Nigerians have started reacting to the signing of the African Continental Free Trade Area (AfCFTA) by President Muhammadu Buhari on Sunday.
President Muhammadu Buhari signed the agreement on behalf of the country at the on-going AU Summit in Niamey, making her the 53rd country to do so.
Pres. @MBuhari signs, on behalf of Nigeria, the Agreement Establishing the African Continental Free Trade Area (#AfCFTA), at the opening of the 12th Extraordinary Session of the Assembly of African Union Heads of State and Govt, in Niamey, Niger Republic, July 7, 2019 #AUSummit pic.twitter.com/Y9miko2GBP
— Presidency Nigeria (@NGRPresident) July 7, 2019
Tope Samuel, a Lagos-based Business consultant, said by signing this agreement, President Muhammadu Buhari was creating an avenue for Nigerian manufacturers to invest in the world’s largest trading area.
“For me, it will be by way of creating locally manufactured products to other African territories as well as services and Labour, especially with regards to free movements.
“This also means we need to ensure adequate supply of power to help manufacturing, excellent service and ethical practices as an export of services and human capital (Labour) to other African countries.”
Samuel said this was the biggest opportunity for Nigeria to “play a leading role in Africa’s manufacturing and services sub-sectors, which would lead to massive job creation and guarantee at least 30% employment for young Nigerians.”
He also noted that intra-African trade would receive a major boost.
“If the purpose is to boost intra-African trade by 52% by 2022, a borderless Africa is an essential need, which should eliminate all forms of hindrances like lack of awareness amongst other Africans on free trade agreements and movements, language barriers, and xenophobia, to mention a few,” he added.
Omo Eirewele, a public affairs analyst based in Benin-City, said Nigeria must strengthen its fiscal policy framework to ensure it has comparative advantage in various aspects of Africa’s economy:
“We could actually refine our crude locally and have an export comparative advantage at least to our neighbours; a lot would fall in place if our security challenges are sorted out.
“Secondly the sincerity and commitment in government and enabling fiscal monetary policies would go a long way.
“Nigeria must look inward for rapid infrastructural development to have a comparative advantage, if not we would just be a dumping ground for finished products.”
Tunde Foresythe, said the new agreement means the Federal government must expedite action in expanding infrastructure – particularly the power sector.
“Government’s investment in the power sector is now most critical because with Nigeria now part of the Africa free trade zone, some businesses might prefer relocating to other African climes with a better power infrastructure.
“This would turn Nigeria into a destination for commodity exports. Automatically, this creates more unemployed Nigerians,” he said.
The World Trade Organization (WTO) says the AfCTA deal has the potential to economically transform African economies by creating a market of over 1 billion people.
To make the free trade agreement a success, Afreximbank will create an online payment platform which will result in $5 billion dollars savings in transaction costs and will disburse $25 Billion to support the free zone.