The acting Chief Trade Negotiator and Director General, Nigerian Office for Trade Negotiations (NOTN), Victor Liman, has stated the need for a special funding intervention vehicle for effective implementation of the African Continental Free Trade Agreement (AfCFTA).
He acknowledged that the fund should be geared towards increasing access to finance by Small and Medium Enterprises (SMEs) as critical players to the successful implementation of the trade deal.
Liman, at a forum organised by the Lagos Chamber of Commerce and Industry (LCCI), said access to finance is still a major challenge hindering private sector businesses as the cost of money is too high for most SMEs who constitute about 50 per cent of the Gross Domestic Product (GDP) of the Nigerian economy.
He also called for the need to reform policies, stating that they create barriers for international trade.
In his words: “81 per cent of the rules of origin have been negotiated. There is a need to set up trade facilitation mechanisms, decongest the ports and borders in the sub-region while, also create AfCFTA trade designated corridors to ensure seamless intra-Africa trade.”
He said an increase in intra-Africa trade from 15 per cent to about 50 per cent would create a market size of about 600 million people
Meanwhile, the Secretary-General, AfCFTA, Wamkele Mene, said to achieve the success of AfCFTA, there is a need to engage the private sector as the sector constitutes 90 per cent of those in the working-age group and 80 per cent of total production in the continent.
He warned that the road ahead is going to be very challenging, stressing that the full implementation is not going to be easy, urging participating countries to prioritize initiatives aimed at creating jobs and driving industrialization.
According to him, Nigeria has a lot to benefit from areas of services, market expansion and investment in the trade pact.
Also speaking, the Secretary, National Committee on AfCFTA, Francis Anatogu, while representing the Minister for Industry, Trade and Investment, Otunba Niyi Adebayo, said Nigeria must take advantage of the pact as it presents opportunities for Nigerian businesses to expand their operations, saying that it would also expand market access that would catalyse local production which supports the nation’s Industrialisation drive.
He said the federal government is working relentlessly to mitigate the challenges of the trade deal while calling on the need to build a strong national brand to set Nigeria aside from other African countries.
“Nigeria is committed to the full implementation of the agreement as we are also implementing programmes to aggregate SMEs for export trade” he stated.
The president, LCCI, Toki Mabogunje, said the theme is part of the public engagement series of the Chamber aimed at facilitating discussions among stakeholders on the appropriate policy steps that would ensure speedy and effective implementation of the continental trade agreement.
She noted that the trade treaty marks the biggest free trade area globally in terms of the number of participating countries since the formation of the World Trade Organization in 1995, seeking to eliminate tariffs on 90 per cent of goods while also enabling micro, small, medium, and large businesses to penetrate new markets and establish strong cross-border supply chains with trade partners on the continent.
She added that AfCFTA has the potential to accelerate the socioeconomic development of the African continent, stressing that a well-implemented AfCFTA will stimulate economic growth, create jobs, and facilitate the economic diversification of African economies.
“Estimates by the United Nations Economic Commission for Africa (UNECA) revealed that AfCFTA can expand Africa’s manufacturing output to $930 billion by 2025, from $500 billion in 2016. The Brookings Institution sees Africa’s economic size rising to $6.7 trillion by 2030 from $3.4 billion in 2019 on the back of a well-implemented AfCFTA,” she said.
She added: “While the take-off of AfCFTA should be lauded, much work remains to be done as critical parts of the agreement are yet to be finalized. Several Key issues including schedules of tariff concessions, schedules of service commitment, rules of origin, investment, competition policy and intellectual property rights have not been concluded. There is still a lack of clarity on the type of value addition that must occur within an AfCFTA State party for a product to benefit from tariff reduction. A great deal of sensitization and enlightenment still need to be done on the implementation modalities, and this forms the basis for putting this event together.”