After much deliberation over the potential impact of the African Continental Free Trade Agreement (AfCFTA) on Nigeria’s economy, President Muhammadu Buhari has finally signed the trade pact. The signing took place at the opening of the 12th Extra-Ordinary Session of the Assembly of African Union (AU) Heads of State and Government in Niamey, the Niger Republic.
Nigeria was one of the three of 55 AU member countries holding out on tendering a signature to the trade deal, along with Benin and Eritrea. Pressure from local unions such as the Manufacturers Association of Nigeria (MAN) and businesses had delayed the continent’s largest nation from signing the deal since it was launched a year ago.
The fear was that the removal of trade barriers would hurt infant and uncompetitive industries in the country, and could turn Nigeria into a “dumping ground” for foreign goods. As recent as last month, President Buhari himself echoed these concerns as being the reason for Nigeria’s reluctance to sign the deal.
However, President Buhari with his Benin counterpart, Patrice Talon, signed the agreement on Sunday as they received rapturous applause from the audience, AFP said. And in a change of tone, the President has said that Nigeria will sustain its strong leadership role in ensuring the implementation of the AfCFTA. He made the disclosure in a statement released by his media aide, Femi Adesina, after signing the free trade area agreement.
President Buhari further said that Nigeria will build on the event by proceeding quickly with the ratification of the AfCFTA while he urged “fair trade.” According to the leader, Nigeria wishes to “emphasize that free trade must also be fair trade. As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hardworking population.
In what is considered the largest free trade agreement in any continent in the world, the agreement holds several potentials and implications for businesses, people and economies within Africa. To Prince Adetokunbo Kayode, the President of Abuja Chamber of Commerce and Industry (ACCI), Nigeria signing the AfCFTA “does not in any way expose it to any economic or social hazard,” as the AfCFTA has “adequate and all necessary safeguards against smuggling, dumping and other risks or threats to the internal development of individual countries in the region.”
Trading to commence 2020
As it stands, 54 member countries have now signed onto the deal and with the minimum 22 ratifications required already secured (a total of 27 member states have deposited their instruments of ratification), the operational phase of the agreement kicked off at the summit.
One of the recommendations of the report by Niger’s President Mahamadou Issoufou on the way forward after the kick off was that trading under the AfCFTA should commence on July 1, 2020. The suggestion was adopted by the Heads of State and endorsed by Rwanda’s president, Paul Kagame.
Also, the study proposed that the interest of small-to-medium cross-border traders should be catered for by simplifying trade regimes that apply to them. “We particularly concur on two points. One, the need to cater for small-to-medium cross-border traders, by simplifying trade regimes applicable to them,” Kagame said.
Meanwhile, the Executive Council designated Ghana as the choice to host the AfCFTA Secretariat. This represents a huge win for the West African country after facing stiff competition from the likes of Kenya, Ghana, Senegal, Egypt, Ethiopia, Madagascar, and e-Swatini in the race to host Africa’s free trade zone’s secretariat.
A number of instruments to facilitate the implementation of the agreement was launched at the summit. These include the AfCFTA rules of origin; AfCFTA Trade in goods dashboard; Pan-African Payments and Settlements (PAPS) system; Dashboard of the AU Trade Observatory; an online mechanism for monitoring and elimination of non-tariff barriers as well as AfCFTA mobile application for businesses.