AfCFTA: MAN Highlights Implementation Costs to Manufacturers

Chris Uba

The Manufacturers Association of Nigeria (MAN) has restated its position on African Continental Free Trade Area (AfCFTA), saying that the association is not against the continental free trade as its leadership believes that Nigeria being one of the largest economies in Africa, has the clout to dominate trade in an African Continental Free Trade Area.

MAN said in a statement yesterday titled “Factshit on African Continental Free Trade Area,” that the association was faced with the serious concerns that the private sector that would carry out the physical trading was not consulted in the process just as no study was carried out that would inform the country’s approach to AfCFTA.

It was also concerned that the 90.10 per cent Market Access ratio to be achieved within five years for Nigeria was not properly consulted even as non-articulation of National Negotiation Mandate was not made.

“There are no definite safety nets, specific trade remedies and well thought out dispute resolution mechanisms just as Annexures for tariff on trade-in-goods were absent,” said, adding that “it is worth mentioning that Government has done justice to most has done justice to most of the items above following well-articulated actions taken since March 21, 2018 when the AfCFTA Framework Agreement was first signed by some countries in Kigali, Rwanda.”

However, according to the association, it is important to recognise the adjustment costs that will arise during AfCFTA implementation and design appropriate framework to mitigate them and in order to provide business advisory services to manufacturers on the implication of AfCFTA on the sector.

To this effect, MAN commissioned the study conducted by Centre for Trade & Development Initiatives, University of Ibadan.

According to the association, “the study critically analysed the likely impact of the AfCFTA on Nigeria manufacturing sector and established that imports into Nigeria will substantially increase as a result of AfCFTA and this will certainly affect domestic production, employment and investment negatively.

The continental trade agreement as it is, MAN said, will not only erode the gains of industrialisation, but will also create greater economic and social problems for Nigeria.

“There is therefore the need for government to be cautious if Nigeria is to append her signature to the Agreement. Of course, the basis for categorising Nigeria as non LDC in the Framework should be properly considered as any indicator other than manufacturing value-added will be misleading since the country’s manufacturing is still developing.

There is the need to call for the revision of the 90.10 per cent market access offer and also push for a transitional or phased liberalisation of 20 years of five years each.

The first five year should be a period for government of countries in Africa to address the concerns of its private sector and make necessary adjustments that will position their countries to benefit from AfCFTA while in the second five years, tariff lines that are currently 0-5 per cent will be liberalised. Those within 10-20 per cent would be liberalized in the third five years and tariff lines from 35 per cent and above would be excluded,” MAN declared.