Nigeria: State of play on the AfCFTA sensitization and consultation exercise
As directed by President Muhammadu Buhari, the Nigerian Office for Trade Negotiations (NOTN) conducted a nationwide, sectoral and industry-wide consultation and sensitization exercise on the African Continental Free Trade Area from 15 March to 14 June 2018, to ensure that signing the Agreement would bring maximum benefits for the Nigerian economy.
Nigeria had made a last minute withdrawal from attending the Extraordinary Summit of African Union Heads of State and Government on 21 March 2018 in Kigali, Rwanda, where the draft consolidated AfCFTA Agreement was presented for signature, in order to allow more time for further consultations before committing to the pact.
Following the conclusion of the AfCFTA sensitization exercise, the Presidential Committee charged with the responsibility of widening consultations on the framework Agreement establishing the AfCFTA met in a closed session at its second meeting on Tuesday, 19 June 2018.
Ambassador Chiedu Osakwe, Chief Negotiator and Director-General of NOTN, was invited to report on the feedback from the stakeholders’ sensitization and consultation across Nigeria’s 6 geopolitical zones; and with industry, sector-specific groups, labour, think thanks and civil society; and to exchange views on the draft report that will be sent to the President.
Ambassador Osakwe officially launched the pdf Independent Study Report on The Potential Benefits of the African Continental Free Trade Area (AfCFTA) on Nigeria (4.34 MB) on 3 July 2018.
AfCFTA Sensitization and Consultation
The process of nation-wide sensitization was transparent and substantive. It set a standard for openness. Complex technical issues were explained, rigorously to both Government and Private Sector Stakeholders. It was a hugely beneficial exercise in the sustained efforts by Government to explain, consult and, in turn, improve understanding on trade-related competitiveness issues.
The adopted Communiqués, Factual Summary and autonomously submitted communiqués attest to the rigour and scope of the exercise. These outputs have been submitted to the Government and have been posted on the NOTN website (and available to download below).
A total of twenty-seven (27) groups were consulted in dedicated meetings, including the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA); Nigerian Association of Small and Medium Enterprises (NASME); Manufacturers Association of Nigeria (MAN); Federation of South-South Chambers of Commerce, Industry, Mines and Agriculture (FESPAN); Rice Processing Association of Nigeria (RIPAN); PAN; and the Nigerian Labour Congress (NLC). The sensitization exercise also included meetings within consultative forums in all the 6 geopolitical zones, involving 1,751 persons.
The results of consultations with Stakeholders in the 6 Nigerian Geopolitical Zones were reflected in 5 Communiqués and 1 Factual Summary, openly, and transparently adopted and available to the public.
In addition, the NOTN invited inputs from the entirety of the Nigerian public and private sector inputs to accompany the submission of autonomous inputs to the Government. The requests for inputs were called for through radio, TV, daily newspapers and social media. Eleven (11) private sector Stakeholders, autonomously, submitted signed inputs to the Federal Government of Nigeria.
In terms of the state of play on the substance of the AfCFTA, Nigeria is currently re-focused on its continued working relationships with relevant MDA’s and the Organised Private Sector (OPS), to coordinate a joint position for Nigeria on the AfCFTA.
The preparation of the draft list of tariff lines that would eventually be validated as a Draft Schedule for Tariff Concessions for Trade in Goods is an active process underway. The process was initiated with a communication to MAN, requesting for inputs, on 11th May. The request for inputs from MAN followed dedicated meetings with MAN on 15th March, 27th April and telephone contacts. Technical inputs were received from MAN, based on which the non-draft offer was forwarded to MAN on 11th May. A technical feedback is still being awaited from MAN.
Furthermore, on 6th June, the same non-draft offer was circulated to the OPS (NASME, NACCIMA, Lagos Chamber of Commerce and Industry (LCCI), and re-circulated, again to the MAN).
On 26th June, the Technical Working Group on Goods, chaired by NOTN, started the process of reviewing the Non-Draft Offer on Goods, with the participation of MAN. This process is envisaged to continue for the next 1 month to be finalized, following a final review with the Tariff Technical Committee (TTC), with competent jurisdiction for Nigerian Tariffs.
Concerning Rules of Origin, Annexed to the AfCFTA Protocol on Trade in Goods is the Annex on Rules of Origin, with general provisions on the RoO (specifically, wholly obtained, substantial transformation, proof of origin, verification of origin and processes not conferring origin). As agreed in the AfCFTA, product-specific RoO shall be a work in progress, over a 24-month period.
In addition to this, safeguard measures have been negotiated, and are reflected in the Annex on Trade Remedies to the Protocol on Trade in Goods (Annex 9). These Trade Remedies encompass Preferential Safeguard Measures; Anti-Dumping; and Subsidies and Countervailing Measures. This Annex shall come into force with the coming into force of the AfCFTA.
However, one of the deficiencies in Nigeria’s conduct and management of trade policy is the absence of a Trade Remedy Infrastructure. This is one of the mandates by the Federal Executive Council in the establishment of the NOTN. Currently, Nigeria’s capacity for the invocation and application of a trade remedy infrastructure is being developed. The calendar for establishment of the Trade Remedy Infrastructure is December 2018.
“As we build the partnership and expand the constituency for trade and investments as engines for growth in the Nigerian economy, the NOTN office welcomes and appreciates the inputs, technical and professional support received from the OPS and partner MDAs [Ministries, Departments and Agencies], through the course of this exercise.
Fact Sheet on the AfCFTA: Benefits for Africa and Nigeria
The AfCFTA is the first step in the implementation of AU Agenda 2063: the “Vision” for an integrated, prosperous and peaceful Africa.
The AfCFTA is a negotiated rules-based system, to establish the rule of law in trade, deepen, and expand intra-Africa trade from its very low base of 14%.
For Africa, the benefits are considerable. The AfCFTA would:
cover a market of 1.2 billion Africans with a combined GDP of US$2.5 trillion.
would increase intra-African trade by up to 52.3%.
enable all AU countries to share in the welfare gains, which are estimated at around 2.64% of continental GDP – roughly $65 billion in 2018 terms.
increase real wages for unskilled workers in the agricultural and nonagricultural sectors, as well as for skilled workers, with a small shift in employment expected from agricultural to non-agricultural sectors.
be accompanied by additional dynamic benefits, notably, export diversification, durable sustained growth, an enlarged regional market that better attracts FDI, with wider economic space for industrialization and catalytic effects for structural transformation.
expand the size of Africa’s economy to US$29 trillion by 2050, as estimated by the United Nations Economic Commission for Africa (see pdf AfCFTA Questions and Answers, March 2018 (354 KB) ).
For Nigeria, the gains are significant. The AfCFTA would:
expand market access for Nigeria’s exporters of goods and services, spur growth and boost job creation.
eliminate barriers against Nigeria’s products.
provide a Dispute Settlement Mechanism for stopping the hostile and discriminatory treatment directed against Nigerian natural and corporate business persons in other African countries.
establish rules-based trade governance in intra-African trade to invoke trade remedies, safeguard the Nigerian economy from dumping and unfair trade practices;
support the industrial policy of Nigeria through the negotiated and agreed “Exclusion and Sensitive category lists” to provide space for Nigeria’s infant industries.
improve competitiveness, the and the ease of doing business.
provide a platform for Nigeria’s continued leadership role in Africa.
consolidate and expand Nigeria’s position as the number 1 economy in Africa.
stimulate, specifically, an estimated 8.18 percent increase in Nigeria’s total exports, with a small structural shift in Nigeria’s economy towards manufacturing and services. This is expected to lead to a total increase in Nigerian economic welfare by 0.62% – equivalent to around US$2.9 billion in 2018 terms. Changes would result from tariff reduction, ease of doing business and, trade facilitation.
provide a platform for Small and Medium Enterprises (SMEs) integration into the regional economy and accelerate women’s empowerment.
provide an expanded platform for Nigerian manufacturers and service providers for connection to regional and continental value chains.