Nigeria vows to sign Africa free-trade pact
Africa’s most populous country has been one of only three African states to hold back on inking the accord after local manufacturers said they would be badly hit by liberalisation.
But in a tweet, the presidency said Buhari would sign the pact when leaders of the 55nation African Union meeting in Niger’s capital, Niamey, from the weekend.
The African Continental Free Trade Area (AfCFTA) aims to spur business across Africa, a market of 1.2-billion people – expected to reach 2.5-billion by 2050 – and a current GDP of $2.5-trillion (R35.3-trillion).
The agreement would progressively eliminate tariffs among AU members, creating the world’s largest free-trade area since the formation of the World Trade Organisation.
Nigeria was a key backer when talks on the AfCFTA got underway in 2002, but its government abruptly changed course shortly before the draft deal was signed in 2018, amid pressure from unions and businesses fearful of the impact of lowered trade barriers.
However, the presidency announced late on Tuesday that Nigeria would now join the club.
“Nigeria is signing the AfCFTA Agreement after extensive domestic consultations, and is focused on taking advantage of ongoing negotiations to secure the necessary safeguards against smuggling, dumping and other risks/threats,” it said.
Last week, a special government panel formed to study the potential impact of joining AfCFTA recommended that Buhari sign Nigeria up.
The trade deal “provides immense opportunities for Nigeup,” ria’s manufacturing and service companies to expand to Africa”, the panel’s chair, Desmond Guobadia, said.
AU trade commissioner Albert Muchanga welcomed Nigeria’s decision as a good and important development and urged the two remaining non-signatories, Benin and Eritrea, to follow suit.
“Two more to go and an All Africa Market will start shaping he wrote on Twitter.
In addition to signing the agreement, Nigeria will still need to ratify it if it wants to emulate Africa’s other economic heavyweights, Egypt, Ethiopia, Kenya, and SA.
The AfCFTA formally came into force at the end of May after it crossed a threshold of ratification by at least 22 countries.
However, key details still have to be thrashed out to make it operational, including the creation of institutional structures and key regulations such as rules of origin.
At present, only 16% of trade by African nations is with continental neighbours.
One reason is that average tariffs on intra-African trade, of 6.1%, are higher than on exports outside of Africa.
The Economic Commission for Africa estimates that the AfCFTA “has the potential both to boost intra-African trade by 52.3% by eliminating import duties, and to double this trade if non-tariff barriers are also reduced”, the AU said.
Renaissance Capital global chief economist Charles Robertson said signing the deal was a step forward for the Nigerian economy’s efficiency.
“This is a step away from protectionism, which will make Nigeria more competitive,” he said.
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