Lagos — Nigeria should invest in complementary policies to position the private sector to take advantage of the African Continental Free Trade Agreement (AfCFTA) as well as support groups that may be vulnerable to changes in trade, including women, the youth and micro-small and medium enterprises (MSMEs).
This was said Friday by Bakary Dosso, Acting Director of the Sub-Regional Office for West Africa of the Economic Commission for Africa (ECA), in closing remarks to the two-day AfCFTA National Forum that was held in Lagos under the theme; Effective Implementation for Industrialisation and Inclusive Economic Development in Nigeria.
The private sector, he said, may bear costs linked to structural readjustment of the economy as it reacts to new opportunities and competitive pressures presented by the agreement.
"The short-term losses from the AfCFTA are no reason not to forge ahead. History tells us that the long-run gains of trade liberalization far outweigh the short-run adjustment costs," said Mr. Dosso, who spoke on behalf of ECA Executive Secretary, Vera Songwe.
"It is crucial that the AfCFTA process is fast tracked. Government, private sector actors and partners should work together to ensure that this readjustment is as low cost and short-lived as possible."
Mr. Dosso said discussions during Nigeria's national AfCFTA Forum pointed to a broad consensus that the AfCFTA offered significant potential to boost Nigeria's trade, industrialization, economic growth and poverty reduction.
"Yet, these potential gains will not be automatic, and like any other trade agreement, the AfCFTA will create short-term adjustment costs, in addition to winners and losers. Nigeria will face direct implementation costs associated with the introduction of new reforms obliged by the agreement," he said.
Mr. Francis Anatogu, Senior Special Assistant to President Buhari on Public Sector Matters, said it was clear that the AfCFA presented several potential opportunities but, he added, they can only be tapped by those willing to take action.
"This is about the 200 million Nigerians and not just a few. The AfCFTA presents an opportunity to get 100 million of our people out of poverty," he said, adding the Forum was just one of the several engagements lined up to fine-tune the country's AfCFTA implementation strategy.
Key Forum takeaways on priority actions for Nigeria to maximize AfCFTA gains
- Preferential market access is important, but reducing the non-tariff trade costs faced by importing and exporting African firms is even more important.
- Operationalization of the built-in AfCFTA Non-Tariff Barrier (NTB) mechanism for the monitoring, reporting and elimination of NTBs, in addition to complementary trade facilitation and customs cooperation measures, crucial.
- Timely completion of negotiations on services liberalization and phase II issues on competition policy, investment, and intellectual property rights crucial.
- It is imperative that outstanding issues on rules of origin be finalized by the end of the year. Stringent rules of origin can prove particularly burdensome for MSMEs. A rules of origin manual would help to guide these enterprises to benefit from trade preferences under the AfCFTA.
- It is not possible to participate in trade without complying with standards and technical requirements applicable to traded products. The AfCFTA should be used as a platform for continental cooperation on quality infrastructure. Nigeria as a leader on standards in the region can offer a hand to less capacitated countries.
- The AfCFTA will not be a success and will not be development friendly without a participatory approach, and without engaging with those who stand to gain or lose from the Agreement. Information sharing and building awareness on the contents of agreements is crucial.
- Making the AfCFTA work in Nigeria will require creating institutional structures for implementing the agreement.
- Implementation of the AfCFTA must include complementary policies to maximize its gains but also to ensure that its benefits are shared more equally.
The Forum made the case for integrating the AfCFTA into Nigeria's National Development Plan, providing additional impetus for the complementary policies required to support AfCFTA gains.