Last week Forty-four (44) African countries signed on to the controversial African Continental Free Trade Area (AfCFTA). Nigeria, the continent’s biggest economy under the legitimate pressures of stakeholders notable Nigeria Labour Congress (NLC) and MAN (Manufacturers Association of Nigeria) commendably pulled out on Tuesday, 21st of March.
AfCFTA is the Africa’s version of European Union’s Treaty of Rome (signed by member-countries some 60 years ago!). Paradoxically the Europeans had plagiarized the vision of the late Kwame Nkrumah of Ghana who in his historic speech at the founding of OAU (AU) in 1963 had envisioned a common African market and indeed a United States of Africa! African trade agreement came into being at the 10th Ordinary Session of African Union Heads of State summit held in Rwandan capital, Kigali on Wednesday 22nd.
President Muhammadu Buhari said (and I agreed) that while “Nigeria fully recognizes & appreciates the efforts of the African Union Commission so far, regarding the implementation of a sustainable Continental Free Trade Agreement(CFTA) for Africa”. It is nonetheless, “widening and deepening domestic consultations on the CFTA, to ensure that all concerns are respectfully addressed. African Free trade agreement must Fairly and Equitably represent the interest of Nigeria, and indeed, her African brothers and sisters,” Buhari added.
The continental trade deal is a fallout of the Agenda 2063 of the A.U founded on the principles of national ownership and mass consultations with all African stakeholders. Given the last minute cancellation of Nigeria’s delegation to Kigali, Minister of Industry, Trade and Investment, Okechukwu Enelamah owes all Nigerian stakeholders the explanations while a continental trade deal with impact on investment, jobs, Labour and human rights was rushed through the Federal Executive Council (FEC) without the mandatory consultations with relevant stakeholders.
All African leaders must show the proof that AfCFTA is not another top-down deal signed behind the legitimate aspirations of African peoples for a common wealth, not just common market. AfCFTA enthusiasts say it is the world’s largest free trade area “since the World Trade Organization which was formed in 1995!” And that is the first problem!
The uncritical membership of World Trade Organization (WTO) of most African countries including Nigeria in the 1990s with attendant massive lowering of tariffs through wholesale trade liberalization arrested the nascent African manufacturing and development leading to massive collapse of labour intensive industries like textile and automobile due to unfair competition.
How would AfCFTA foster African re-industrialization process and uplift millions out of income poverty is a critical question begging for answer. There is no doubt that Africa needs intra-trade rather than external Aid and loans and unfavorable trade with Europe, America and China. Trade between African countries is miserably relatively low. It accounts for only 10% of all commerce on the continent – compared with 25% in south-east Asia.
With One African Market, undoubtedly, the agreement brings together 1.2 billion people (almost population of India or China) with a combined gross domestic product (GDP) of more than $2 trillion! The host and current African Union (A.U.) president, Paul Kagame said: “This agreement is about trade in goods and services”. But only producing nations trade in goods.
The painful truth is that by and large, this is not a producing Africa, the likes of Nkrumah envisioned. On the contrary, Africa is a dumping ground for imports of all types and exporters of raw materials in the tradition of the colonial economy. Only South Africa with 25 per cent manufacturing value added qualifies as a trading nation. Nigeria’s 20 percent manufacturing value added (MVA) of the 80s has sharply fallen to less than 5 percent.
While intra-African Trade can bring economic benefits to member states, there should be broad consultation and participation to avoid the pit-falls of past trade agreements. Trade, (sorry fair trade!) is the means to development, not the end itself. Therefore any genuine trade pact must necessarily foster growth, create mass decent jobs and development.
For Nigeria to further reduce import duties to 90 percent, as envisaged by ACFTA will fuel cheaper imports smuggled goods that would overrun domestic markets of local products. Domestic high production costs have undermined competitiveness, perpetuating in turn deindustrialisation, unemployment and income poverty. What are the implications of the ACFTA, for existing ECOWAS treaty, and its notorious Common External tariff (CET) and the contentious new-colonial Economic Partnership for Africa (EPA)? President Buhari must initiate a trade summit and its impact on job creations. Whatever the outcomes of such deliberation, ACFTA should allow Nigeria the domestic policy space such that the current policy objectives of job creation and industrialization as contained in the Economic Recovery and Growth Plan (EPRG) and Nigeria Industrial Revolution Plan (NIRP) are not jeopardized.
Twice beaten by WTO and bilateral trade deals of dubious values, Africa must be endlessly shy of new trade deals. With Donald Trump’s America damning globalization and Europe, China and America in trade wars, AU must do quality and quantity control of ACFTA’s clauses. Most African countries are neo-colonial dumping grounds. With Brexit and Britain’s desperation for market outlets, ACFTA must show that it is not another route to European products labeled “made in Africa”. Common market must also go with common labour and human standards. EU, which ACFTA belatedly apes, operates on respect for labour and human rights. Paul Kagame emphasizes trade in goods and services. What about the workers that produce the goods. Are they humans with minimum pay and trade unions or slaves without voices? What about the movement of Africans and their rules of engagements? ACFTA should incorporate the ILO standards and African human rights charter.
Federal Government must be weary of trade pacts which are domestic industry-decent job blind. With 50 per cent open unemployment in Nigeria, development and growth should take precedence before controversial trade deals. Economic development of Africa is work in progress not just an event of a televised ratification of trade deals.