President Muhammadu Buhari will, in January 2019, receive the final report from the presidential steering committee on impact and readiness for the signing of the African Continental Free Trade Area (AfCFTA). Nigeria is yet to sign the AfCFTA agreement, which seeks to remove all forms of restrictions to trade and investment flows within the African continent. Senior Special Assistant on Media and Publicity to the President, Garba Shehu, in a statement yesterday, said the country has launched a nationwide stakeholder consultation with the purpose of reflecting a wide range of views in the technical instruments. It would be recalled that on October 22, 2018, while inaugurating the committee at the Presidential Villa, President Buhari had charged it to assess the extent to which Nigeria is ready to join the agreement, and what the impact of doing so would be.
The committee, which was given 12 weeks to conclude its assignment, has held wide consultations with industry groups and stakeholders, including the Manufacturers Association of Nigeria (MAN). Shehu said: “While opinion is still divided in Nigeria on the merits and demerits as well as the timing of joining the AfCFTA, the committee has commissioned a study to shed more light on the public debate on the issue in the aftermath of a recent report published by MAN. “The report by MAN, among others, notes that if Nigeria ratifies the agreement, import surges will range from 27.6% for textile, apparel and footwear sub-sector to 180.7% for chemical and pharmaceutical products during the three phases of liberalizing tariff lines with 5% tariff rates.” MAN, in contrast, said the import surge will be as high as over 2000% in motor vehicle assembly sub-sector over 15 years when 10% tariff rates are liberalised. This will instantly spell doom for the automotive aspect of Nigeria’s National Industrial Revolution Plan (NIRP).
The MAN study also shows differing output, employment and investment effects across manufacturing sub-sectors. For instance, four sub-sectors (food, beverages and tobacco; wood and wood products; textile, apparel and footwear; and nonmetallic) will likely see substantially high rates of increase in imports and import competition coupled with a substantial decrease in output. The presidential aide noted that “similarly, major changes in employment can be found in three manufacturing sub-sectors: chemical and pharmaceutical products; textile, apparel and footwear; and non-metallic sub-sectors. Some sectors, such as electrical and electronics and wood and wood products, will lay off workers. “The MAN study goes further to show that huge investments are required in chemical and pharmaceutical products and textile, apparel and footwear sectors, while moderate investments are required in electrical and electronics.” AfCFTA is designed to be a pan-African free trade area that will create a single market for goods and services. It also aims to liberalise and facilitate the movement of investment and business people across the continent. On March 21, 2018, 44 of the 55 African countries signed the AfCFTA agreement in Kigali, Rwanda.
