Thursday, May 31, 2018

AfCFTA Update: Safeguards Available For Nigerian Economy

The Head of the Nigeria Office of Trade Negotiation (NOTN) Ambassador Chiedu Osakwe recently concluded his tour round the country to sell the ideas and benefits behind the African Continental Free Trade Agreement (AfCFTA) to different stakeholders in the Nigerian economy. This was a fallout of the controversy that trailed the absence of the Nigerian President at the signing ceremony of the AfCFTA. 

The NOTN team was mandated by the president to consult widely with all the stakeholders in different parts of the country. This has made the NOTN to meet with tens of trade groups and also visit the following locations in the 6 geopolitical zones in the country and these include Kano, Benue, Maiduguri, Owerri, Calabar and Lagos. The consultation has been largely successful because it has significantly cleared the doubts and allay the fears of the stakeholders on the wrongly perceived dangers of signing the AfCFTA.

The Ambassador, who lead the Continental team that drafted this agreement was able to assured Nigerians that the AfCFTA is not going to expose the Nigerian economy unduly to influx of foreign goods. He was able to highlight some of the safeguards in the agreement that will make this to be impossible.

Some of these safeguards include the rule of origin. The AfCFTA has increase the level of value addition imported from outside Africa to 60% for the products to be deemed to be of African origin. This will prevent the goods from Europe and Asia from entering Nigeria to kill to local manufacturers who might not be able to compete because of the infrastructural deficit that have bedeviled our country 

Secondly, the state parties have 10% areas of their economy that they can hold back for a number reasons which could include developmental purpose,s National Security, inadequate capacity to compete with imported goods and so on. A list containing the products and services will be agreed upon by the state parties in their countries and submitted to the AfCFTA Secretariat. It is also interesting to note that 
Article 10 of the 
rotocol on trade in goods which is on modification of schedule allows state parties to modify these schedules from time to time as dynamics of their various economies demands.

Another very interesting safeguards for the Nigerian economy under the AfCFTA is the Article 16 of protocol on trade in goods. This article is on 
Anti dumping and countervailing measures. This agreement allows state parties to impose duties on goods that are imported into their countries at a price lower than what is obtained in the exporting countries. This might be due to subsidies in the exporting country or market penetration strategies by the manufacturer or exporter. 

Above all is the protocol on Arbitration. This is a very unique feature of the AfCFTA and an improvement on the deficiencies of the ECOWAS Trade Liberalisation Scheme (ETLS). This is because it allows aggrieved exporters to tender their concern with the relevant committee at the AfCFTA secretariat in order to resolve any issue or wrong doings of either state parties or individuals companies in the AfCFTA regions. 

Finally on the safeguards, the AfCFTA has a provision for any state party to exit the from the free trade areas on the African Continental after 5years of signing the Agreement if such a country so desire. This means it is not a forced marriage because we can divorce if it becomes necessary. 

There are many other protocols in the AfCFTA that can serve as a tool to protect the Nigeria economy. I think the Ambassador and his team at the NOTN have gone a long way to convince most of the stakeholders in the Nigerian economy that we are safe under the AfCFTA. It is also worthy of note that we have just 180days from March 21, 2018 to sign this agreement. If we do not sign by then, the rest of Africa will move on and if we intend to join some years down the line, we will have start a fresh negotiation through the World Trade Organization (WTO) before we can be admitted. 

Meanwhile, out of the 44 countries than signed the agreement during the ceremony on March 21, 2018, 3 of them have ratified the law and make their submissions to the AfCFTA secretariat. It is also important to note that 30days after 22 countries have ratified and submitted the document to the 
AfCFTA secretariat, the Agreement will take effect which means the state parties can begin to transact businesses under the law.

In conclusion, if we want to grow our economy to an enviable height, if we want to create more jobs for our youths, if we want to create markets from Agro processors and manufacturers in Nigeria, if we want to retain our pride of place on the African Continenta, then signing of the AfCFTA is the way to go.

Bamidele Ayemibo

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