Moving a step further, President Muhammadu Buhari, on the 28th of July, 2019, approved the establishment of a National Action Committee (NAC) for the implementation of the AfCFTA.
By virtue of Article 23 of the African Continetal Free Trade Area Agreement, the AfCFTA shall come into force thirty (30) days after its ratification by twenty-two (22) of the signatory-nations or the deposit of the instrument of ratification by the 22nd nation.
By virtue of Article 23 of the African Continetal Free Trade Area Agreement, the AfCFTA shall come into force thirty (30) days after its ratification by twenty-two (22) of the signatory-nations or the deposit of the instrument of ratification by the 22nd nation.
The Gambia ratified the Agreement on the 2nd of April, 2019 while on the 29th of April, 2019, Saharawi Republic became the 22nd nation to deposit its instrument of ratification. The Agreement, thus, came into effect on the 30th of May, 2019.
The AfCFTA was motivated by the need to deepen greater economic ties among African nations through the creation of vistas of economic cooperation and interactions through trades in goods and services, investments, intellectual property rights and competition policy.
The creation of a common market became necessary in order to attain these lofty objectives. It is projected that a common market will create a viable economic hub where African countries can harness their huge market potentials not just to create wealth, but also to improve their respective balances of trade and strengthen their respective positions in relation to other nations of the world.
What do Nigerian trades and businesses stand to benefit from Nigeria being a member of the AfCFTA?
What do Nigerian trades and businesses stand to benefit from Nigeria being a member of the AfCFTA?
The obvious benefit is the eventual annihilation of tariffs, or a progressive reduction of tariffs on over 90% of goods manufactured on the continent and the removal of non-tariff barriers to trade.
The Preamble and Article 3 of the AfCFTA make provision for a continental market with the free movement of persons, capital, goods and services, deepening of economic integration, promotion of agricultural development, food security, industrialisation and structural economic transformation.
Others include the availability of an expanded and secure market for the goods and services of State Parties. The implications of this Agreement for Nigerian trades and businesses are enormous. In a nutshell, the AfCFTA provides a veritable platform for indigenous Nigerian trades and businesses to launch their products on this expanded African continental market which has been described as the largest since the World Trade Organisation came into being in 1994 via the Marrakesh Agreement.
According to statistics available from the United Nations Economic Commission for Africa, trade in the free trade area is expected to boost intra-African trade by 52% by 2022.
A successful AfCFTA will create a $3.4Trillion economic hub which, expectedly, will herald an era of unprecedented development on the African continent.
It must be pointed out that one of the reasons the Nigerian government demurred in signing the Agreement was its fears that Nigeria, with its huge population, might be a dumping ground for other African nations.
It must be pointed out that one of the reasons the Nigerian government demurred in signing the Agreement was its fears that Nigeria, with its huge population, might be a dumping ground for other African nations.
Considering, however, Nigeria’s huge population which makes it a reservoir for cheap labour, the business community in Nigeria can harness the potentials of the AfCFTA and launch their brands on this large continental market.
The revenue that will accrue to Nigeria in terms of capital reparations to the country will, certainly, boost her Gross National Product (GNP). Furthermore, the huge population will also attract investors to set up their businesses in Nigeria with the hope of harnessing the availability of cheap labour while the huge natural resources will guarantee the availability of raw materials for the industries.
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