Thursday, August 1, 2019

AfCFTA Implementation Strategies-Part-4: Lessons From The Challenges of ECOWAS FTA

The implementation of the AfCFTA for the benefits of Nigeria is a very important programme. This is because it is very critical for the growth of Nigeria and that of the African continent at large. If the Free Trade Agreement (FTA) among the 500 million population of the European countries that formed the European Union has helped them to contribute about 34% of world trade in manufactured goods out of which about 65% were done among EU member countries, I strongly believe that the AfCFTA among over 1 billion Africa countries can grow the export value of Africans from 2.6% to more than 10% in 10years. However, for this to happen, we must be ready to do the work necessary to overcome the challenges that will militate against the successful implementation of the AfCFTA.

This is the fourth in the series of Articles on AfCFTA implementation strategies and it will continue from were we left off last week on the challenges of FTAs. However, this article will be focused on the peculiar challenges that have hindered the implementation of ECOWAS Trade Liberalisation Scheme (ETLS) which is a 29 years old FTA in West Africa. The potential opportunities of ETLS have remained untapped since inception. The reasons for the very low level of utilisation of this FTA has been attributed to different challenges by different researchers from within and outside the region.

According to the 2017 report of Deloitte on ETLS, the issue of inadequate information about the ETLS and hence the low awareness of the scheme among the businesses in the region stood out as a major impediment to the full utilisation of the FTA. Deloitte went further to state that the fact that some few businesses are using ETLS should have made the news of the benefits to spread but the bad experiences they had in trying to utilise the scheme had made it unpopular among exporting companies in the region. The issue of lack of awareness of ETLS among qualified companies in the region have also been underscored by other researchers. They stated in their report that the inadequate sensitisation and awareness about the scheme, the lack of information about the content of the scheme and how to go about the registration of products in order to access the numerous benefits of the FTA is a major challenge that is being faced by companies in the region.

The lack of information and awareness of the details of the scheme is not just on the part of the companies that should be exporting, there is another dimension to it and this time it is among the agencies of government at the borders of the ECOWAS member states. This ignorance is said to manifest via the demand for the payment of the tariff by the border agencies of some member states. This denial of access to the duty-free entry for goods registered under the ETLS with valid Certificate of Origin (CoO) has also been reported from the survey done by Deloitte in 2017. It went further to state that even in situation where the CoO was accepted, the border agencies tend to delay in assisting with clearance of transit trucks from the entry and exit borders of the member states.

Apart from the fact that some qualified companies have either not heard or have a good understanding of how to access the benefits of ETLS, another challenge is the fact that even those that have been able to register their products and attempt to utilise the FTA are discouraged by the illegal and numerous road blocks being mounted by the border officials. These road blocks do not just cause delays, it is also used by these agencies to obtain illegal fees from the trucks and all these have led to the increased cost of transportation within the region. These illegal roadblocks and checkpoints cause the movement of freight to be delay because trucks are kept stationary for a very long time.

In addition to this, the 2009 report of the West African Trade Hub of the United States for International Development (USAID) on the gap analysis of the ETLS went further to state that the truck driver were being harassed by these government agencies at these roadblocks. The report of International Trade Centre in 2016 also substantiate this by stating that a lot of impediments in import-export procedures in the ECOWAS region often occur at the Customs authorities and these are due to inadequate and old equipment, delay in custom clearance and unnecessary bureaucracies. Another factor that is negatively influencing the utilisation of the West African FTA is the non-tariff barriers such as product registration, packaging requirements, product certification, technical inspection and testing, quantity restriction and import-export licensing. 

Finally, I have taken time to highlight all the challenges of ETLS above in order to give a glimpse of the likely challenges that the AfCFTA implementation committee members have to prepare to tackle in order to successfully implement the AfCFTA. I will commence the proposed solution to tackling these challenges in one of the subsequent edition of this article. It is my hope that the government will adopt some of the recommendations that will be prescribed in order to make the implementation of the AfCFTA create the necessary jobs that will lift out of penury, the tens of millions of Nigeria that are currently living below the poverty line.

Bamidele Ayemibo/ 
Lead Consultant 3T Impex Trade Academy

No comments:

Post a Comment