Vice-President Yemi Osinbajo yesterday in Abuja said African Continental Free Trade Area (AfCFTA) agreement possessed the capacity to harm Nigeria’s economy and force many Nigerian manufacturers out of business.
The vice-president stated this in a keynote address at the 61st annual conference of the Nigerian Economic Society (NES) with the theme: “African Continental Free Trade Area (AfCFTA) in Post COVID-19 Era: What Next for Nigeria?”
Nigeria signed the AfCFTA agreement on July 7 last year after pulling out initially, as a result of concerns expressed by Nigerian manufacturers that other Africa countries would take advantage of the nation’s large economy to turn the country into a dumping ground.
Eventually, when President Muhammadu Buhari signed the agreement on July 7, 2019, after wide consultations with stakeholders, he demanded for fair trade with Nigeria.
But Osinbajo, while speaking at the virtual event, said the agreement could expose the Nigerian economy to unfair competition.
According to him, AfCFTA’s implementation could expose the country to sharp practices with dire consequences for its manufacturers who may become bankrupt while their workers become jobless.
“The reality is that if care is not taken, trade liberalisation 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,” he said.
The vice-president therefore said as Africa begins to brace up for implementation of the agreement, “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.”
He observed that Nigeria would go through certain difficulties in the effort to implement the agreement, observing that African countries would need to undertake reforms, establish new trade-related bodies, improve and upgrade 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,” Osinbajo added.
The vice-president noted that the entire intra-Africa trade in goods as at 2017, amounted to only $135 billion, which he put as only about 15 per cent of Africa’s total trade.
According to him, this paltry trade volume is in sharp contrast to what obtains in other regions, such as Europe and Asia which he said record 70 per cent and 60 per cent of intra-trade volume, respectively.
Speaking on AfCFTA and COVID-19, Osinbajo said: “One thing that has become clear from our experiences of the last few months is the need for a vibrant and successful AfCFTA.
“The pandemic has exposed our dependence on commodity exports to other parts of the world and on the import of manufactured goods from them.
“The imposition of export bans, including on food items by some countries and the disruption of global supply chains at the height of the pandemic, showed just how exposed and vulnerable African countries are because of limited productive capacity and a lack of regional value chains.”
He advised the public to engage in informed commentaries that could shape the economy, noting that some comments being made were baseless and unhealthy for the economy.
He said: “I find very often that some public commentators make assertions that have no basis in economic theory or practice, and because they dominate the public space, they contribute to public misunderstanding of economic principles and their application to public policy.
“Some of you should take up the gauntlet and help to shape an informed and reasoned national discourse on the economy.”