14 December 2018

Nigeria: 'AFCTA Ratification Hinged On Resolution of Modalities for Restricted Goods'

Inability of African Union member-states to address the modalities of the restricted goods under the technical negotiations for the African Continental Free Trade Area (AfCFTA) may be responsible for the stall in ratification of the trade deal.

This insight was revealed at the inaugural Intra-African Trade Fair in Cairo, Egypt.

With members agreeing to liberalise 90 per cent of the identified goods in the continent, there are concerns about the determination of the remaining 10% restricted products, especially as it relates to the HS codes and tariff to be imposed.

Indeed, the Manufacturers Association of Nigeria (MAN) had rejected the ratification of the deal by Nigeria, stating that the sectors/sub-sectors that would benefit or be worse off as a result of the agreement are unknown; no clear-cut recommendation on strategies that government would adopt to enhance the capacity of the manufacturing sector to compete effectively when the deal becomes operational.

According to the United Nations Economic Commission for Africa (UNECA) Executive Secretary, Vera Songwe, though the AfCFTA will help to address Africa's economic challenges and allow for the greater, prosperous flow of trade within the continent, gaps currently remain in the modalities for trade in goods in the AfCFTA.

"What is needed is for our able technocrats and negotiators to see through the vision of our Heads of State, and bring the Agreement to an operative conclusion," said Ms. Songwe in the speech read by UNECA's North Africa Director Lilia Naas Hachem.

"Yet in doing so, let us not cut corners; we must hold fast to the grand ambition behind this project. As we build on the momentum of the negotiations, and the landmark Heads of State Summit in Kigali in March this year, we must ensure that the final touches to the Agreement truly deliver upon the liberalization of our intra-African trade."

In particular, she said, member States have agreed to liberalize 90% of their intra-African trade, but still need to decide how to deal with the remaining 10%.

"Getting the AfCFTA right will entail ensuring that the approach to this remaining 10% is appropriate for boosting trade. Our research at ECA implies that we should be ambitious in these matters, and that not only will a more ambitious outcome boost African welfare the most, but will also see the gains from the AfCFTA spread strongly to many of Africa's smaller and less developed nations," said the ECA Chief.

UNECA analysts estimate that by removing tariffs, the AfCFTA has the potential to boost intra-African trade by over half, and that with the elimination of non-tariff barriers it may be doubled.

"Intra-African trade helps support the livelihoods of the individuals beyond such businesses, but it also extends beyond that to the high goal of poverty reduction economic prosperity, and achieving the ambitions of the Agenda 2063 in realizing an "Africa We Want", as well as the Agenda 2030 of the United Nations, which strives for sustainable development in Africa and beyond," said Ms. Songwe.

"Our work at UNECA suggests that intra-African trade, and the AfCFTA can do just this. It indicates that intra-African trade has a critical role to play in weaning our trade away from its dependence on extractive commodities, and towards value-added and industrial goods that better promote job creation and African industrialization."

The UNECA analysis also reveals that even Africa's smaller businesses can gain, by easing the constraints they face in trading, and helping them link into the regional supply chains of larger companies.

Nigeria

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