Home Business Nigeria undergoing reforms for AfCFTA [Feature]
Nigeria undergoing reforms for AfCFTA [Feature]

Nigeria undergoing reforms for AfCFTA [Feature]

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Intra-Africa trade has been historically low due to numerous trading rules and tariffs of many countries, leading to untapped potential in the region.

To bridge the gap and ensure that there exists a seamless trade within the region, the African Continental Free Trade Agreement (AfCFTA) was formed.

The general objectives of the agreement are to create a single market, deepening the economic integration of the continent, establish a liberalised market through multiple rounds of negotiations and aid the movement of capital and people; and facilitate investments.

AfCFTA is also meant to move toward the establishment of a future continental Customs Union, achieve sustainable and inclusive socio-economic development, gender equality and structural transformations within member states.

It aims at enhancing competitiveness of member states within Africa and in the global market, encourage industrial development through diversification and regional value chain development, agricultural development and food security.

AfCFTA is a trade agreement which is in force between 28 African Union member states. It was signed in Kigali, Rwanda, on March 21, 2018.

As at July 2019, 54 states had signed the agreement including Nigeria.

AfCFTA, which establishes a single continental market for goods and services, seeks to increase intra-African trade by cutting tariffs and harmonising trading rules at the continental level.

If successful, AfCFTA is expected to boost intra-African trade by 52.3 per cent by 2022.

It is an opportunity for countries and companies to help each other grow, as they have done in other regions and it is so important to have supportive policies and putting infrastructure on ground.

The agreement is seen critical for growth, job and wealth creation for Africa and its 1.27 billion people.

Maritime experts are of the view that Nigeria needs to tackle many challenges which arise from the state of the ports, access roads to the ports that can hinder the smooth take off of the agreement.

The goal is to allow free movement of business travellers and investments; and create a continental Customs Union to streamline trade and attract long-term investments.

When trade barriers are removed, more opportunities are created and so the need to ensure that the country is not caught up with the many challenges it faces at the ports.

The Managing Director, Nigerian Ports Authority (NPA) Ms Hadiza Bala-Usman, at the 2019 International Ports and Terminal (NIMPORT) Conference and Expo, says the African Continental Free Trade Agreement (AfCFTA) will boost trade in Nigeria.

Bala-Usman was represented at the conference by Mr Durowaiye Ayodele, Assistant General Manager, Operations in NPA.

She says the Nigerian ports are undergoing some reforms in form of infrastructure and others.

The managing director notes that this will go a long way in ensuring a seamless connectivity.

“Investment in infrastructure will give opportunity to link critical hinterlands with rails, waterways, rehabilitation of roads leading to the ports and deliberate policies put in place to improve the transport sector.

“All the investments in infrastructure with the signing of the AfCFTA are aimed at integrating the economy of the country and removing barriers,” she explains.

Bala-Usman suggests that there should be a deliberate policy targeted toward improving the transport sector.

She explains that all issues such as dredging of seaports, corruption, manual processes in the sector; when handled, will ensure the country partakes effectively in the regional trade.

Mr Ola Adeeyinwo, Deputy Director, Nigeria Railway Corporation (NRC), adds that movement of cargo to the hinterlands has challenges due to the state of the rail tracks.

According to him, it is only the Apapa port that is connected by rail and this affects the evacuation of cargo.

Adeeyinwo says after the port concession, most of the rail lines were removed.

Mr Fortune Idu, Chairman, NIMPORT, a port and terminal promotion body, advises that the next level for regional trade development for African countries is for them to come together and form a trading bloc.

Idu says signing of the agreement by President Muhammadu Buhari is the long-awaited antidote needed to prepare Africa to compete in the global trade as a unified body.

According to him, trading between countries has not been seamless and the continent has not been fully integrated in form of trade and connectivity.

The next level for regional trade development should come with accelerated port and logistics infrastructure development, trade integration and seamless facilitation and hinterland rail connectivity.

“This next level will present the region as a global trade contender to Europe, China and America and the rest of the world,” he suggests.

Idu, however, notes that the maritime sea corridors will continue to prove the greatest capacity for volume of trade and movement.

He is optimistic that the rail connectivity to hinterland will help guarantee that this volume is evenly distributed seamlessly.

Idu urges African countries to work hard in creating the links by developing coastal water navigational and shipping capacities and regional pipelines where port cities like Lagos, Port Harcourt, Cotonou, Douala, others, will be connected directly.

Mrs Funmi Folorunsho, Secretary General, African Shipowners Association (ASA) advises government to invest in ships in order to trade in line with AfCFTA.

According to her, since the signing of the agreement, nobody has said anything about the stand of the maritime industry and what the practitioners tend to benefit from it.

Folorunso points out that there should be policy development toward this effect.

she says there is cargo to carry and this period, with the signing of the agreement, it is time to invest in shipowners in the country.

On the whole, if the ports have adequate infrastructure like rail links to hinterlands, good access roads with favourable transport policies, the upsurge in trade as a result of the agreement will be seamless.

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