Guobadia, Chairman, Presidential Panel on AfCFTA Ask Buhari to Sign

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A special government panel has recommended that President Muhammadu Buhari should sign Nigeria up for the landmark African Continental Free Trade Agreement (AfCTA), ahead of a key meeting of African leaders. The panel was formed by Buhari in March last year to assess the impact of AfCTA after Nigeria abruptly pulled out of signing the deal adopted by a majority of African nations.From left: President Muhammadu Buhari receiving a report from Alhaji Abba Kyari, Chief of Staff / Chairman, Presidential Committee on Impact and Readiness Assessment, African Continental Free Trade Area (AfCFTA) Agreement and Mr Desmond Goubadia, Chairman, Technical Work Group of AfCFTA during the presentation of their report at the Presidential Villa in Abuja on Thursday“Our reports show that, on balance, Nigeria should consider joining the AfCFTA”, the panel’s chair, Desmond Guobadia, said in a statement to the president, after submitting the report. The trade deal “provides immense opportunities for Nigeria’s manufacturing and service companies to expand to Africa”, Guobadia said.


The panel however recommended Buhari delay “liberalizing” and ratifying the deal which would open Nigeria’s markets to the continent, in order to mitigate the agreement’s negative impacts. “AfCFTA is not without major risks”, it said, warning that the deal could lead to increased smuggling and abuse of ‘rule of origin’ labels on products. The risk is that it will provide an incentive for traders to disguise goods imported from outside the continent as made-in-Africa goods”, the report warned.


The continental pact which formally came into force last month represents an ambitious African Union (AU) plan that seeks to integrate and boost intra-African trade. Nigeria had been a key backer of the plan for several years yet suddenly pulled out last March, days before other African countries endorsed the document at a summit in Rwanda.


Calling for more time to address concerns from business and labor unions, Buhari instead formed a panel to engage industries across the country on the impact of the deal on Nigeria. “Our position is very simple, we support free trade”, Buhari said, “as long as it is fair and conducted on an equitable basis”.

Ahead of an AU summit of African leaders in the Niger Republic next week, the AfCFTA will again be on the agenda with Nigeria widely expected by industries and labor unions in Nigeria to at least partially adopt the agreement. The report “will form part of the consideration in our decision on the next steps on the AfCFTA,” Buhari said.


Presidency sources said the president, who had allied with the concerns of the private sector on the inherent negative consequences of the agreement, which might open up the country for dumping at the expense of the domestic market, has now been persuaded to table these concerns before the AU and negotiate favorable conditions for Nigeria before putting pen to paper. Buhari had told the committee that the FG would review its submissions and consider them in making its final decision on the matter.


But a presidential source said Buhari had caved in to pressure from pro-AfCFTA proponents having been persuaded that his concerns could be allayed by further negotiations with other AU heads of. Nigeria’s withdrawal from the signing of the agreement had met with criticism from former president, Olusegun Obasanjo, who has been championing the need for the country to sign the pact.


Obasanjo had said last Thursday at the 2019 Africa Export-Import Bank (Afreximbank) event in Moscow, Russia, that Nigeria had no justifiable reason for not signing the agreement, which countries such as Eritrea, Niger and even Benin, a neighboring country, had signed. But while presenting the committee’s report, Guobadia, listed reasons why the committee recommended that Nigeria signs the agreement.


According to him, signing the agreement would present Nigeria with the opportunity for its manufacturing industry to expand its business frontiers in Africa, noting that trade barriers, which had limited expansion of business in Nigeria, would be corrected by the agreement. He said opportunities offered by the agreement would make African goods more attractive and cheaper.


While acknowledging the risks inherent in Nigeria’s signing AfCFTA, which include smuggling and abuse of rules of origin, Guobadia said the committee believed that such risks would be high for Nigeria bearing in mind that 92 percent of its imports come from other parts of the world and smuggling.


Guobadia added that the risks in AfCFTA is compounded by lack of capacity, resources and will by some African countries to secure their borders, pointing out that the committee realized that certain costs would be required to manage negative impacts of the agreement.


However, to guard against the adverse impacts of the agreement, the committee recommended: the extension of the timelines to achieve trade liberalization and integration ambitions and possibly replacing them with a readiness criteria; introduction of explicit rules on import quota restrictions; adoption of a common market access offer for trade in goods and services for ECOWAS, including synchronized Sensitive and Exclusive Lists; adoption of the common market access offer for trade in goods to replace and supersede the 2013 ECOWAS Common External Tariff (CET), which created vulnerabilities for Nigerian industry and manufacturing; and adoption of appropriate continental customs cooperation and other mechanisms to tackle predatory trade.


Responding, Buhari said AfCFTA would have negative and positive impacts. The president said free trade was good as long as it was fair and done on equitable basis and that Nigeria as the largest economy and the most populous country in Africa could not rush to sign the agreement. According to him, if the agreement must succeed, policies aimed at promoting production in Africa must be developed, adding that if Nigeria allows frivolous importation; its trade will be dominated. He also said the implication of such development would be the prosperity of importing “while landlocked nations will continue to suffer and depend on aid.”

The president said Nigeria would henceforth ensure that agreements that it negotiated would boost business opportunities in the country, adding that the country should only pursue an agreement that would create wealth for investors and jobs. In addition, Nigeria will also focus on agreements that enhance the prosperity of the country.


The president said the committee report would play crucial roles in the eventual decision that the federal government would take on AfCFTA. He commended members of the committee whom he said had deployed their skills and energy to come up with the report, saying Nigeria would ensure negotiated agreements create business opportunities for Africa’s manufacturers, service providers and innovators.


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