By Modupe Gbadeyanka
If the Africa Continental Free Trade Area (AfCFTA) agreement is to be successful, then countries on the continent must ensure the initiative is well-financed.
This was the view of Nigeria’s Vice President, Mr Yemi Osinbajo, when he spoke at the 61st annual conference of the Nigerian Economic Society (NES), which had the theme African Continental Free Trade Area (AfCFTA) in Post COVID-19 Era: What Next for Nigeria?”
“Successful implementation of the AfCFTA requires financing to address various implementation challenges and to promote arrangements in support of integration.
“For instance, in addition to making up for potential losses of tariff revenues, African countries will face implementation costs, including undertaking reforms, establishing new trade-related bodies, improving and upgrading existing facilities.
“Finding the resources to undertake these activities at a time like this when we lack fiscal space will, of course, prove to be very difficult for Nigeria and other African countries.
Our economists should accordingly help to come up with innovative financing solutions for our economies,” the Vice President said at the event, which was held virtually.
The AfCFTA deal, which was earlier slated to become operational on July 1, 2020, was moved to January 1, 2021, due to the COVID-19 pandemic.
Speaking on the global health crisis, the Vice President said “indeed, one thing that has become clear from our experiences of the last few months is the need for a vibrant and successful AfCFTA.
‘The pandemic has exposed our dependence on commodity exports to other parts of the world and on the import of manufactured goods from them.
“As at 2017, intra-Africa trade in goods was $135 billion, which was just about 15 per cent of Africa’s total trade. This is in sharp contrast to trade in other regions, which is as high as 70 per cent in the European Union and 60 per cent in Asia.
“The imposition of export bans, including on food items by some countries and the disruption of global supply chains at the height of the pandemic, showed just how exposed and vulnerable African countries are because of limited productive capacity and a lack of regional value chains,” Mr Osinbajo said.
But the Vice President wants African nations to use the AfCFTA to overcome the economic fragmentation of the continent by bringing the regional economic blocs together in a common arrangement.
According to him, African countries should look to negotiating trade treaties with other parts of the world on the basis of AfCFTA rather than through arbitrarily designed regional blocs, warning African countries not to “allow themselves to be lured into arrangements which do not serve their long-term development objectives.”
Speaking further about how the agreement can bolster trade and development on the continent, the Vice President said, “we must, of course, continue to bear in mind, especially here in Nigeria that the AfCFTA is not a magic wand that automatically brings about growth and prosperity.”
“The reality is that if care is not taken, trade liberalization can expose the Nigerian economy to unfair competition and sharp trade practices, with adverse consequences for our producers who might have to close down their businesses, and for our workers who would then lose their jobs.”
“If the AfCFTA is to achieve the desired objectives, then it is also very important that Nigeria should push for the implementation of complementary programmes and protocols, including the protocol on the free movement of persons, the pan-African payments system and other sectoral programmes,” he said.
In her remarks, the president of NES, Prof. Sarah Anyanwu, commended both President Muhammadu Buhari and the Vice President, describing Mr Osinbajo as “a friend of our society, because he understands economic development.”
