AfCFTA: Strong Policies and Regulations Needed for Nigeria to Benefit – Stakeholders


One of the main objectives of the African Continental Free Trade Area (AfCFTA) is to increase the continent’s intra-continental trade by 52.3% by 2022. This provides an opportunity for small and medium-sized enterprises (SMEs). ) to prosper by taking advantage of Africa’s huge market. . But economic and financial experts at a recent stakeholder meeting convened in Lagos by the Civil Society Legislative Advocacy Center (CISLAC) and OXFAM Nigeria in collaboration with the Chartered Institute of Taxation of Nigeria (CITN), argued that for that the country actually benefits from AfCZF, the government needs to improve its game. Reports by Sulaimon Olanrewaju.

The objective of the African Continental Free Trade Area (AfCFTA) is the elimination of tariff and non-tariff barriers between member countries through the provision of a single market for goods and services with a view to deepening the economic integration of the continent as well as the prosperity of its people. If the advantages inherent in the project are indisputable, what is also indisputable is that the advantages that can be obtained by a country depend on its level of preparedness for the intervention.

The ZLECAf machine room is made up of micro, small and medium enterprises (MSMEs) as they are responsible for the production of most of the goods transported across the continent. Due to their ubiquity, MSMEs are important contributors to value creation, job creation and trade expansion.

According to the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), SMEs in Nigeria account for around 96 percent of registered Nigerian businesses, employing a sizable number of the workforce. national work and contribute enormously to the gross domestic product (GDP) of the country.

Many people are of the opinion that given the huge size of MSMEs in the country, the creativity and versatility of Nigerians coupled with the huge population of the country, Nigeria is in a position to reap huge benefits from its membership in the AfCFTA. However, others fear that many Nigerian companies may not be able to take advantage of the deal or cope with the influx of new competitors from other countries into the free trade area due to ‘Internal inefficiencies within companies and suboptimal business environments.

To reflect on how to address the likely challenges that could prevent Nigerian businesses from reaping the accumulated benefits of the country’s adherence to the continent’s conversion to a free trade area, the Civil Society Legislative Advocacy Center (CISLAC), OXFAM Nigeria and the Chartered Institute of Taxation Nigeria (CITN) recently hosted a stakeholder forum in Lagos on “Maximizing the Benefits of the African Continental Free Trade Agreement” to sensitize Nigerian government and business on the way to position the country and its businesses to take advantage of the AfCFTA.

The forum brought together experts from civil society organizations (CSOs), the academic community, business organizations and the media.

During the opening speech, Auwal Musa Rafsanjani, Executive Director of CISLAC, said the impact of the AfCFTA cannot be determined by government policies alone, but also by the extent to which the private sector takes advantage of many opportunities available in the free trade area.

In this regard, he said the government needs to engage in ongoing outreach to ensure people understand the AfCFTA message and see the benefits that come from it.

His words: “In Africa, despite awareness-raising and consultation campaigns in all geopolitical areas, there seems to be an apparent lack of mass information on AfCFTA with only 30 groups and 2,317 neutral people sensitized and sensitized. consulted on the AfCFTA.

Rafsanjani added that it is not enough for a country to scroll through many SMEs, noting that without the right strategy, a country with a large number of SMEs can still lose advantages.

According to him, “Without an active strategy to ensure that SMEs are aware of AfCFTA and are able to benefit from the agreement, the positive impact of AfCFTA on the Nigerian economy will remain minimal.

Also speaking, the President of the Chartered Institute of Taxation of Nigeria (CITN), Adesina Adedayo, noted that the AfCFTA has the potential to greatly contribute to the movement of capital and natural persons, and to facilitate cross-border investments by laying the groundwork for the creation of a continental customs union at a later stage.

Addayo said: “The AfCFTA was created mainly with the aim of deepening African economic integration through a single market for goods and services and to promote industrial development through the diversification and development of the regional value chain. .

“The benefits of this deal are pretty huge. It has the potential to greatly contribute to the movement of capital and natural persons, facilitating cross-border investments by laying the groundwork for the establishment of a continental customs union at a later stage.

“MSMEs remain essential components of the Nigerian economy as they represent 96 percent of Nigerian businesses and contribute 75 percent to national employment. MSMEs will benefit from the access to new markets and the economic transformation that competition promotes.

The CITN president added, however, that despite the clear advantages of the AfCFTA, it is not without threats. He said the threats posed by AfCFTA could be easily addressed if the government instituted measures to protect vulnerable industries.

He added that the measures that should be introduced include improving transport infrastructure and implementing policies that would see lower production costs with great consideration and easier access to credit facilities by MSMEs, stressing that these measures “would in turn make goods exports competitive and promote rapid growth of industrialization which, in turn, stimulates the economy of our country.

In his opening speech on the benefits of AfCFTA for SMEs and Nigeria, Professor Ishola Akintoye, former financial consultant to the World Bank and tax commissioner to the Tax Appeal Tribunal, called on the government to take the seriously the implementation of the AfCFTA to avoid missing the advantages offered by the continental platform.

Akintoye, who is a professor at Babcock University, added that if the country lingered as long as it did before enrolling in AfCFTA, it would be disastrous if it ended up losing the benefits. .

Prof Akintoye added, “AfCFTA is simply an idea to have a single plan for all African countries to come together under one African integration development authority that will grow all member countries together.

Speaking on the advantages, which he noted outweighed the disadvantages, he said the AfCFTA would allow African companies to enter new markets, facilitate economic growth, encourage foreign direct investment, reduce the cost of inputs, increase efficiency and sales, minimize threats and improve performance. competitive advantages under the AfCFTA.

He added, however, that the government should conduct an impact assessment to determine the likely effects of AfCFTA implementation on public revenue, identify necessary changes to existing laws and regulations, including local content rules, and areas of competitive and comparative advantage.

He called on the government to strengthen institutional capacities to lead the implementation of the AfCFTA and to identify the main stakeholders and agencies with key responsibilities, expected results and performance indicators.

According to him, the government should systematically improve the capacity of the Nigerian customs service to secure and enforce Nigerian borders in order to prevent dumping, transshipment, smuggling and other harmful cross-border activities.

He added that, as a matter of urgency, the government must tackle regulatory and policy obstacles and promote small industries in local machine tool manufacturing, fishing and crop production, animal husbandry, forestry, audiovisual and financial services through the extension of targeted risk capital and capacity building within the framework of the AfCFTA.

“FIRS and JTB should take advantage of technology and the new TIN system to improve the quality and integrity of taxpayer data, improve tax information collection and initiate reforms to ensure proper taxation of individuals and businesses. non-residents with sufficient ties to Nigeria.

“Ensure policy coordination and alignment between monetary, trade and fiscal policies. “Most importantly, to conduct regular, in-depth and solid scientific studies on different aspects of the AfCFTA as it affects Nigeria both in terms of potential benefits and likely losses to inform policy decisions on withdrawal, review and future changes to the AfCFTA treaty. “

Speaking in a similar vein, a former director general of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, noted that countries with high productivity and competitiveness will benefit more from the AfCFTA.

According to him, “the benefits and costs would vary from country to country. Countries with a quality investment environment would emerge as key destinations for investment; countries with weak investment environments will be market destinations. “

Yusuf, however, noted that the challenges of AfCFTA include multiplicity of members, slow ratification of protocols and reluctant implementation of agreed plans, lack of complementarities of African economies, diverging socio-economic policies. , inadequate infrastructure, limited national and regional capacities and lack of full private sector participation in the planning and implementation stages.

At the end of the deliberations, panellists argued that there was a need to sensitize Nigerians, especially those in micro, small and medium-sized enterprises, on their respective duties and rights under the agreement, as well as on how they can take advantage of the opportunities generated by the AfCFTA for the benefit of the country as well as their businesses.

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