The African Export-Import Bank (Afreximbank) has approved a $500 million facility to aid Nigerian manufacturers in taking full advantage of the African Continental Free Trade Agreement (AfCFTA).
During a luncheon organized by the Manufacturers Association of Nigeria (MAN) this week, the bank’s President and Board Chairman, Prof. Benedict Oramah, announced his decision to support manufacturers in the country.
Prof. Oramah who was the guest lecturer at the forum revealed that the facility is expected to help manufacturers improve their product offerings and retool their operations with a view to enable them to compete against other products in Africa and globally.
In his presentation titled, From Commodities to a Global Manufacturing Hub: The Road Ahead for Nigeria, Oramah explained that with AfCFTA coming into force, Nigeria would derive benefits from the agreement based on how prepared the country is.
For instance, the Nigerian government should be participating actively in the negotiations such as the rule of origin while working to address infrastructural development, fix the micro-economic policies and improve access to market and finance, so it can enjoy the trade agreement, the bank chief stated.
The significance of the facility is even more evident considering one of the reasons that stalled the signing of the AfCFTA by President Muhammadu Buhari was the concern over the inability of Nigeria’s local industry to compete with counterparts in other African countries. If properly deployed, the fund could help position the local manufacturing space to maximize opportunities that will come with the trade agreement.
“It is our view that for Africa – and certainly Nigeria to achieve beneficial free trade, we must significantly improve the value-chain in our manufacturing sector,” the President of MAN, Engr. Mansur Ahmed said the event. “This is the most assured route to achieving competitiveness, enhancing job creation and lifting the vast majority of our people out of poverty.”
The AfCFTA will be implemented in 2020. Among other objectives, the agreement seeks to create a continental trade bloc of 1.2 billion people, with a combined Gross Domestic Product (GDP) of about $3 trillion.
More so, the deal looks to promote key indicators such as regional integration through increasing intra-African trade; removal of import tariffs on 90 percent of goods; economic growth and development; and poverty reduction in partnering countries.
Apart from the facility granted to manufacturers in Nigeria, Afreximbank is also instituting a $1 billion Adjustment Facility to mitigate the effects of the AfCFTA. This is to enable participating countries to adjust in an orderly manner to sudden significant tariff revenue losses resulting from the implementation of the agreement.