Experts from Nigeria’s
business community have preached cautious optimism in adopting the provisions
of the African Continental Free Trade Area (ACFTA) agreement in view of a
deficit of vital prerequisites among member states.
Majority of their concerns
revolve around fragmented trade patterns, infrastructure deficit, poor history
of intra-African trade and low exploitation of raw materials through
manufacturing.
Barring their views at the
Lagos Chamber of Commerce International Arbitration Centre (LACIAC) roundtable
on Tuesday with the theme “Maritime Business and Disputes”, the experts
advocated increased efficiency, upgrade of infrastructure and automation of
processes in order to deepen regional integration and create a single
continental market for goods and services.
Speaking on “The African
Continental Free Trade Area – growing export market and the potentials for the
maritime industry”, Executive Director of the Africa International Trade &
Commerce Research Limited, Mr Sand Mba, queried Africa’s wisdom in embracing
trade liberalisation at a point in time when protectionism was gaining ground
among influential global markets.
While he agreed that
integration was crucial to increase trade on the continent, Mba also
highlighted the fragmented nature of transnational trade in African and
Nigeria’s failure to make the ECOWAS Trade Liberalization Scheme (ELTS) work in
its favour.
The policy advisor therefore,
encouraged business operators to put measures in place to harness the potential
of Africa’s one-billion-market through business-friendly regulatory policies,
deployment of technology and expanding operational scope on the
continent.
Managing Director of the
Nigerian Ports Authority (NPA), Ms. Hadiza Bala-Usman in her contribution
listed efforts to improve maritime and port connectivity in Africa and also
assessed the readiness of African seaports for the aggressive competitiveness
that accompanies continental market access.
“In Nigeria, we are preparing
for ACFTA with development of deep seaports to serve as transhipment hubs,
digitization of port processes and improved security surveillance of Nigerian
waters”, Hadiza, who was represented by the General Manager, Managing
Director’s Office, Dr Chinwe Abama, said.
She noted that other
interventions include the development of a Single Window framework,
introduction of electronic systems of payment and upgrade of port
infrastructure with emphasis in multimodalism.
However, the Manufacturers’
Association of Nigeria (MAN) did not share the same optimistic
sentiments.
Delivering a scathing analysis
of Nigeria’s readiness for ACFTA, representative of the President,
Manufacturers’ Association of Nigeria (MAN), Chief Reginald Odia, said that the
country’s prolonged trade in primary commodities was a severe threat to
benefitting from the ACFTA regime.
“Failure to build
manufacturing capacity, coupled with the poor attitude to made in Nigeria
goods, has stagnated the sector’s contribution to the nation’s Gross Domestic
Product (GDP) at less than 6% since pre-independence”, Odia said, “and this
puts us on unequal footing with the rest of Africa who have robust
manufacturing sectors.”
To reiterate his position
about Nigeria’s lack of preparedness for the ACFTA regime, Odia noted that the
percentage of intra-continental trade stood at less than 15%, while Africa’s
trade with the rest of the world measured at less than 10%.
On that note, he advised
government to encourage the establishment of manufacturing clusters aimed at
gaining competitive advantage, provide interventions and subsidies to galvanize
production, as well as adopt technology to boost innovation. He also
highlighted the significance of adding value to raw materials and the
development of Research and Development centres to enable Nigeria domicile
wealth and build capacity.
Executive Secretary of the
Nigerian Shippers’ Council, Hassan Bello, in explaining the Council’s role in
the ACFTA regime noted that its emphasis on stakeholders’ consultation and
granular analysis of the agreement to Nigeria’s economic fortunes was
responsible for the federal government’s delay in ratifying the deal. This he
said, caused other member-states to subject the agreement to further
scrutiny.
“We had concerns about the
impact of the ACFTA deal on the Nigerian economy especially with regard to
manufacturers and shippers. Our concerns encompass the readiness of Nigerian
ports in terms of infrastructure, port connectivity indices and the lack of
competition among terminal operators in Nigerian ports”, he said.
Bello noted further concerns
bordering on multiple regulatory levies and singled out the tacit silence
regarding which agency would be responsible for coordinating Nigeria’s
readiness to implement the ACFTA.
In this regard, Bello revealed
that as part of its preparations for the ACFTA era, the Council was in the
process of establishing a Maritime Bank to cater to the peculiar challenges of
the shipping community in Nigeria and provide financial incentives to enable
stakeholders benefit from the unfolding developments.
Addressing prospects for
indigenous shipping in the ACFTA era, a representative of the African Ship
Owners Association, Mrs Olufunmilayo Folorunso said that this was the time for
fleet development in Africa.
She however substantiated
Chief Odia’s position about Nigeria’s low manufacturing capacity with a caveat
stating that “If you do not have trade, you cannot acquire vessels. It is a
known fact in the shipping industry that trade, driven by manufacturing,
attracts finance for vessel acquisition.”
Folorunso further clarified
that under ACFTA there would be a lot of changes to shipping stakeholders,
trade patterns and sources of cargo. She therefore reiterated the need to
develop trade, address political will to increase ship ownership as well as
subsidize the shipping industry which is arguably the second highest grossing
sector of the economy after oil.
In his submission on
integrating the “African continent for the development of maritime trade –
eliminating trade barriers and dispute management”, Professor of International
Business and Economics Laws, OAU Ile-Ife, Professor Ademola Popoola, advised
proponents of the ACFTA in Nigeria to revisit defunct bilateral agreements, complete
transnational highways and rail connections and develop a legal framework and
disputes resolution mechanism to address issues that may arise from the
operations.
In the same vein, a Maritime
& Logistics Consultant, Mrs Obiageli Duru, proposed further strategies to
the seamless implementation of the ACFTA.
According to her, “We need to
simplify processes especially at the borders and harmonize trade documents in
the cargo clearing process, while tariff schedules and a system for addressing
non-tariff barriers should also be put in place.”
The experts therefore advised
the federal government to adopt an integrated approach to optimize the
potential of trade deal and solicited the cooperation the private sector to
ensure its positive impact on the Nigerian economy.
