A university don, Professor Ellis Idemobi of the Department of Business of the Chukwuemeka Odumegwu Ojukwu University, Igbo-Ariam, Anambra State, has said that Nigeria lacks the capacity to benefit from the Africa Free Trade Area (AfCFTA) agreement unless fundamental reforms are made to improve infrastructure deficit and security challenges hindering business development in the country.
Prof. Idemobi, who stated this at the presentation session of the Nnamdi Azikiwe University Business School International Conference recently, said it is understandable that the free trade agreement offers the country a unique continental market access that could be supported with increasing focus on industrialisation as a catalyst for growth and efforts of the government to shift away from over-reliance on the volatile oil exports to boosting Nigeria’s manufacturing sector and exports.
He stated: “African countries are expected to look inward and make it easier to trade with one another by removing current barriers to increased trade on the continent, such as high tariffs. Having access to a larger market of around 1.2 billion Africans will surely trigger industrialisation and manufacturing across the continent and, in turn, create vast employment opportunities on a continent that is seriously plagued by massive unemployment and migrant crisis.”
Despite these mouth watering advantages, Nigeria stands to gain as Africa’s biggest economy. But Idemobi doubted the competitiveness of Nigerian manufacturing firms against their counterparts from other African countries with better national factor conditions, fearing that Nigeria may become a dumping ground for African goods and services just like Chinese imports.
According to Idemobi, since Nigerian manufacturers must first satisfy the domestic market before exporting the surplus, it is almost impossible to target the export market with the current capacity utilisation falling below 55 per cent. He stated that it is only in the cement and beer sub-sectors that Nigeria seems to have achieved some level of domestic market self-sufficiency and minimal export capacity.
He advised governments at all levels and political class to tackle infrastructure and insecurity of lives and property. These critical issues, according to the don, have adversely affected economic growth for many years.