Nigeria is set to finally sign onto the Africa Continental Free Trade Agreement (AfCFTA) this week, after initial agitations by the country’s labour unions, sources have confirmed to TV3 Business.
It will become the 53rd country on the continent to subscribe to the agreement that will create a single market for goods and services facilitated by the free movement of persons in order to deepen the economic interest of the continent in line with the pan African vision.
Currently, Nigeria, Eritrea and Benin are the only countries yet to ratify the agreement.
Nigeria, which is one of the continent’s economic powerhouses, in April last year failed to sign the framework for the agreement due to major concerns raised by the country’s labour unions.
Their concerns primarily stemmed from the fact that the draft agreement was going to commit countries to removing tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased in later.
Policymakers and lobbyists in the populous nation are worried about the likely collapse of tenuous local industries and of losing economic clout in the region.
On the back of that, the Nigerian government in April 2018 suspended plans to sign the agreement, and explained the move was “to allow more time for input from Nigerian stakeholders”.
Ahead of the expected implementation of the agreement from Sunday, July 7, the AU commissioner on trade, Albert Muchenga, has hinted of a statement from the Nigerian government to announce the ratification of the agreement.
Head of the Business Desk at Media General, Alfred Ocansey, who moderated the Trade and Finance Conference in Ethiopia recently, said concerns about the collapse of infant industries were given prime consideration by the AU commission on trade.
What’s the AfCFTA
African heads and governments in 2012 agreed to the establishment of a continental free trade but only started negotiations in 2015.
Expected to be sign by all the 55-member states of the African Union, the agreement will bring 1.2 billion people with combined gross domestic product (GDP) of more than $2 trillion.
It is also expected to liberalise services and aims to tackle so-called “non-tariff barriers” which is said to be hampering trade between African countries, such as long delays at the border.
This will eventually ensure free movement of people and possibly a single currency could become part of the free trade area.
According to the UN Conference on Trade and Development (UNCTAD), reducing intra-African tariffs under AfCFTA “could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods.”