Though the realisation of the African Continental Free Trade Agreement (AfCFTA) has been temporarily adjourned till 1 January, 2021, owing to disruptions caused by the pandemic, stakeholders are of the view that the trade pact could help the continent recover fast from the impact of COVID -19 on the economy if implemented as scheduled.
Some players argue that its implementation now may be detrimental to the economy, as it might expose countries to the pandemic; saying that in as much as there was need for Africa to diversify its sources of supply chain, implementing the agreement now might be highly risky.
Secretary General of AfCFTA, Wamkele Mene, had said it was obviously not possible to commence trade as intended on 1 July under the current circumstance. He added that the AfCFTA would not face further delay after January 1, even if there is going to be a rebound of COVID-19 cases in Africa, “if the pandemic continues into 2021, the continent will develop the necessary public health protocols to push on with the implementation of the trade.”
The COVID-19 has placed severe strain on economies across the continent, and regional coordination can be an effective tool to promote post-pandemic recovery.
Analysts maintain that developing regional unification, can serve as an alternative stimulus package for job creation, foreign exchange, industrial development and economic growth, insisting that if the agreement had been implemented earlier, economies would have been more diversified, stronger, and less affected by the pandemic.
A report said the agreement has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures. It offers the opportunity to strengthen and re-configure intra-African supply chains, enhance resilience, improve infrastructure and health systems while reducing reliance on non-African trading partners.
Boosting regional linkages would help to attract investment, develop infrastructure, and create economies of scale, ultimately benefiting the post-pandemic recovery, while precautionary measures are strictly adhered to.
The agreement, seen as a potential game changer, will better position the African economy in the face of future adverse shocks, since the virus has plunged economies into recession; that means the AfCFTA is now needed more than ever to ensure that member states are trading with each other and supporting one another at this time.
Mene said he was glad to hear that Nigeria is ready to deposit the instrument of ratification of the AfCFTA, while assuring that he is looking forward to Nigeria’s leadership in AfCFTA.
He stated that for a long time, the African continent had focused on security and political issues, and was glad that focus is now being shifted towards trade and investment-related matters.
“AfCFTA has improved on the WTO requirements on trade facilitation, and we would ensure that countries meet up with their obligations to ensure smooth trade.”
For greater volume of business to be experienced as expected, Nigeria is constantly being lobbied for the continental trade due to its potential, such as large population and others.
According to the Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Ayoola Olukanmi , one of the reasons the AfCFTA secretary general visited Nigeria is because of the country’s importance in the continental trade. “This multiple visit is a reflection of the importance of Nigeria as far as the trade treaty is concerned. Some Nigerian companies like BUA and some others have said they were ready for the trade. Also, there are some Nigerian financial institutions that are in other African countries, and I know that some are in over 22 countries in Africa. So, the AfCFTA is being implemented by some Nigerian companies. So the extensive visit of Mene is an indication of the importance of Nigeria to the AfCFTA. He also met with the Minister of Industry, Trade and Investment and also with the speaker of the House of Representatives who are the key players in decision making as it will affect the AfCFTA. They are the key stakeholders as far as the AfCFTA is concerned.
“This is why we are fast-tracking the ratification process because whether we ratify or not, players are already out there, and operating. So this will give Nigerian companies access to the continental market. As far as NACCIMA is concerned, the earlier we participate, the better for the country.”
The reality is that Nigeria is the biggest and largest economy, which means that it comes with some obligations.
Secretary, National Action Committee on AFCFTA and Senior Special Adviser to the President on Public Sector Matters, Francis Anatogu, had said the continental trade provides preferential access to Africa market worth over $650billion in mostly manufactured goods and services, which aligns with the nation’s twin national objectives of industrialisation and export base diversification.