Navigating the Path to AfCFTA: Opportunities and Challenges

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As Nigeria prepares to join the Guided Trade Initiative of the Africa Continental Free Trade Agreement (AfCFTA) this April, businesses within and beyond its borders must gear up to leverage the potential benefits that lie ahead.

Africa’s economic landscape is poised for transformation with the implementation of the AfCFTA, promising reduced tariffs of up to 90% on intra-continental trade for goods manufactured within the continent. Additionally, the agreement aims to dismantle barriers hindering trade in services, paving the way for increased economic integration across Africa.

Numerous businesses across the continent are gearing up to seize the opportunities presented by AfCFTA. Tech startups and financial institutions are eyeing innovations in intra-continental payment solutions, while shipping companies and freight forwarders anticipate increased trade volumes. Notably, countries like Rwanda and Kenya have set a precedent by easing immigration regulations for citizens of AfCFTA member states, fostering greater mobility and collaboration.

However, in Nigeria, progress towards full implementation of AfCFTA has encountered some delays. While the Guided Trade Initiative (GTI) pilot program is underway, Nigeria is yet to meet certain legislative requirements necessary for full participation. Despite this, the Executive Secretary of the National Action Committee on Implementation of AfCFTA, Olusegun Awolowo, projects that Nigeria will join the program by April, aligning with other African nations prioritizing trade in various commodities.

For businesses seeking to capitalize on AfCFTA’s provisions, proactive measures are essential. Obtaining certificates of origin and complying with export standardization requirements are crucial steps. Additionally, businesses must navigate industry-specific regulations and conduct due diligence on trading partners. Contract documentation and formalization protocols should not be overlooked to ensure smooth cross-border transactions.

Meanwhile, in a landmark decision, the Federal High Court of Nigeria has affirmed the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s (NMDPRA) authority to impose and collect levies on petroleum products sold in Nigeria. This judgment underscores the regulatory framework established by the Petroleum Industry Act 2021 (PIA) and its subsidiary legislation.

The court’s ruling has significant implications for petroleum producers, affirming their liability to pay levies on products sold domestically or exported. This decision reinforces the NMDPRA’s regulatory powers and underscores the importance of compliance within the petroleum industry.

As Africa navigates the path to economic integration through initiatives like AfCFTA, businesses must remain vigilant, adapt to regulatory changes, and seize opportunities for growth and collaboration across borders.

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