Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, wednesday said Nigeria's neighbours must comply with fair trade practices to avoid depriving Nigeria the benefits of African Continental Free Trade Area (AfCFTA) agreement, explaining that the country would prevent itself from becoming a dumping ground for goods that did not originate from Africa.
Emefiele, who was represented by the Lagos Branch Controller of CBN, Mr. Ekhator Atise, spoke in Lagos, at the 2019 International Trade Seminar, with the theme: 'Non-oil Export in Nigeria, Emerging Opportunities, Financing Options and African Regional Trade Integration,' that was organised by Zenith Bank Plc.
Also at the event, the federal government reiterated the importance of the Nigerian private sector to the successful implementation of AfCFTA agreement, which will come into force from July 1, 2020.
The position of the federal government was conveyed by the Minister of Industry, Trade and investment, Chief Adeniyi Adebayo, who said Nigeria did not need to look beyond the recent recession to understand the urgency for the government to grow and diversify the country's economy in order to develop new sources of export revenues.
Emefiele said it was imperative that all stakeholders supported the growth in the physical industry that would help insulate the economy from external headwinds.
He added that supporting the growth of the real sector needed to improve non-oil exports as a viable alternative that would help the country to project better growth and create jobs for the teaming youths and the nation, had become imperative.
He expressed optimism that the continental free trade agreement was going to be fruitful for Nigeria and would enable Nigerian manufacturers to access other markets within the continent.
Emefiele, however, stressed the need for all parties to engage in fair trade.
"If the agreement is going to be of value to our country, the situation where other countries and goods are on transit point to enable a type of subsidised imports in Nigeria which harm our local farmers and industries cannot and should not be tolerated. All parties must work to encourage fair trade in order for the gains of AfCFTA to be achieved.
"The CBN will continue to implement policies that will enable improved domestic productivity and further the growth of non-oil exports in Nigeria as a more diversified economy is crucial in promoting stable growth and in creating job opportunities on a wider scale and it would also help to improve our non-export earnings thereby protecting our economy from the volatility of the crude oil market," he added.
He stated that for a country with close to 200 million people, the emphasis on non-oil exports was due to the potential gains that would be made when human and natural resources are harnessed in creating new products and services that could be produced in large scale and sold to people in various parts of the world.
Adebayo, who was represented by the Special Assistant to the President on Public Sector, Mr. Francis Anatogu, said Nigeria did not need to look beyond the recent recession to understand the urgency for the government to grow and diversify the country's economy in order to develop new sources of export revenues.
Adebayo said: "The private sector has a critical role to play in the drive to grow non-oil export and in the implementation of the AfCFTA.
"There is a need for a paradigm shift in the way we do business, for us to unlock the country's export trade opportunities."
According to him, there was need for the private sector to defend their share of the domestic market and to expand their market share in Africa.
"Also, you need to evolve ways of building networks with businesses and governments in African countries of interest in order to effectively execute these strategies.
"In addition, it is important to evolve effective partnership with government on how to realise the projects that will make the country ready for the AfCFTA by identifying specific programmes and initiatives that government should prioritise to fast-track non-oil export and enhance our readiness for AfCFTA," he told his audience.
Furthermore, the former Governor of Ekiti State, noted that the long-term outlook for oil and gas was uncertain, given the global drive to reduce the use of fossil fuel in order to tackle climate change as well as market disruption created by shale oil and gas, which has moderated oil prices.
He pointed out that already, other major oil and gas producing countries have started shifting their economies away from oil.
He noted that the President Muhammadu Buhari's administration has been using the Economic Growth and Recovery Plan (EGRP), which was developed in the first term of the administration, to prepare the country to withstand the challenges that would come with the implementation of the AfCFTA.
The EGRP is focused on restoring growth through macro-economic stability and economic diversification with emphasis on agriculture, energy, and MSME led growth in industry, manufacturing and key services.
"The plan also focused on building a globally competitive economy through investment in infrastructure and improving the business environment. In these areas, a lot has been achieved and several projects are at various stages of implementation.
"Government also recognises the need to promote export trade to assure markets for our manufactured products and for our services. To manage our balance of payments as we diversify our economy, we must therefore grow non-oil export to counterbalance our current dependence on imports for quality inputs and capital."
The minister observed that one of the key risks associated with AfCFTA was the potential rise in smuggling and abuse of rules of origin, saying it would inadvertently incentivise rogue traders to disguise and distribute goods imported from outside the continent as duty free made-in-Africa goods.
"It is also envisaged that without adequate provisions for adjustment costs, the surge in import that would arise with AfCFTA will likely threaten output, jobs and investment in the manufacturing sector and in local infant industries.
"While these conditions and threats indicate that a lot must be done to prepare Nigeria to achieve the envisaged benefits of the AfCFTA, it is also worth knowing that Nigeria is not at ground zero in terms of readiness.
"In this regard, AfCFTA complement Nigeria's national development agenda as it offers Nigerian products and services, preferential access to the huge African market. As you may know, currently, Africa sources over 85 percent of its products imports from outside the continent.
"It also provides immense export opportunities for made-in-Nigeria finished products as trade on 97 percent of tariff lines will be conducted at zero duty, when liberalization kicks in.
"The new supply capacity that will result from producing for export to Africa will deepen both forward and backward linkages and grow domestic and regional value chains, in line with government's backward integration agenda."
On his part, the Group Managing Director, Chief Executive Officer Zenith Bank, Mr. Ebenezer Onyeagwu, identified the escalating trade uncertainties as the biggest risk to the future of the global trading system that could cause the slowest pace of growth of the global economy since the 2008-2009 financial crises.
Onyeagwu said: "The synchronised economic slowdown and volatility in commodity prices have continued to underscore the vulnerability of our weighty dependence on crude oil as a major source of foreign exchange earnings.
"These developments have prompted an awakening and introspection among policy makers and key stakeholders in our country on the need for accelerated economic diversification and the search for alternative revenue sources."
Onyeagwu who was represented by the Managing Director of Zenith Bank Ghana, Mr. Henry Oroh, said the most viable option for Nigeria was in stimulating the non-oil exports.
"The appropriate response to these limitations will help to mobilise resources for growth of the sector, especially with the emergence of African Continental Free Trade Agreement which has the potential to boost intra-continental trade by about $35billion yearly," he added.
According to the President of African Export and Import Bank (Afreximbank), Prof. Benedict Okey Oramah, the implementation of the AfCFTA would help African countries to specialise in their respective areas of comparative advantages.
"It will enable business to grow, jobs created and infrastructures developed. It will also help to reduce cost of doing business because of the economies of scale it will offer. In addition, it will stimulate innovation and create different ways of doing things," Oramah said, adding that "we must sustain the momentum because it will be very disastrous for the continent if we fail. I do not think that there will be another opportunity for Africa."