IT is arguably, the most ambitious and strategic push to build an integrated, diversified and industrialised continent capable of holding
its own in the global economy. With its promise of creating a continental trade bloc of 1.3 billion people across Africa, with a combined Gross Domestic Product of about $3.4 trillion, the African Continental Free Trade Area is easily the world’s largest trade agreement since the creation of the World Trade Organisation in 1994.
Containment measures such as border closure, travel bans, and in some cases, total or partial lockdowns, enforced by most African countries, including Nigeria, to curb the spread of the deadly virus have directly impacted on economic integration and intra-African trade, which are at the core of the free trade deal.
It is easy to see why this is so. Trade liberalisation is expected to improve economic activities with the CFTA in terms of trade and investment. But as things stand, all negotiations on tariff concessions are currently on hold due to the pandemic as countries are more focused on saving lives and preserving livelihoods.
Recall that the establishment of the AfCFTA is being progressed in two phases. Phase I has been completed except for two issues: RoO and Schedules of Tariff Concession. Negotiations on Phase II, which are still on-going, include protocols on competition policy, investment and intellectual properties. Such protocols are also expected to be delayed.Nigeria and other African countries with low per capita income depend on agriculture for their export earnings.
This will also affect demand for trade and services within the aviation, financial and telecommunications sectors. But this, according to development experts, can be possible when participating states upscale their industrial and manufacturing sectors which in turn increase the GDP from processing imported raw materials within the CFTA to semi-finished or finished goods for export either within the CFTA or outside.
For Nigeria, the opportunity of up-scaling the manufacturing sector is more obvious and compelling. The President of African Export-Import Bank , Professor Benedict Oramah, believes, for instance, that one of the benefits of the deal waiting for Nigeria to grab is the possibility of taking over from China as the world’s manufacturing hub.
“As China shifts to more capital-intensive manufacturing due to rising labour costs, those goods have to be supplied by somebody. Nigeria and indeed, the entire African continent will have themselves to blame if this projected supply gap is filled from outside the continent.” In fact, where manufacturers and other stakeholders on the continent see challenges and uncertainties around the AfCFTA, PwC sees a silver line on the horizon. Listen to its team of experts led by Partner Taiwo Oyedele: “The crisis has shown the importance and opportunities for African economies in the digital economy.
The firm was emphatic that countries that can get this development requirement could compete effectively within the CFTA, noting that clearly, Information Technology support was not considered as an essential service during the lockdown. Will Nigeria rise to the challenge in the digital space? While answer to this remains in the realm of conjecture, stakeholders are optimistic that going by recent assurances by the Minister of Communications and digital economy, Dr. Isa Pantanmi and the CEO, Nigerian Communications Commission , Prof. Umar Garba Danbata, Nigeria may emerge strong on the digital economy space before the scheme’s January 1, 2021 new kick-off date.
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