AFCFTA: Fears and a voice from Port Harcourt
• Why REIF supported signing of the deal • Nigeria must now meet others in Ease of Doing Business •Nigeria just can’t compete
The much-talked about African Continental Free Trade Agreement ( AFCFTA) has been signed by Nigeria after about two years of official delay and actually over 20 years of evading a thing like that, according to experts and investors.
Now, the business segment in Port Harcourt has shared an opinion, mostly fear and warning. In an exclusive interview in Port Harcourt, the president of the Rivers Entrepreneurs and Investors Forum (REIF), Ibifiri Bobmanuel, gave huge insights and pointed the only way left to Nigeria at this point.
Q: Nigeria has just signed, is it good news or are there apprehensions because your group and the EU clamoured for greater intra- African trade? The EU had always urged Nigeria to focus on Africa and West Africa, not Europe or America. Is everybody happy now?
Ans: It’s a very good topic to discuss. We were very privileged to be on the forfront with the EU, the AU and
ECOWAS in urging the FG to sign the AFCFTA. Nigeria was basically the one holding back the kick-off of AFCFTA. We were on this process for about eight years back. For us at REIF, we knew Nigeria was not ready to sign the agreement but we saw it as an opportunity to put the loose ends together before signing it.
Yes, the agreement comes with a lot of opportunities and jobs but we needed to be ready for it. From the lay man’s point of view, you look at the Ease of Doing Business Index in Africa. Where does Nigeria stand? That is what should matter. Nigeria is not doing well on this. What are the items to consider? Consider how prepared or how hospitable your business climate is. How free is it? We have bottlenecks in Nigeria. Look at power; no serious supply. We cannot boast of 12 hours stretch in 30 days in a month.
Nigeria just cant compete: If you look at other sectors like infrastructure; we are extremely poor. Look at the legal framework, well, fairly well but comparing it with other countries in most of our competitors in Africa, you find we are far behind. These point to the fact that
Nigeria is just not ready. We are only ready in grabbing the opportunities but we are not ready to compete.
Some small countries such as Niger and Benin Republics ( that we use to supply) are far ahead of us in regular power supply. Some have 24-hours light. If you now open our borders to AFCFTA, you see we are not ready for the potentials.
Every African country would now have access to Nigerian market just like the EU with one custom system, one currency, etc. If we are going to compete that way, it is not going to favour Nigeria. It simply means that investments that are ordinarily in Nigeria and FDIS that should come into Nigeria would obviously migrate to better climates in Africa.
Today, our company ( Bobtrack) has invested heavily in Nigeria and looking at money we spend on security, power, water, infrastructure, etc, it is not going to be favourable for us to continue in Nigeria. It would be better to migrate to Benin Republic and bring in the goods to Nigeria because Nigeria is the largest market in Africa. This is what most manufacturers look at.
The result will be that Nigeria will become the dumping ground in Africa. The moment the borders are reopened, it will be a rush. The amount the Nigerian Customs make for Nigeria (about the second highest revenue earner for Nigeria), if you open to AFCFTA, this would crash.
What would have compensated should be jobs, but jobs are going to migrate away from Nigeria to other African countries because every investor first looks at suitability of climate. How do you calibrate a climate? You would consider security, lowest cost of power (the amount of money companies spend on power takes the bulk of their annual budgets), infrastructure (roads, housing, etc), taxes, etc. If you add up all of this and calculate, look at Nigeria and other countries such as Togo, Ghana, Chad, South Africa; it’s no need comparing.
Today, major companies are heading to Ghana. It provides them better climate and shorter distance to the market they look at in Nigeria. NISAN is going to Ghana. Toyota already in South Africa is now going to Ghana. Volkswagen is doing same. It points to one thing; stay in Ghana, attack Nigeria market.