Post by Trade facilitator on Jul 20, 2022 0:46:47 GMT 1
Does Nigeria Possess The Structures Required To Implement AfCFTA? The Answer Is Frightening.
What is AfCFTA?
The African Continental Free Trade Area (AfCFTA) is a free trade area encompassing most of Africa.
It was established in 2018 by the African Continental Free Trade Agreement, which had 43 parties and another 11 signatories, making it the largest free-trade area by number of member states, after the World Trade Organization, and the largest in population and geographical size, spanning 1.3 billion people across the world's second largest continent.
The operational phase of the AfCFTA was launched during the 12th Extraordinary Session of the Assembly of the Union on the AfCFTA in Niamey, Niger on 7 July 2019.
Start of trading under the AfCFTA Agreement began on 1 January 2021; however, no trade has as yet taken place under the AfCFTA regime.
However, no trade has taken place under the AfCFTA. This is our major concern in this article, especially as it concerns Nigeria.
What actually is the problem, are there obstacles that are yet to be cleared but are still there?
We are also going to look at excerpt of an interview granted to The Guardian Newspaper recently by Blessing Irabor.
Blessing Irabor is the current president, Organization of Women in International Trade (OWIT) Nigeria and Chair for the OWIT Africa Liaison 2022. She is also the President/CEO, Blissomo International Ltd, providing services in Agriculture, Tourism, Business Development and Consulting. In the interview she talked about challenges hindering Nigeria’s export and how the country can improve its non-oil export and international trade in general.
Briefly, according to the National Bureau of Statistics, Nigeria recorded N1.94tn foreign trade deficit in 2021.
According to its ‘Foreign trade in goods statistics Q4, 2021 report’, this was an improvement from N7.37tn trade deficit recorded in 2020.
It means that for two consecutive years, 2020 and 2021, the country has been experiencing trade deficits.
Look at what Blessing Irabor said when a question was put to her about the widening trade deficits:
"The wide trade deficit in Nigeria has a huge consequence especially on the foreign exchange (FX) market and employment creation. The country, with enormous unemployment and FX challenges, is by implication ‘outsourcing’ critical segments of the economy that create jobs (secondary production) to other economies. In simple terms, Nigeria has continued to export jobs owing to its inability to domesticate heavy factor industries. To address this, Nigeria has to take into priority the measures to address infrastructural challenges, regulatory constraints, security concerns, restricted access to foreign exchange and other related problems that have discouraged exportation of goods from Nigeria".
See her answer to another question on export:
What would you say are the major challenges hindering Nigeria’s export today?
"So many, but I’ll say insecurity as a threat to the economy; production of goods below approved international standards; substandard packaging of goods; inadequate infrastructure – transportation and logistics; warehouses and storage facilities which increase loss and damage; overcrowded ports; ill-conceived government policies that stifle businesses and reduce investor confidence. Others are poor/zero access to finance; a lack of understanding of foreign markets and regulations and complexities associated with foreign exchange".
The question now is, if it is so difficult for us to do simple export, how are we going to compete on the platform of AfCFTA? Under this there will be gradual removal of tariffs. How does it affect trade when eliminating tariffs?
Global agricultural trade could increase if tariffs on agriculture were removed or trade costs were reduced. The removal of tariffs could shift resources away from commodities that might be inefficient toward the production of commodities that could be produced more efficiently.
Therefore, where are the structures to make production of goods more efficiently in Nigeria today? We will continue this article by looking at what the country is required to do to be able to properly participate in the AfCFTA.
Our company is one of the best companies in Agro-Export Business in Nigeria today, we train individuals and corporate organizations on how to do Export Business the right way; if you are interested, please contact the admin of this forum now for further details.
What is AfCFTA?
The African Continental Free Trade Area (AfCFTA) is a free trade area encompassing most of Africa.
It was established in 2018 by the African Continental Free Trade Agreement, which had 43 parties and another 11 signatories, making it the largest free-trade area by number of member states, after the World Trade Organization, and the largest in population and geographical size, spanning 1.3 billion people across the world's second largest continent.
The operational phase of the AfCFTA was launched during the 12th Extraordinary Session of the Assembly of the Union on the AfCFTA in Niamey, Niger on 7 July 2019.
Start of trading under the AfCFTA Agreement began on 1 January 2021; however, no trade has as yet taken place under the AfCFTA regime.
However, no trade has taken place under the AfCFTA. This is our major concern in this article, especially as it concerns Nigeria.
What actually is the problem, are there obstacles that are yet to be cleared but are still there?
We are also going to look at excerpt of an interview granted to The Guardian Newspaper recently by Blessing Irabor.
Blessing Irabor is the current president, Organization of Women in International Trade (OWIT) Nigeria and Chair for the OWIT Africa Liaison 2022. She is also the President/CEO, Blissomo International Ltd, providing services in Agriculture, Tourism, Business Development and Consulting. In the interview she talked about challenges hindering Nigeria’s export and how the country can improve its non-oil export and international trade in general.
Briefly, according to the National Bureau of Statistics, Nigeria recorded N1.94tn foreign trade deficit in 2021.
According to its ‘Foreign trade in goods statistics Q4, 2021 report’, this was an improvement from N7.37tn trade deficit recorded in 2020.
It means that for two consecutive years, 2020 and 2021, the country has been experiencing trade deficits.
Look at what Blessing Irabor said when a question was put to her about the widening trade deficits:
"The wide trade deficit in Nigeria has a huge consequence especially on the foreign exchange (FX) market and employment creation. The country, with enormous unemployment and FX challenges, is by implication ‘outsourcing’ critical segments of the economy that create jobs (secondary production) to other economies. In simple terms, Nigeria has continued to export jobs owing to its inability to domesticate heavy factor industries. To address this, Nigeria has to take into priority the measures to address infrastructural challenges, regulatory constraints, security concerns, restricted access to foreign exchange and other related problems that have discouraged exportation of goods from Nigeria".
See her answer to another question on export:
What would you say are the major challenges hindering Nigeria’s export today?
"So many, but I’ll say insecurity as a threat to the economy; production of goods below approved international standards; substandard packaging of goods; inadequate infrastructure – transportation and logistics; warehouses and storage facilities which increase loss and damage; overcrowded ports; ill-conceived government policies that stifle businesses and reduce investor confidence. Others are poor/zero access to finance; a lack of understanding of foreign markets and regulations and complexities associated with foreign exchange".
The question now is, if it is so difficult for us to do simple export, how are we going to compete on the platform of AfCFTA? Under this there will be gradual removal of tariffs. How does it affect trade when eliminating tariffs?
Global agricultural trade could increase if tariffs on agriculture were removed or trade costs were reduced. The removal of tariffs could shift resources away from commodities that might be inefficient toward the production of commodities that could be produced more efficiently.
Therefore, where are the structures to make production of goods more efficiently in Nigeria today? We will continue this article by looking at what the country is required to do to be able to properly participate in the AfCFTA.
Our company is one of the best companies in Agro-Export Business in Nigeria today, we train individuals and corporate organizations on how to do Export Business the right way; if you are interested, please contact the admin of this forum now for further details.
