August 10, 2022

Reporters’ Diary

Factual Reportage

It will take the next 10 years for AfCFTA to be effective-FG

By Joy Enamuna

The Federal Government has said that it will take some time for Nigeria to be fully ready for the African Continental Free Trade Area (AfCFTA) which kicked off in January 1, 2021.

The Senior Special Assistant to the President on Public Sector Matters and Secretary, National Action Committee on AfCFTA, Mr. Francis Anatogu who stated this in his keynote address at the 3rd Annual Lecture and Awards with the theme ,”Assessing Nigeria’s Preparedness to Maximize the Gains of AfCFTA”, organized by Primetime Reporters in Lagos recently said “when you say are we ready to replace 85% of Nigeria’s export revenue, we can’t be ready in one day, we can’t be ready in ten years.”

According to him, “But the analogy I gave is that we are all Nigerians, it is only few people that take mortgage to go and build house. I mean you must be very strong to take a mortgage of 20% to go and build house. What we do, if we buy blocks, every year, we keep building blocks, five years to ten years, then you see the house. And that is my analogy for AfCFTA programme because there is a lot to be done.

“It is not only the infrastructure that requires work; our mindset requires work because even the way we advocate for change needs to change. It is okay to talk what needs to happen and we need to talk more of what needs to happen but then, we also need to hand hold people that make the change for that change to happen.”

On why AfCFTA is very important to Nigeria and Nigerians, he said, “It is important for us. As we were trying to figure out from the AfCFTA perspective which product and services we should focus on and which market we should focus on, one thing was obvious; we cannot ignore our domestic markets. Our domestic market accounts for about 11% Africa’s total imports. We do not have, as hard as it is trade domestically. Trading internationally means that you comply with domestic rules and then comply with the external rules. So, it is easier to comply with domestic rules.

“Our domestic market, we need to create the demand for what we produce locally. That for us is the foundation market for AfCFTA. We need to consume what we develop and then, we start exporting. 90% of the goods will be liberalized which means duty is waived but this will happen over a period of ten years for us in ECOWAS. So, it is not going to happen overnight.

“The second thing is that for your good to be able to be called AfCFTA good, it needs to meet the rules of origin. The rule of origin is nothing other than local content of what you are producing and if you do not meet the local content, it will not be accepted. But something else to bear in mind is that with AfCFTA, it is actually not Nigerian content, it is African content because any good made in Africa, if you make 20% in South Africa and bring the components here and add another 20% here, If you are moving in Nigeria, it is counted as 40% because 20% is from another country in Africa. Yes, we support our African countries; it is for us to make sure that the 40% local content, maybe we can get 30% here and get 10% from others but it is also important to know that the journey of a thousand miles starts with a step. So, we start from where we are today.”

He, however, noted that the African Continental Free Trade Area is a game changer for Nigeria, noting that for at least, close to ten years, oil production had been constant but the capital income had been dropping and that was because Nigeria’s population had been growing as evidenced in the unemployment figures.

“We are in an era where global warming and Paris accord which is threat to the product that contributes about 80% to 85% of our foreign revenue earnings. So, we actually need to do something, we actually need to diversify, whether AfCFTA or any other thing but we need to find something to augment, replace or whatever term you use. There is a risk management that we have there of about 85% of our income that we need to find a way to protect and that has to come from Export. If you don’t export oil, then you have to export something else but oil.

“So, when you think AfCFTA, yes, think first Africa but when you finish thinking Africa, come back and think export because we need export for us to survive beyond the oil world. As many of you know, many countries now have statement, laws, commitment, policy to move away from oil by 2030 or beyond or very close to 2030 to 2040 to 2050.

“So, really, the AfCFTA is like, for me, a practice ground for what we must do as a country for our long term survival. And now, whereas oil, you can go to somewhere in Rivers or Bayelsa or Cross River and you drill and you find oil, you don’t know where it comes from, someone sits on a tanker and it goes and the money is paid, you don’t even contribute much even in the investment, the likes of Shell and Co., they bring the money, they drill the well, they build the facilities and we take our own share of the oil.

“For non-oil, it is different, for non-oil, it is harder, for non-oil, we are talking about finance, our people, be it SME or big company, you will have to find the money, you will have to bear the risk, you will have to find the customer, you will have to transport the product, you are competing with the rest of the world. So, it is difficult and that is where we are coming from. We are coming from an era where we were not really trading. People are trading; a lot of people are moving between Nigeria, Niger and Chad and so on, people are coming from the Central African Republic and Co., to come and buy from our market here, but we are now talking big time trade.”