With January 2021 fixed for the commencement of the African Continental Free Trade Area (AfCFTA) agreement, experts have advanced the federal government to strengthen the competitiveness of domestic firms in the country, especially those in the real sector.
The Nigerian Government ratified the agreement on November 12, ahead of the December 5 deadline issued by the African Union to its 55 member states, as AfCFTA is expected to commence January 2021.
The experts described the ratification of the AfCFTA by Nigeria as a good move that will ultimately be in the country’s best interest, noting that it must position itself to make the best of it.
The Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf opined that the ratification has addressed the uncertainties within the Nigerian business circle concerning the FG’s stance on AfCFTA.
Mr. Yusuf said, “The next step is to support the Nigerian private sector to take advantage of the 1.2billion market and $2.5trillion GDP, which offers tremendous opportunities.
“We need to liberate them from the shackles of constraints putting pressure on their costs and inhibiting their competitiveness. The quality of our infrastructure needs to improve, our policies need to facilitate competitiveness, our regulations need to support business growth, and our institutions need to demonstrate a better appreciation of the value of investment and investors in the economy.”
However, he emphasized that the competitive nature of the agreement would create ‘winners and losers’ and urged Nigerian businesses to review their business models.
In his own opinion, Cheta Nwanze, Partner and Senior Analyst at SBM Intelligence, said the move is in Nigeria’s best interest since trade has historically been a pathway to prosperity.
He said, “Nigeria’s agreement to ratify is a good move, which is ultimately in the country’s best interest. Now, the country must position itself to make the best of it. Trade has historically been a pathway to prosperity, and this should be no different.”
“Ideally, what should come next is for the government to put things in place for an export driven economy. That’s the way to take advantage of the AfCFTA. Unfortunately, the signal that we are seeing indicates major opposing views within the government.”
For Yusuf, the border closure is not consistent with the ratification of AfCFTA, which is why the FG has considered reopening the land borders ahead of its commencement in January 2021.
Vice President Yemi Osinbajo disclosed in a conference with the Chartered Institute of Personnel Management of Nigeria (CIPM) on Thursday, November 26 that quicker implementation of ratification protocols will ensure free movement of services, goods, and persons.
Nigeria has the potential to benefit from the trade agreement in the areas of agriculture and service exports. However, Nigerian companies should be strategically prepared to compete with other African countries for the 1.2 billion market share.
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