By Haruna Gimba with agency report
Nigeria’s Vice President, Professor Yemi Osinbajo has asked African countries brace up for the effective implementation of the Africa Continental Free Trade Area (AfCFTA) agreement.
He said the continent should ensure that trade negotiations with the rest of the world be based on the free trade agreement rather than deals separately endorsed by regional economic blocs.
Prof. Osinbajo stated this in his keynote at the 61st annual conference of the Nigerian Economic Society (NES) themed “African Continental Free Trade Area (AfCFTA) in Post COVID-19 Era: What Next for Nigeria?”
The event, which held virtually, was attended by a host of Nigeria’s leading economists, while Prof. Sarah Anyanwu, NES President, in her remarks after the VP’s keynote, commended both President Muhammadu Buhari and the Vice President. She added that “Prof. Osinbajo is a friend of our society, because he understands economic development.”
“One important objective of the AfCFTA is to overcome the economic fragmentation of the continent by bringing the regional economic blocs together in a common arrangement.
This being the case, African countries should look to negotiating trade treaties with other parts of the world on the basis of AfCFTA rather than through arbitrarily designed regional blocs. African countries should not allow themselves to be lured into arrangements which do not serve their long-term development objectives,” Prof. Osinbajo said.
Speaking further about how the agreement can bolster trade and development on the continent, the Vice President said, “we must, of course, continue to bear in mind, especially here in Nigeria that the AfCFTA is not a magic wand that automatically brings about growth and prosperity.”
“The reality is that if care is not taken, trade liberalization can expose the Nigerian economy to unfair competition and sharp trade practices, with adverse consequences for our producers who might have to close down their businesses, and for our workers who would then lose their jobs.
“Successful implementation of the AfCFTA requires financing to address various implementation challenges and to promote arrangements in support of integration.
“For instance, in addition to making up for potential losses of tariff revenues, African countries will face implementation costs, including undertaking reforms, establishing new trade-related bodies, improving and upgrading existing facilities.
“Finding the resources to undertake these activities at a time like this when we lack fiscal space will, of course, prove to be very difficult for Nigeria and other African countries. Our economists should accordingly help to come up with innovative financing solutions for our economies,” the Vice President added.
Making the point about the AfCFTA being a guide for decisions on national economic blueprints, the Vice President said, “apart from reducing the spread of the COVID-19 virus and mitigating its effect on the domestic economy, Nigeria must have an interest in promoting an AfCFTA that catalyses regional value-chains, enables free movement of people, attracts investments and improves the continental payments system.
“As we seek to use the opportunities, we should remain alert to the need to create conditions that will enable our businesses to be able to compete and thrive within the AfCFTA. We can no longer plan without fully considering the AfCFTA; all planning and budgeting documents must take it into account. This explains why the current successor plan to the ERGP has the AFCFTA as an important reference.”
Regarding the Federal Government’s N2.3 trillion stimulus package, the VP said the plan was designed to mitigate the shock, tackle the vulnerabilities, create and protect jobs, as well as rescue businesses and reposition the economy.
“Our projections showed that without the stimulus, the economy was set to contract by -4.4% in 2020, but with implementation, including ramping up local production, we should be able to limit the negative growth to -0.59%.
“Let me be clear, our desire to ramp up local production is not a call to autarky but rather an expenditure switching approach which can complement the AfCFTA desire to deepen regional value-chains,” he added.