One year after declining to append his signature, President Muhammadu Buhari Sunday in Niamey, Niger Republic, signed the African Continental Free Trade Area (AfCFTA) agreement. Africa’s most populous country and biggest economy, signed the continent-wide pact that seeks to create an African single market. “Nigeria is signing the #AfCFTA Agreement after extensive domestic consultations,” the government said in a statement.
Nigeria’s neighbor, Benin Republic, also joined the ranks of the countries that have signed the pact; bringing the number of parties to the agreement to 54. Eritrea is the only African Union (AU) member yet to sign the trade pact. AfCFTA came into effect in March with 52 out of 55 countries backing the policy as at then. Nigeria initially abstained from signing the agreement initially, saying it was weighing the effects it will have on its economy.
The Brookings institution described Nigeria’s decision to not ratify the agreement at the time as “baffling.” Being the continent’s biggest market and bedeviled by porous and poorly manned borders, Nigeria is wary it may become a dumping ground for all sorts of goods, especially those not made in Africa. It said it is “focused on taking advantage of ongoing negotiations to secure the necessary safeguards against smuggling, dumping and other risks/threats.”
Nigeria agreed to sign the agreement after a panel set up by President Muhammadu Buhari in March gave AfCFTA a positive nod. “Our reports show that, on balance, Nigeria should consider joining the AfCFTA”, the panel’s chair, Desmond Guobadia, said in a statement to the president Thursday
However, the report of the panel warned that the agreement is fraught with “major risks,” including smuggling and deliberate labelling of products made outside the continent as made in Africa. “The risk is that it will provide incentive for traders to disguise goods imported from outside the continent as made-in-Africa goods”, the report warned.
President Buhari told the panel, after receiving its report, that African countries must scale up their manufacturing capacity for the continent-wide trade policy to succeed, noting that his government’s vision of intra-African trade is for the free movement of made in Africa goods.
“For AfCFTA to succeed, we must develop policies that promote African production, among other benefits,” Buhari said in Abuja last Thursday. “Africa, therefore, needs not only a trade policy but also a continental manufacturing agenda.” Buhari signed the agreement in the Niger capital, Niamey, at the opening of the 12th Extra Ordinary Summit of the AU to launch the operational phase of AfCFTA.
The AU said the pact will boost “Africa’s trading position in the global market by strengthening Africa’s common voice and policy space in global trade negotiations.” Aside being signed by 54 of the 55 African nations, 24 of them have already ratified the agreement, which creates the world’s largest free trade area since the creation of the World Trade Organization (WTO). AfCFTA has a potential market of 1.2 billion people and a Gross Domestic Product (GDP) of $2.5 trillion for the entire 54 member states.
Meanwhile, the United Nations Deputy Secretary-General, Mrs. Amina Mohammed, has pledged the UN’s full support to the AU as nations begin to earnestly operationalize the landmark AfCFTA. According to a statement issued by the UN Economic Commission for Africa (ECA), she made the pledge on Sunday in Niamey, Niger, at the 12th extraordinary session of the African Union on the AfCFTA.
Mohammed said the UN was ready to work in partnership with African countries as they move to implement the historic and game-changing AfCFTA.
“We are committed to working with African institutions to mobilise the resources that will be required for full implementation of the AfCFTA. In the first instance, the African Regional Integration Trust Fund will support countries to mobilise resources to finance regional integration”, she said.
The Deputy Secretary-General also said the UN would work with the AU to coordinate and leverage complementary funding sources from the African Development Bank’s (AfDB) Africa 50 Fund, to the AU’s Programme for Infrastructure Development in Africa (PIDA), and China’s Belt and Road Initiative.
She added that the ECA was supporting the process of mainstreaming gender and youth employment initiatives into national strategies.
“This will help to ensure that trade policy is both gender-sensitive and responds to demographic realities, thereby contributing more fully to sustainable development. Trade can contribute to either widening or closing inclusion or gender gaps, depending on how the process is managed. So we are also working with governments to counterbalance the distributional and gender-differentiated effects of trade liberalisation.”
According to Mohammed, it is essential to act now, not only to ensure that women benefit from the AfCFTA but also the African youth, given the demographic challenges facing the continent. She told the African leaders gathered for the landmark occasion to officially launch the AfCFTA as entry into force of the accord was a momentous step.
“As you have recognised, it is a first step. Realizing its full potential will require changes and improvements in several important areas, including infrastructure development, capacity to export and non-tariff barriers. I urge you to move decisively and quickly during the transitional period up to July 1, 2020 to reap the rewards of this historic agreement.”
She added that Africans should take particular pride in reaching the agreement at a time of growing protectionism and rising trade tensions that threaten economic stability and progress around the world.
Mohammed said that from free trade to climate change and migration, African countries and regional organisations were developing progressive policies that demonstrate global responsibility and forge a new path for multilateralism and sustainability.
“The entire UN system will continue to support African countries as you accelerate the continent’s development. Together, we will realise our shared vision of Agenda 2063 and the Sustainable Development Goals, leaving no one behind,” she added.
“Perhaps most important of all, the AfCFTA demonstrates the common will of African countries to work together to achieve the vision of the AU’s Agenda 2063: The Africa We Want.” According to her, it is a tool to unleash African innovation, drive growth, transform African economies and contribute to a prosperous, stable and peaceful African continent, as foreseen in both Agenda 2063 and the 2030 Agenda for Sustainable Development.
