Nigeria’s Vice President Yemi Osinbajo has called on African countries to use the Africa Continental Free Trade Area agreement as a bargaining chip when dealing with the rest of the world.
According to Osinbajo, this is one of the ways the continent can maximise the benefits of the AfCFTA pact, rather than engage in deals separately endorsed by regional economic blocs.
Osinbajo made the assertion while delivering a keynote address at the 61st annual conference of the Nigerian Economic Society on themed ‘African Continental Free Trade Area in Post-COVID-19 Era: What Next for Nigeria?’
He said, “One important objective of the AfCFTA is to overcome the economic fragmentation of the continent by bringing the regional economic blocs together in a common arrangement. This being the case, African countries should look to negotiating trade treaties with other parts of the world on the basis of AfCFTA, rather than through arbitrarily designed regional blocs. They should not allow themselves to be lured into arrangements which do not serve their long-term development objectives.”
The number two citizen of the ‘Giant of Africa’ explained that the agreement could bolster trade and development on the continent.
“We must, of course, continue to bear in mind, especially here in Nigeria, that AfCFTA is not a magic wand that automatically brings about growth and prosperity.
“The reality is that if care is not taken, trade liberalisation can expose the Nigerian economy to unfair competition and sharp trade practices, with adverse consequences for our producers who might have to close down their businesses, and for our workers who would then lose their jobs.
“Successful implementation of AfCFTA requires financing to address various implementation challenges and to promote arrangements in support of integration. For instance, in addition to making up for potential losses of tariff revenues, African countries will face implementation costs, including undertaking reforms, establishing new trade-related bodies, improving and upgrading existing facilities,” he added.
According to him, finding the resources to undertake these activities at a time like this when we lack fiscal space will, of course, prove to be very difficult for Nigeria and other African countries.
“Our economists should accordingly help to come up with innovative financing solutions for our economies,” the vice president said.
On AfCFTA being a guide for decisions on national economic blueprints, he said, “Apart from reducing the spread of COVID-19 and mitigating its effect on the domestic economy, Nigeria must have an interest in promoting an AfCFTA that catalyses regional value-chains, enables free movement of people, attracts investments and improves the continental payments system.
“As we seek to use the opportunities, we should remain alert to the need to create conditions that will enable our businesses to be able to compete and thrive within the AfCFTA. We can no longer plan without fully considering AfCFTA; all planning and budgeting documents must take it into account. This explains why the current successor plan to the Economic Recovery and Growth Plan has AFCFTA as an important reference.”
