The African Heads of States and Governments pose during African Union (AU) Summit for the agreement to establish the African Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. AFP PHOTO

By AYOOLA OLAOLUWA

Nigeria and the 53 other African nations that signed up for the African Continental Free Trade Area (AfCFTA) may have to wait much more longer for the benefits of the treaty, as poor infrastructure, red-tapism, entrenched protectionism, as well as the effects of the coronavirus pandemic continued to dog the program.

After several months of delay, African countries officially began trading under a new continent-wide free trade area on January 1, 2020. It promoters aim to bring together 1.3 billion people in a $3.4 trillion economic bloc that will be the largest free trade area since the establishment of the World Trade Organization (WTO).

Apart from allowing the continent to develop its own value chains, backers had projected that trading between African neighbours would be boosted by about 60% by 2022.
According to a research conducted by the African Development Bank (AfDB), only 16% of international trade by African countries takes place between African countries.

The World Economic Forum (WEF) in it’s own report, said African nations currently trade more internationally than with one another. The forum puts the trade volume between the continent and Asia at 59 per cent and 68 per cent for Europe.

However, one year into the official takeoff of the ambitious programme, it has failed to live up to expectations owing to several obstacles on it’s part, leading experts to advise participating countries to quickly remove the obstacles if AfCFTA is to reach its full potential.

Findings by Business Hallmark show that two of the major challenges facing the program is the lack of political will to implement the deal and the protectionist stance of many African governments and interest groups who fear losing out to more competitive neighbours.

For instance, out of the 54 African countries that have signed the AfCFTA deal, only four have deposited their instruments of ratification at the AU depositary, with 50 others, including Nigeria yet to do so.

One of such countries where AfCFTA has recorded a false start is Nigeria. BH reliably gathered that apart from some challenges preventing the program from taking off in the country, such as poor infrastructure, consensus on trade protocols and strategy among stakeholders and red-tapism, it is also bugged down by the scepticism of the pan-African project on the part of some influential members in the administration of President Muhammadu Buhari.

Sources in government and the private sector confided in our correspondent that the operational phase is yet to commence in the country.

According to one of the sources who spoke on the condition of anonymity, the major challenge preventing the takeoff of the project in the country is the provision in the treaty establishing AfCFTA that there should be 90 per cent tariff liberalisation on goods originating from the continent and the insistence by the Federal Government that it wants at least 180 products produced in Nigeria protected.

While 131 products are on the FG’s import prohibition list, the remaining products on the exclusive list were picked based on national priorities, trade volume, food security and competitive advantage, the source stated.
Meanwhile, only seven per cent of sensitive products and three per cent of exclusive products have already been negotiated, leaving over 4,300 tariff lines under the liberalised list.
The demands, it was further gathered, had been submitted by Nigeria’s trade delegation to the Economic Community of West African States (ECOWAS) for negotiation.

Based on the AfCFTA treaty, some sensitive and exclusive products have to be liberalised within the 10-year period agreed in the deal.
Another obstacle on the path of the successful take off of AfCFTA is the snail speed in the negotiation of the Rules of Origin (RoO).
The RoO, it was learnt, are at about 87.65 per cent completed with outstanding work of about 10 per cent on textiles and two per cent relating to automobiles.

It was also learnt that while the Federal Government had received offers from 41 countries, the offers are yet to be verified.
Also, Phase 2 negotiations on investment, intellectual property and competition are at early stages while talks on women and youth in trade and digital trade are yet to start.

Apart from the challenges of trade nationalism and red-tapism, another obstacle that worked against the smooth kickoff of AfCFTA, is the disruption of international trade by by the Covid19 pandemic.

The restrictions imposed by many countries in their desperate efforts to contain the spread of the virus disrupted global supply chains, with manufacturers unable to get raw materials and access to markets for their goods.

Reacting to the slow implementation of AfCFTA, the Manufacturers Association of Nigeria (MAN), advised the Federal Government to continue to liaise with the private sector in making it operational.

“Now that we have signed, ratified and deposited the instrument of ratification at the repository, the National Action Committee (NAC) should be effectively supported to continue to vigorously engage the private sector and relevant Ministries, Departments and Agencies of government to accelerate the putting in place of all structures required for beneficial trade.

“In this regard, we implore government to urgently embark on establishing the Designated Competent Authority that will superintend the administration of Rules of Origin and Commission the automation of the Certificate of Origin and export and import documentation processes for AfCFTA transactions,” the MAN boss, Mansur Ahmed advised.

In his own response, the Secretary-General of AfCFTA Secretariat, Mr. Wamkele Mene, beseeched Africans to be patient, explaining that the target of the agreement is to achieve zero duty on 97 per cent of all products traded in the continent by 2035.

“I think Africans should be patient and understand that we are in the initial stages of significance to go together under a single set of rules.

“We will learn from the experience of the European Union (EU) that it took 72 years to get to this point of market interventions that it enjoys today.

“What we are doing is not an easy task, it is time-consuming, and it requires patience to see results in years to come.

“I am not worried about the slowness because typically, negotiations and implementation of trade agreements is not something that happens overnight,” Mene noted.

A researcher with the Institute for Security Studies (ISS), Teniola Tayo, said the decision to launch trade on 1 January 2021, highlighted the urgency to negotiations among participating countries.

According to her, the slow takeoff of the project did not come as a surprise to her as the politics behind tariff agreements in individual countries could be difficult, as witnessed in Nigeria.

Corroborating Tayo, the Head of African Futures and Innovation at the ISS, Jakkie Cilliers, said the slow start recorded by the project did not in any way cast doubt on the viability of AfCFTA, insisting that the launch was just a symbolic gesture while negotiation go on behind the scenes.

‘The road to AfCFTA is a long one and the 1 January 2021 trading start date is generally seen for what it was, a symbolic gesture.
“There are going to be many more delays and false starts. I think the question is rather how AfCFTA will work if sub-regional arrangements have not,” the Head of African Futures and Innovation at ISS stated.

Like in Nigeria, the AfCFTA project has failed to live up to expectations in many African countries. From Ghana, to Egypt, Ethiopia, South Africa, Togo, Morocco and many others, the story is the same.

Disturbed by the development, Ghana’s International Trade and Finance conference (GITFiC), recently lamented the failure of most African countries to fully develop a comprehensive National AfCFTA Implementation Strategy.

While conceding that countries may have existing trade policies and developed guidelines, GITFiC insists that was not enough to maximise the full benefits of AfCFTA.

A consultant at ISS, Peter Fabricius, said: “Complex trade negotiations no doubt take time. But by firing the starting gun almost a year ago when no runners were out of the starting blocks, African leaders have created confusion, especially among traders.

“Maybe the early start date was needed to drive negotiations. But to sustain momentum, the AfCFTA secretariat and participating states should do a better job of keeping traders in the loop about why implementation is taking so long”, said Fabricius.

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