity are mutually exclusive. Apart from its destructive aftermath, insecurity deters investors from a nation. Nigeria must therefore get its security situation right.
Third, if we must compete favourably in the extant global economic order, Nigeria must see this AfCFTA as a challenge to rehabilitate its dysfunctional infrastructures in double quick time. The roads must be rehabilitated. The power sector must be restored. The energy sector must be revitalised. The urgency must, perforce, be extended to the indigenous industries. No doubt, Nigeria’s hesitation in signing the Agreement is an upshot of years of successive decay of national infrastructures – a valid point because without a local vibrant and functional industrial hub Nigeria cannot hope to compete favourably with other nations.
Fourth, the AfCFTA is an agglutination of three Protocols: the Protocol on Trade in Goods, the Protocol on Trade in Services and the Protocol on Investments, Intellectual Property Rights and Competition Policy. In its first phase, the AfCFTA will focus on the Protocols for Trade in goods and services and dispute settlement rules. In its second phase, the AfCFTA will cover competition, investment and intellectual property rights. Nigeria, according to the latest statistics from the National Bureau of Statistics (NBS), is a nation of over 192 million people.
What this suggests is that Nigeria is rich in human capital. What this then translates to in the context of the AfCFTA – and, indeed, any context for that matter – is that Nigeria has the capacity to harness to her advantage the potentials of the trade in service under the Protocol on Trade in Services and the Protocol on Investment, Intellectual Property Rights and Competition Policy. What Nigeria has to do is to invest in human capital development so that her professionals can compete favourably with professionals from other parts of the world.
Lastly, but by no means less important, Nigeria should review all her extant laws which relate to business in Nigeria. These laws must necessarily include all laws relating to taxation. The labyrinth of laws which an investor is required to traverse is overwhelming. Of course, this mangle of laws create in its wake a bureaucratic bottleneck which discourage investors. Investors may therefore be inclined to take advantage of this AfCFTA and invest in nations which have tolerable legal regimes and conducive business climate and ship their finished products to a country like Nigeria which has a large market. When Nigeria becomes an industrial nation as against its present reputation as a consumer nation, the perennial economic problem of unemployment will be solved. It is a good thing that Nigeria is working assiduously on its policy of ease of doing business in Nigeria as can be seen from a number of Executive Orders signed by the President and the recent amendment of the Companies and Allied Matters Act, the principal legislation regulating the business environment in Nigeria. More, however, need to be done.
With Nigeria becoming the fifty-third nation to sign the Agreement, it is hoped that the Nigerian government will see the urgency in addressing the concerns raised above. The result will be a robust economy, massive job creations, an increase in Nigeria’s gross domestic product, an improvement in her human capital development index, an enhanced standard of living which is a direct consequence of increase in per capita income, and an overall improvement in the nation’s life expectancy.
The signing of this Agreement should therefore be a clarion call on the Nigerian government to make Nigeria an investment destination of choice.
Ogbu, Blessing Ekpere Esq., a legal practitioner, writes from Abuja.
Win your Court cases today, Get Affordable Supreme Court Law Reports >> CLICK HERE
BESTSELLER: Get A-Z of contemporary laws of ELECTRONIC EVIDENCE in Nigeria By Alaba Omolaye-Ajileye. To ORDER, sms or call : +2347063666998, +2348159307051 or email email@example.com
Call 07044444777 or 08181999888. Visit our website: www.alexandernigeria.com/