A close
friend of mine aka ‘Uncle Olayinka’ had asked me if I was going to write about
the African Continental Free Trade Agreement (AfCFTA), just at the time Nigeria
become one of the 22 member countries that ratified the agreement, bringing it
into life and making it effective in the African Continental Free Trade Area.
The agreement would function as an umbrella, to which protocols and annexes can
be added over time. It specifies trade protocols, dispute settlement
procedures, customs cooperation, trade facilitation and rules of origin. Former
President, Olusegun Obasanjo (OBJ), kept urging the Federal Government to sign
up the ratification, just as the South African President was also underscoring
the vital role that both Nigeria and South Africa needed to play, such that
AfCFTA succeeds. As much as our GDP and recovering economy is cast in a foggy
light, our nominal GDP represents 17% of Africa’s GDP, being the best in the continent, with SA coming in 2nd
with a GDP of 16%. PMB was millipede-speed cautious, as he insisted that he
needed to protect local manufacturers and entrepreneurs and would certainly not
rush into an agreement that was anti-competitive. The Nigeria Labor Congress
was also wary of a commit to the AfCFTA as it called it a “renewed extremely
dangerous and radioactive Neo liberal policy initiative” suggesting
increased economic pressure, would pressure workers into migration under
difficult and unsafe conditions. The Manufacturers Association of Nigeria,
representing 3000 indigenous manufacturers, stoutly stood against the agreement
and urged the Federal Government to back out. The FG continued to consult local
businesses in order to protect them and to ensure that the private sector buys
into it.
The AfCFTA
agreement is analogous to the European union model of business interactions
between sister nations, just as we have had existing ECOWAS protocols between
West African countries albeit the protocols suffer flagrant violations, of
which Nigeria is hit the most. So the repositioning of our agriculture with
monumental spending to encourage the local production of rice, sugar, milk,
textiles tomatoes, aluminium and silly toothpicks – will amount to nought and
continue to consume a lot of forex, while negatively impacting on our balance
of trade, if we are vulnerable at our land borders.
So my friend
Olayinka’s concerns were premised on the fact that all these other countries
that have better infrastructure to support local businesses and attract foreign
investors will have a comparative advantage over Nigeria, with our huge
infrastructural deficits. Investors would be willing to land their factories in
Ghana with better electricity supply, and export them to Nigeria, guarded by a
90% reduction in tariffs, as specified by the AfCFTA. Had PMB agreed to ratify
in 2018, tons of factories would have been near ready by now, rumbling to
exploit our massive 200 million man strong market.
PMB’s
Independence Day speech, encircling revenue generating agencies especially the
Nigeria Customs and the FIRS – emphasising their targets and likely sanctioning
if those targets aren’t met, was the defining mallet that consolidated earlier
announced policies and reforms. Such policies include the withdrawal of forex
for the importation of milk, and massive investments in livestock farming, and
the closure of all land borders, namely Seme and Niger.
Of immediate
impact was the border closure which stared down the bogus 60 million litres
daily consumption of petrol back to 50 million litres daily. In one fell swoop,
the pool of petroleum products smugglers and racketeers that have perennially
created artificial scarcity one too many times, over several years, were
neutralised. Suddenly Benin republic was experiencing scarcity of petrol and a
monumental hike of prices. The value of their CFA fell and their President has
been pleading with Nigeria to ‘open up’. Astronomically, there was a redundancy
of imported parboiled rice in Benin because Nigeria’s borders were shut down.
Dangote said that no country will survive with Cotonou as its neighbour.
Hameed Ali,
the CG Customs said that the agency was recording 5 billion Naira daily and
that in a single day last month, a record 9.5 billion Naira accrued to the
customs, which had never happened before, in Nigeria’s history. Benin’s port
was thriving and their economy booming from trade, while our own economy was
flailing inspite of our natural endowments. The only solution to this Seme
border boom to the detriment of our own economy was a total shutdown. And you
know when PMB says total shutdown, it is total when you have one teeny tiny
glance at Hameed Ali.
Leakages in
government revenue have become drainages. Gold worth 9 billion dollars leakes
from mining in the North west, and another 1 billion dollars worth of logging
revenue leaks out from the North east. 1 billion dollars worth of bitumen and
other minerals drains out from the South west and South east, and then ofcourse
a huge fortune of around 3 billion dollars worth of oil is drained away by
bunkering in the South south. That is collectively a staggering 15 billion
dollars of government revenue lost from these few resources.
The
Daily-trust fact-checked Omo Ali Ovie’s tweet to ascertain that yes – our
export value was 8.53 trillion Naira in 2016, while import was 8.82 trillion.
In 2017, exports rose to 13.6 trillion and imports stood at 9.56 trillion.
Exports further hit 18.53 trillion in 2018 and imports stood at 13.17 trillion.
Nigeria’s trade balance, being export minus imports, grew from 290 billion in
2016, to 4.04 trillion in 2017. In 2018, it further rose to 5.36 trillion. You
need not be as dexterous or renowned as Bismarck Rewane to crunch these figures
to see that we growing. The pace or growth rate can be faster if there is a
deluge of efforts to ensure that trade protocols with neighbouring countries
are religiously adhered to, and then eventually, policies like the AfCTFA
agreements fine-tuned in such a way that Nigeria does not get victimised while
playing big – big brother.
Calabar port
is now functional and a new one will be built in Bayelsa. Dredging of the River
Niger to enhance the functionality of Baro town and River port is being done,
and all these would readily escalate the de-congestion of the Tincan and Apapa
ports. The land borders, porous as they are, could be eliminated as they seem
to facilitate terrorism and banditry. China closed down borders for 30 years or
so, and Malaysia too right? All hail Trump is building border walls, wrought
from iron. We cannot remain an ‘Ashewo’ style bordered country and cry foul
over unending terrorism. The speed of infrastructural development all over the
country in the forms of railways, roads, and bridges are very key. Then the
behemoth power reforms and the local refining capacity. With these, we will be
nearing an Eldorado. Right now, PMB’s government’s thrust should be like the
activity of a Chef, cooking up a buffet, so that by 60 (Nigeria @ 60), we can
begin to return to the glamorous celebrations of October 1st.
Tahir is
Talban Bauchi