The African Continental Free Trade Agreement came into force on the 3rd of May 2019. Two years after the ratification and a year after the implementation of the African Continental Free Trade Agreement, Nigeria still lags in making the trade Agreement operational owing to structural infrastructure, covid-19 pandemic, and lack of cohesive strategy among stakeholders and trade protocols.
At a recently concluded AfCFTA Sub-national Strategy Workshop held in November 2021, it was noted that Nigeria is best positioned to take advantage of the agreement from a wealth creation, market access, and job creation perspective. However, when it has to do with the production of raw materials, Nigeria needs to go through a lot of processes that infrastructure-wise it is not fully equipped to execute. However, Nigeria can take advantage of skilled labor in Information Communication Technology (ICT) and Entertainment where there are no such restrictions as there are within the production/manufacturing sector. Nigeria could also add value to its products for export by exploring areas in the value chain process in accordance with the AFCFTA Rules of Origin provisions.
At this point in time, below are some of the challenges Nigeria should work on to make the AFCFTA economically beneficial for its citizens.
Agriculture is a booster in the development of any economy, and Nigeria is one country that is rich in agriculture. It grows a lot of crops but is being restricted by a lot of factors, ranging from transportation within and outside the country, to storage of these goods when it gets to harvest, down to the planting of these crops. A lot of chemicals are being used which make it unhealthy for consumption and this reduces Nigeria’s export potential. A lot of international standards are not being put into consideration during production and this reduces Nigeria’s chances of exports.
For an economy to develop there must be some regulatory bodies in place to help checkmate the activities of the citizens. We have a lot of Agencies in charge of several things in Nigeria. AFCFTA, promises growth but at the same time the growth can also be threatening to a country’s economy when illegal goods are being imported or expired goods are being imported at a cheaper rate and sold to the citizens, this does not only have an effect on those that aid these acts but the economy itself. For instance, if chemicals that are not healthy for consumption are being smuggled into the country to aid agriculture, the effect will be seen on a million persons and not just those that brought it in. so Nigeria will need to equip Regulatory bodies and make it mandatory that goods that produced both locally and exported, and goods imported must meet all the necessary requirements before being imported or exported.
Small and Medium Scale Enterprise
This is one part of the economy that tends to benefit from AFCFTA. Many entrepreneurs are yet to understand and fully appreciate the AFCFTA and its benefits to them. A lot of awareness needs to be drawn to the AFCFTA and the opportunities for small-scale businesses to benefit from.
The state of security in a country is another factor to consider when trade is involved. People tend to invest and trade with a state that is safe security-wise. It is sad to say Nigeria is not there yet and this has in so many ways affected the growth of the economy. So, while great business opportunities to be tapped under the AFCFTA, Nigerians will most likely not feel the impact of AFCFTA due to poor security.
In conclusion, the impact of AFCFTA in Nigeria has not really been felt due to the above challenges and many more. But Nigeria has a lot to benefit from the Agreement, ranging from the manufacturing sector to the entertainment sector, the services sector, opportunities for exportation of raw materials as well as SMEs. However, a lot of work needs to be put in place for this to happen. The Regulatory bodies within each economic sector and industry need to work with relevant stakeholders to ensure that specifications as regards quality, standards, processes, and other measures including security concerns are addressed.