Six months later, still to domesticate Nigeria, to implement AfCFTA | The Guardian Nigeria News


• Free trade begins when crucial criteria are met, says customs

Six months into the official start of trade under the African Continental Free Trade Area (AfCFTA), Nigeria and a few other countries continue to lag as they stall the process of domestication of trade protocols in line with the implementation of the new trade regime.

With the rules of origin yet to be defined, Nigerian exporters and manufacturers will be left in the dark on the next line of action, while other countries take national positions to protect local industries and expand the regional agenda.

AfCFTA started on January 1, 2021, but some nations have yet to work out the rules of origin, which are the most important aspect of the trading framework.

Although the Nigerian Bureau of Trade Negotiation (NOTN) unveiled trade requirements for Nigerian traders under the AfCFTA in February, while also identifying 89 items that qualify for preferential trade under the deal, the delay in domestication of the treaty remains a challenge for its implementation.

With the details of the tariff lines not yet being released, manufacturers, distributors and other exporters are waiting for a comprehensive list of products that would be liberalized and restricted under the trade agreement.

The products that have been classified as eligible for preference under the Protocol on Trade in Goods include, in particular, live animals, dairy products, cocoa and cocoa preparations, sugar and sugar confectionery, beverages, spirits and vinegar, tobacco, wood and goods made of wood, photographic and cinematographic goods, Wood pulp, paper and cardboard, shoes, base metals, weapons and ammunition among others.

For travelers within the continent, goods for the recipient’s personal use that do not exceed USD 500 or USD 1200 in the case of products that constitute personal luggage, as well as goods that are sent as small packages between private individuals between the contracting states, are from the submission of a certificate of origin is excluded.

Industry experts believe that while negotiating product-specific regulations, the products identified are likely to reflect the 7 percent of tariff lines classified as sensitive by Nigeria.

As part of the AfCFTA, the federal states had agreed that 90 percent of tariffs on trade in goods would be abolished. Of the remaining 10 percent for Nigeria, 7 percent are classified as sensitive and 3 percent of the tariff lines are exempt from liberalization.

The Guardian had exclusively reported on some of the products that are protected by the federal government under the exclusive trade list.

Currently, only seven percent of the sensitive products (427 tariff lines) and three percent (184 tariff lines) of the exclusive products have been negotiated, while over 4,300 tariff lines are under the liberalized list.

Although the start of the AfCFTA has benefits for Nigeria’s trade balance as it opens up wider market space for the country’s exports and the opportunity to get cheaper imports of goods and services, its protectionist stance towards some commodities increases the country’s local capacity can not meet worries.

The Secretary General of the AfCFTA Secretariat, Mr Wamkele Mene, said the aim of the trade agreement is to become duty-free on 97 percent of all products traded on the continent over the next 15 years.

In defense of progress on the trade deal, Mene said, “I think Africans should be patient and understand that we are in the early stages of the importance of working together under a single set of rules.”

He continued: “We will learn from the experience of the European Union (EU) that it took the EU 72 years to get to this point of market intervention that it enjoys today.

“What we do is not an easy task, it is time consuming and it takes patience to see results in the years to come. I’m not worried about the slowness because normally negotiations and the implementation of trade agreements don’t happen overnight. “

The Nigerian Customs Service (NCS) informed the Guardian that AFCFTA will begin in Nigeria after the critical criteria are met.
Public Relations Officer, NSC, assistant controller, Joseph Attah, said the process is “81 percent” complete.

Attah said in response to media inquiries about AfCFTA that the list of Nigerian customs offers had been sent to NCS by the National Bureau of Trade Negotiations and the Economic Community of West African States (ECOWAS).

He said, “We have started reconfiguring the system to accommodate the AFCFTA procedures. The senior trade officials, made up of trade leaders in all African countries, still meet to set the criteria for the rules of origin. Trading in AfCFTA begins after the critical criteria are met. Right now it’s 81 percent, ”he said.

Okey Ibeke, Principal Consultant of International Trade Advisory Services Ltd., said that there are big differences in the practice of governments regarding rules of origin.

“While the requirement of substantial conversion is widely recognized, some governments use the change in tariff criterion, others use the percentage value criterion, and still others the manufacturing or processing criterion.

“In a globalizing world, it has become even more important that these member practices achieve some degree of harmonization in implementing such a requirement,” he said.

Former President of the Ship Owners Association of Nigeria (SOAN), Greg Ogbeifun, advocated measurable strategies to monitor Nigeria’s progress in seeking full participation in AfCFTA.

Ogbeifun recalled that the restrictions on the cabotage law in Nigeria were due to the federal government’s failure to comply with the provisions of the law, which provided for a five-year cabotage performance assessment that was never conducted.

He therefore warned that AfCFTA must not go the cabotage route in Nigeria by ensuring an annual performance review to measure the state of the country’s progress towards realizing their dream of becoming a big player in AfCFTA.

A maritime lawyer Emmanuel Nwagbara called for a law to regulate retail sales in Nigeria, arguing that a sector that contributed 16.4 percent of the country’s gross domestic product (GDP) should not be extradited to foreigners. He regretted that non-Nigerians now played a huge role in retail, which he believed employed most Nigerians of all ages.

His words: “We have to improve our game if we are ready to play big in AfCFTA. Not only does interest matter, but so does the impact it will have on our economy. How much will AfCFTA improve the standard of living of the average Nigerian? How much can it add to Nigeria’s GDP growth? What do we do about our investment laws? Are we looking at our investment laws so that they bring in the FOREX that we need to develop? Ghana is doing a lot in the area of ​​investment laws. “

Senior Special Assistant to the President for Public Sector Affairs and Secretary of the National Action Committee for AfCFTA, Francis Anatogu, argued that the regional trade agreement represents a golden era for chambers of commerce and industry associations and entrepreneurs in the region.

He pointed out the need to contact people who can be reached across borders in order to protect the interests of the shippers. For his part, Professor Jonathan Aremu, an advisor to ECOWAS (Economic Community of West Africa States) for the Common Investment Market (ECIM), Abuja, urged companies in Nigeria to put pressure on lawmakers to do what is necessary.

Aremu noted that Nigeria is not yet benefiting from Phase 1 of the AfCFTA implementation, which began in January, as a number of issues needed to be addressed.

The starting point for taking advantage of the protocol should be domestication of the protocol. Aremu, professor of international economic relations at Covenant University, said phase two, AfCFTA, will aim to deepen economic ties between African countries through negotiations on investment, intellectual property and competition protocols.

He indicated that Nigeria would benefit from the protocol as it would spark industrialization, transform Nigeria’s economy and help it get a fairer share of the value of its tradable goods.

Other benefits, Aremu said, include; This enables Nigerian investors to make profits by specializing their manufacturing capabilities, as each country would be concentrated where it has a comparative and competitive advantage.

Beyond the domestication of the protocol, said Aremu, who delivered the post-AGM talk on AfCFTA Investment Protocol: A Tool for Economic Growth, the potential benefits of the AfCFTA protocol rely on complementary measures in Nigeria to secure goods and people can actually cross borders.

He also called for the reduction of infrastructure deficits, especially in roads, ports and cargo handling, customs and administrative requirements that directly affect the ability of the economy to move traded goods inside and outside the country’s borders.

For his part, the Chairman of the Board of Directors and Chairman emeritus of the International Chambers of Commerce Nigeria (ICCN), Chief Olusegun Osunkeye, stressed the need to raise awareness among Nigerian businesses about the AfCFTA Protocol and stressed that much work was needed to ensure that businesses were running in Nigeria do not lose the creditable benefits of the AfCFTA protocol.

He wondered why a country that has signed the protocol could expel companies from other member countries without properly following the embedded protocol.

Osunkey also expressed concern about the Dispute Settlement Protocol, as disagreements between private companies between member states are viewed as disagreements between states parties.

He emphasized that, as part of AfCFTA, Nigerian companies should identify and consider winners and losers in certain sectors in order to see where there are political incentives and where obstacles could lie in the implementation of national AfCFTA strategies.

In addition, the Chairman of the ICC Nigeria and Regional Coordinator for Sub-Saharan Africa, Babatunde Savage, called on Nigerian companies and chambers of commerce to present a common front to ensure the maximum benefit from AfCFTA.

According to him, the events of 2020 tested the world in ways that were hardly expected.

“It has put the resilience of companies, people, processes, technologies, cultures, etc. to the test. Although the year was anything but easy, it nonetheless made retail, retail and companies in general stronger, better, more agile and prepared for a fast. “- the changing world that regrets the digital channels.”

Savage to rebuild after COVID-19, global supply chains and trade lines must be open and free from encumbrances; Business facilitation and tax incentives to encourage foreign direct investment, particularly in light of the AFCFTA.

In his opinion, steps must be taken immediately to legally recognize the use of electronic commercial documents instead of paper documents in order to ensure the further dispatch and release of goods.

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