The Manufacturers Association of Nigeria (MAN) has said the African Continental Free Trade Area (AfCFTA) offers enormous opportunities for Nigeria, but the association admitted the country’s manufacturing sector will be hard hit owing to the poor competitiveness of many firms.
Speaking at the zonal sensitisation workshop on AfCFTA organised by MAN for local manufacturers, Mansur Ahmed, MAN president, described the trade treaty as a symbol of commitment of African Union to free trade on the continent through progressive elimination of tariffs on imports covering 90 percent of tariff lines in Trade in-Goods and Services.
“MAN recognises the imperativeness of creating a beneficial Free Trade Area for export of the products of members and has strongly worked assiduously to promote the articulation of evidence-based positions on AfCFTA,” Mansur said
Mansur, who was represented by Isaac Ade Agoye, national treasurer of the association, said every trade agreement came with economic gains and pains.
“Nigeria has signed the AfCFTA Agreement with great expectation that the country would gain from the free trade arrangement and not suffer too many losses,” he said.
“This, notwithstanding, we are aware that the results of the country-specific studies commissioned by MAN and the Government presented compelling evidence that the AfCFTA would have some backlashes on the Nigerian economy, especially the manufacturing sector.” Mansur said.
As a result, MAN had thoroughly and extensively validated its position through internal consultative processes and also engaged in advocacy, high level multi-level discussions especially with policy makers, he said, stressing that it had equally done extensive research in a bid to sensitise manufacturers on pros and cons of the trade agreement.
He further called for improved value addition among its members in order to fully enjoy the opportunities inherent in the AfCFTA
Oluwasegun Osidipe, director, economics & statistics department, MAN, said AfCFTA was a major milestone in Africa offering a market of 1.2 billion people, growth in intra-African trade, GDP worth $2.5 trillion, among other opportunities. He, however, said the trade agreement could only achieve its objectives if the traded goods and services were produced within Africa.
He said Nigeria was not in position to benefit from the various opportunities due to poor trade infrastructure; hostile trade environment, especially among Nigeria’s neighbouring countries; high level of trade malpractices; and limited trade capacity fuelled by supply constraints, among other things.
“The high cost operating environment, the dearth of basic infrastructure and uncompetitive nature of manufactured products may constrain Nigeria from securing maximum trade benefits” Osidipe said.
The AfCFTA is a continental trade agreement that is targeted at eliminating barriers to trade among African countries.
In his presentation titled, ‘AfCFTA Trade in Goods Protocol: Manufacturers’ Readiness’, Osidipe said the private sector was not ready for implementation of AfCFTA due to the uncompetitive state of Nigeria’s production environment in recent times, adding that capacity utilisation in manufacturing had hovered between 50 and 57 percent in the last five years.
He admonished manufacturers to incorporate high level of value addition, stressing that research had shown that taste of consumers were changing rapidly.
He urged Nigerian manufacturers to capitalise on the opportunities of the trade agreement, saying that it was necessary for the private sector to strategically position itself to ensure that other laws that would enhance gainful participation were enacted.
He further urged them to advocate for the resolution of challenges such as trade malpractices, insecurity, poor trade facilitation and infrastructure, porous borders, among others, while engaging the leadership of the National Assembly with necessary information that could facilitate beneficial regional and continental parliamentary engagements.
Gbemi Faminu
