AfCFTA and Dialogue on Nigerian Trade Policy

As Africa nears the full implementation of the continent’s free trade area’s agreement, the Ministry of Industry, Trade and Investment recently organised Nigeria’s first trade dialogue to chat the way forward for the country, writes

For three days, trade experts, industrialists, bankers, bureaucrats, academicians and other relevant stakeholders gathered at the Nigerian Export Promotion Council’s headquarters in Abuja for the maiden edition of Nigeria Trade Dialogue. The trade dialogue was convened by the Federal Ministry of Industry, Trade and Investment (FMITI) with the theme “Trade as a catalyst for economic diversification.”

The aim of the dialogue, according to the communiqué that was issued on December 14, was to “identify common objectives, explore avenue for collaboration and collectively address the barriers that hinder prosperity in our trading environment in line with the Renewed Hope Agenda of Mr. President Bola Ahmed Tinubu.”

Participants at the trade dialogue included the Minister of Industry, Trade and Investment, Dr. Doris Uzoka-Anite; Permanent Secretary of the FMITI, Dr. Evelyn N. Ngige; representatives of World Bank, Bank of Industry, USAID, UNDP, National Association of Chambers of Commerce Industry, Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), Women in International Trade (WIT), National Association of Nigerian Traders (NANTS), as well as former Attorney General and Minister of Justice, and former Minister of Culture & Tourism and a former President Abuja Chamber of Commerce and Industry (ACCI) Mr. Adetokunbo Kayode, and House of Representatives Committee Chairman on Trade.

The tone of the dialogue was set by Uzoka-Anite in her keynote address. She said: “This trade dialogue serves as a platform for public and private sector stakeholders to come together, exchange ideas, and forge partnerships that promote economic growth and development.

“As we gather here today, we find ourselves at a crucial juncture in our nation’s economic trajectory. Trade has always been a catalyst for growth and development, as we navigate an increasingly interconnected global economy.

“It is therefore, an imperative that we engage in open and constructive dialogues to address challenges as we embark on a transformative journey towards a prosperous trade regime for our nation.

“It is hoped that, through dialogues, we can identify common objectives, explore avenues for collaboration, and collectively address the barriers that hinders prosperity in our trading environment.”

She also informed the participants that Nigeria is going through some economic challenges, and the present administration of President Bola Ahmed Tinubu is pursuing quite a number of policy initiatives, as part of his “Renewed Hope Agenda”, to re-position the nation.

The president’s agenda, according to her, placed significant importance on trade as a driver of the economy as it recognised that “by fostering an enabling environment for trade, we can attract foreign investments, boost exports, strengthen our position in the global marketplace and create jobs. This is based on our understanding that achieving substantial component of Mr. President’s Agenda requires a stable, transparent, and clear regulatory framework.”

Uzoka-Anite then harped on the urgency to enhance value addition in the country’s non-oil exports.

She said: “There is an urgent need for valueaddition on our non-oil exports to enhance Nigeria’s competitiveness in global trade, as well as, increase foreign exchange earnings for the benefit of our economy.”

The urgency was made clear by the report of the National Bureau of Statistics (NBS), which showed that non-oil products contributed a paltry 9.82 per cent of Nigeria’s total exports in the second quarter of 2023.

The minister also mentioned some key regulatory advancements achieved by the federal government within the trade sector. These achievements included the review and approval of Nigeria Trade Policy document for 2023 to 2027; Nigeria’s updated model for bilateral investment agreements, balancing investors’ rights and obligations while providing investment facilitation; the establishment of the National Quality Council (NQC) for effective implementation of the Nigeria National Quality Policy, aimed at ensuring that Nigeria’s products meet international standards; substantial investments in infrastructure, including rail, road, and aviation sectors as well as Nigeria’s recognition by the IMF in 2021 as one of the most improved countries in the ease of doing business in Sub-Saharan Africa.

Other achievements were the introduction and approval by Federal Executive Council (FEC) of the

Nigeria’s first Investment Policy document for 2023 to 2027 that promoted responsible, inclusive, balanced and sustainable investment in targeted sectors of the country’s economy.

“In the light of the foregoing, the significance of these measures and policies is to assure investors’ confidence and government’s commitment toward addressing challenges facing our businesses.

“It gives me pleasure to note that the theme of this trade dialogue is ‘Trade as a Catalyst for Economic Diversification. I, therefore, encourage you all to look beyond the challenges, and focus on the opportunities which Nigeria presents, and leverage on the trade sector to strengthen the ongoing collaboration amongst the critical stakeholders,” the minister said.

The Executive Director/CEO of Nigerian Export Promotion Council, Mrs. Nonye Ayeni, said that with the opportunities presented by the African Continental Free Trade Area (AfCFTA), there is an urgent need to have all stakeholders on board to discuss and proffer the way forward for Nigeria to ensure that our businessmen/ women particularly the SMEs would maximise the benefits of AfCFTA.

This, however, would not happen without policies that would enable Nigeria to use trade to appropriate the opportunities inherent in AfCFTA.

Ayeni said: “It is pertinent to note here that trade plays not just a key role in job creation and poverty alleviation but also through the enactment and implementation of good trade policies, it has the propensity to reduce inequality between countries, engender competitiveness as well as stimulate the increase in export of goods and services.

“This dialogue is, therefore, timely and underscores the urgency of embracing trade in various products to broaden the nation’s economic base.”

She pointed out that since the 1980s the Nigerian economy has been unevenly structured with earnings from crude oil accounting for about 70 percent of federal government’s revenues and contributing over 90 percent of our foreign exchange earnings. Currently, this dependence on oil exports has proven unsustainable and has made it clear that trade in different goods and services remained the linchpin to Nigeria’s economic diversification for a stable and prosperous nation.

“I am of the firm believe that this august occasion will provide the roadmap to actualise President Bola Ahmed Tinubu’s ‘Renewed Hope Agenda,’ and thereby position the country on the path of economic recovery, and consequently ensuing improved productivity as well as creating more opportunities for the people among others.

“At the NEPC, we are also committed to changing the narrative through the establishment of strategic export intervention programmes and projects targeted at increasing the basket of exportable products from Nigeria, providing market access for Made-in-Nigerian products as well as building the capacity of exporting companies in terms of export of quality products that meet the requisite standards in the global market.

“As today’s global economy is characterised by a high degree of unpredictability and disruptive changes, which calls for a continuous search for new ways of coping with the challenge, it is important to emphasise the need for all the stakeholders in the public and private sectors to demonstrate a common interest to boost trade, through effective collaboration and strategic engagements.

“We have to be deliberate and strategic in developing trade-led growth policies and agreements that are consistent with the dynamics in the global market and favourable to Nigerian businesses.

“This is critical because appropriate policies are pivotal to the full realization of the role of trade as a catalyst for economic diversification. Therefore, I believe that this forum will provide an excellent opportunity for synergies and a veritable platform to explore new ways to make our trade more robust to build a more resilient and diversified economy,” Ayeni said.

The Bank of Industry (BOI) was represented at the trade dialogue by Mr. Ameerah Gidado, of the SMEs Directorate of BOI. Gidado said that the BOI is dedicated to playing a pivotal role in empowering the participation of the country’s SMEs in international trade.

He said: “As we embark on the journey to elevate our country’s international trade status, the BOI pledges unwavering support to the SMEs, serving as a catalyst for economic growth and a beacon of hope for our citizens.

“Together we can build a resilient and prosperous nation firmly grounded in the principle of the ‘Renewed Hope Agenda.’”

However, the President of MAN, Mr. Francis Meshioye, stated that there is no better time to dialogue on the effective use of trade as a vehicle for driving economic development than now. This is particularly important for the members of MAN who are conscious of the fact that the whole essence of manufacturing is to sell their finished products to the final consumer and this process is central to trade.

Meshioye said: “These are indeed critical moments for industries in Nigeria as our operations are buffeted by many challenges and we shall be looking forward to working with you to overcome the binding constraints.

“This trade dialogue under the theme “Trade a Catalyst for Economic Diversification” is apt, giving that we are about to enter full implementation of the Africa Continental Free Trade Area (AfCFTA) agreement.

“It is intriguing to recall that Nigeria has been enrolled in the Guided Trade Initiative (GTI), which serves as a pilot scheme for the full implementation of AfCFTA. It promises to be a test case for all the processes of the implementation of the agreement and discussing how are trade potentials can be fully harnessed is truly commendable.

“Therefore, our discussions at this trade dialogue, should, amongst others, look into how Nigeria will be able to use this GTI in particular and the AfCFTA as a whole, to launch Nigerian made products into the continental trade area.

“This would require that we earnestly work on creating conducive environment for competitive manufacturing. Our economic diversification ambitions would be better served if we leverage on our comparative strengths and implement supportive economic measures that will create new opportunities for exports and upscale our current levels.

“For us in the manufacturing sector, we have always believed and strongly too, that once the right and conducive environment is created, we shall deploy more resources to growing and expanding our businesses.

“Let me assure the honourable minister that we are with you on this journey to industrialise our economy and bring prosperity to our nation.

“Let me also emphasis that trade is important and is complimentary to manufacturing. But much emphasis on trade without corresponding attention to manufacturing will be counter-productive. No nation can prosper with trading alone. It should be built on a strong productive/manufacturing sector.

“This dialogue on trade provides an opportunity to consider the issues of our competitiveness within the region, the continent and the global economic space.

“We should be able to harness inputs that will guide our policy making process and influence government action towards a manufacturing and trade narrative that supports our economic diversification aspirations.”

Participants observed in the communiqué that was issued at the end of the trade dialogue that the AfCTA provided the roadmap on how Africa would prosper in trade by eliminating tariff within the African continent. They also emphasised the need for Nigeria to leverage on this golden opportunity.

The communique noted that the AfCFTA’s Guided Trade Initiative (GTI) will improve supply chain efficiency as a veritable catalyst for economic diversification in Nigeria.

The participants, however, called for “strict compliance with the GTI can enhance small businesses by sourcing and outsourcing raw materials from other African countries, including trading in services.

According to them, Nigeria is behind in AfCFTA implementation and lateness is dangerous in any economic integration, therefore, there is need to speed-up the implementation process to maximize the advantage of the AfCFTA.

They reiterated that “Nigeria is never short of policy documents, but implementation is always the problem” and that “the lack of ECOWAS trade policy has hindered regional trade in Africa.”

For them, “it is not yet time for Nigeria to sign an EPA with the European Union (EU) rather the ministry should sequence our trade policy and establish some template negotiations in trade and investment.

“There is a failure of Nigeria to be faithful to Agreements made with the foreign investors;

“There is a lack of awareness on the availability of locally manufactured products.”