As the countdown begins to the formal inauguration of the African Continental Free Trade Area (AFCFTA) agreement on July 7 and 8, the Chief Executive Officer, Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane, has said that the treaty could undermine implementation of the Economic Community of West African States’ (ECOWAS) Common External Tariff (CET) policy.
In line with a global movement toward customs unions, ECOWAS had, at a Heads of State Summit in October 2013, adopted the CET, which is aimed at ensuring that same customs duties will apply to all goods entering ECOWAS member States, regardless of which country within the area they are entering.
ECOWAS Director of Trade, Gbenga Obideyi, said in September 2016, that 10 member states, including Nigeria, had as at then implemented the CET, which came into effect earlier that year. He also disclosed that member states were expected to implement the common tariff within five years.
However, with AFCFTA legally taking effect on May 30th, Rewane, in a presentation obtained by New Telegraph last weekend, stated that while the agreement would significantly boost intra-African trade in addition to bringing other benefits for the continent, it: “Could undermine the setting of CET in ECOWAS.”
The respected economist further noted that subdued growth in Africa’s two largest economies-Nigeria and South Africa- could negatively impact regional and continental trade flows.
According to him, although the agreement could result in Africa having a combined consumer and business spending of $6.7trillion by 2030, “protectionist policies will hinder total elimination of tariffs.”
In addition, he pointed out that more diversified economies with better infrastructure have greater opportunities of benefiting from the pact.
It will be recalled that Nigeria is among three countries that are yet to sign the agreement agreed upon by the 55-member state African Union (AU).
The Manufacturers Association of Nigeria (MAN) is among several powerful groups in the country opposed to the country signing AFCFTA. They argue that it will lead to the dumping of cheaper imports in Nigeria, thereby leading to shut businesses and job losses.
However, last Thursday, former President, Olusegun Obasanjo, reiterated his call that the Federal Government should sign the agreement.
He said: “ I believe we have enjoyed the time of delay but of course we have no choice than to sign it. I do hope that sincerely before the formal inauguration in Niamey on July 7 and 8, that Nigeria will not be absent at the launching because I see no reason why Nigeria can be present when it has not signed the agreement.
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