Yemi Osinbajo, Nigeria’s Vice-President (VP), is the latest public figure to lend his voice to the debate on Nigeria’s non-signature of the Africa Continental Free Trade Agreement (AfCFTA). Osinbajo remarked at the recent FT Summit that signing AFCFTA would have compromised the interests of Nigeria’s private sector. The truth is that Africa is not waiting and Nigeria will do well to step-up inclusive stakeholder consultations on the agreement. We must granularly dissect its potentials whilst fashioning plans to manage the inevitable downsides that accompany such ambitious pacts. Otherwise, we risk forfeiting a historic economic opportunity.
Give and take
It bears recalling an important truism in trade negotiations. No one has the ability to win it all on his own and no one party risks losing it all. As an exercise in relative gains, each participant needs to approach negotiations with an informed understanding of its own position relative to others. Success flows from the Socratic exhortation: man know thyself. What our non-signature of AfCFTA at the Kigali summit really points to is Nigeria’s failure to prepare adequately, to engage in the sort of inclusive national stakeholder consultation that countries should undertake simultaneously with external trade talks. Not owning up to this procedural flaw is tantamount to burying our Nigerian head in the sand. It does not bode well for accountability, learning or progress.
Our failure proactively to define key objective in a quid pro quo negotiation, and also understand latent advantages, saw us retreating chaotically from signing AfCFTA. By not being at the signing event, we lost a symbolic opportunity of historic proportion. Signing would have sent a powerful message that we recognise as Nigerians the potential of the deal to serve our interest, including facilitating freer mobility of Nigerian capital, goods and entrepreneurs which can be key engines of Africa’s resurgent economic prowess.
Whilst forty-four of the more ardent ‘free trader’ countries signed up to AfCFTA, only a handful of enthusiastic ‘free mover’ states appended their signature to the protocol on free movement. The latter was also presented for approval at the Kigali summit. This was not helped by the absence of Nigeria, a notable free-mover with the heft to constructively identify issue linkages whilst persuading the strong ‘anti-free movement’ camp of a major incongruity. Why sign up to trade liberalisation in droves without a corresponding freedom of movement for people and entrepreneurs?
Benefits threatened
There are several benefits that Nigeria can look to under AfCFTA. Given our market size, which confers unrivalled advantages of scale, heft and influence, we can work to expand opportunities for Nigerian sectors such as services. The latter has grown stronger and more sophisticated as our recently rebased GDP figures reveal. Nigeria needs to raise its trade facilitation game to support emergent sectorial champions, from banking through cement manufacturers to e-commerce platforms like Jumia and Yudala. With Nollywood and ‘Yaba Valley’ and others, ‘Nigeria Incorporated’ is going out and becoming more adroit at competing in regional markets from Ghana to Zimbabwe.
Freer movement of capital, goods and personnel under AfCFTA will be a boon to Nigeria, helping to assuage a lot of the difficulties that Nigerians face when doing business continentally. Aliko Dangote recently alluded to this mobility challenge when lamenting the multiplicity of visas he has to secure to traverse his Africa-wide operations. The key lesson for Nigeria here is to recognise and weigh correctly broader benefits offered by undertakings like AfCFTA. We must also keep consolidating existing pockets of competitive advantage.
Few African observers understand how Nigeria went from its erstwhile position of leading AfCFTA from the front to being a conscientious abstainer. As chairman of the African Union (AU) ministers of trade, Nigeria’s Enelama was instrumental in helping to shepherd the intra-state negotiation process, a process also led on a technical level by a seasoned Nigerian trade expert, Dr Chiedu Osakwe. Many African peers continue to commend this Nigerian contribution to date although they are peeved at how Nigeria abdicated leadership literally to rain on the AfCFTA signing ceremony in Kigali.
Managing concerns
Nigeria’s major failing is that through almost three years of inter-state negotiations on AfCFTA, we did not consult inclusively with all concerned domestic constituencies. This explains why the Manufacturers Association of Nigeria prevailed on President Buhari at the last minute not to signup. Just as revealing, this last ditch evasive action came only after Nigeria’s Federal Executive Council had given its approval for presidential assent to the deal.
Still, not all of the AfCFTA hysteria is entirely misplaced. Responding though through shielding economic actors behind a protectionist wall will likely prove counterproductive. We risk denying Nigerian businesses of opportunities to compete and upgrade capabilities within a controlled free trade environment. Whilst we doubtless require safeguards, dynamically calibrating this will be possible only through active analysis, self-discovery and a managed opening to the outside world.
To be successful, AfCFTA implementers must shut all the potential backdoors to rigging out honest African entrepreneurs. We face the real risks of unfair competition from more powerful external blocs, particularly if Africa botched its liberalisation attempt. The continent is still saddled with numerous, mostly incoherent, integration arrangements urgently in need of overhaul. Proceeding to the implementation of AfCFTA will open up vistas to resolve the burdensome conundrums so that we can turn the theoretical benefits of integration into reality. Preventing dumping of goods on African markets, particularly under distorting conditions such as state subsidies, must also be a top priority.
Match heft with sophistication
Our political distractions are such that we have not managed to develop the dense layers of commercial intelligence required of a big and systemically important economy like ours. Peers like South Africa (SA) fight hard to join club governance arrangements like the G20 group of the most systemically important global economies. The forum draws public functionaries, the private sector, CSOs and others into trade-supporting networks and constellations. Analytical capabilities are built around both home-based and Diaspora intelligentsia, as well as think-tanks and the likes to offer perspectives on the national economy and likely competitors.
However, distraction under President Yar’Adua kept Nigeria out of the G20. We were invited but proved irresponsive, according to anecdotes offered to this author over a dinner meeting in Ottawa by the former Canadian Prime Minister who guided his country through the important groundwork on establishing the G20. Whilst SA and others hone their economic analysis through the G20’s think-tanks (T20) network and similar, Nigeria has neither optimised leadership opportunities nor forged the dense ecology required to distil trade capabilities and address constraints more lucidly and concertedly. Dr Osakwe’s appointment as Director-General of the recently established Nigerian Office for Trade Negotiations is astute.His leadership of consultations across Nigeria’s six geopolitical zones to canvass economic stakeholders on AfCFTA is a good first-step.
If Nigeria’s frontline negotiators are to successfully sign us up before the expiry of the three months deadline that we now face, we will need as a collective to put in quantum efforts beyond what we have mustered heretofore. Delivering tangible benefits also will require stellar work on the fine points of the agreement’s implementation. To that end, we must seek out more inspired appointments at home and abroad to bolster Nigeria’s economic management and technical advisory teams. This author advises several African governments and the AU on mineral sector governance. Given past experience, one cannot be too sure that Nigeria we will optimally leverage its experts and others to fully contribute diverse viewpoints. Embracing that inclusive diversity in itself can help deliver superior outcomes in this all important trade endeavour.
Ola Bello
Dr Bello is Executive Director, Good Governance Africa (GGA) and a Resource Governance Expert
