Economy
AfCFTA Requires Financing for Successful Implementation—Osinbajo
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.”
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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