Charles Nwaoguji, [email protected]
Although Nigeria has finally signed Africa Continental Free Trade Area (AfCFTA), the question currently bugging the minds of some stakeholders today remains “after signing AfCFTA what next”?
The Federal Government has initiated steps to address smuggling and two major efforts stand out.
First, the legal framework is fairly well developed in Nigeria. Second, the government has taken steps to protect consumers’ health and safety from dangerous counterfeits through significant education efforts.
Despite these actions, a recent study shows that the rate of smuggling in the country remains quite high.
For example, across seven industrial sectors, smuggled goods sales caused average sales losses to rights holders of 21.7 percent in 2012.
There are multiple reasons why smuggling continues to increase in Nigeria including conflicting government priorities, lack of adequate resources to deal with a multitude of critical issues, a lack of political will to deal with the problem and even a sense among some that smuggling is a “victimless crime.”
Stakeholders who spoke with Daily Sun, recently, said the local manufacturing industries have been finding it hard to dominate the local market for quite some time mainly due to price differentials between locally manufactured goods and imported goods including smuggled products.
Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said it is anticipated that there would be an increase in smuggling through the Seme route, which means a loss to the national revenue. If supply of smuggled goods increases in the local market, it would be impossible for local manufacturers to maintain their market share, resulting in heavy losses to local industrialists. Moreover, this would result in heavy losses to the government due to loss of import duties and taxes, which otherwise would have been collected at the import of entry.
To address this issue, Mr. Yusuf says “Nigerian authorities have to design a mechanism to prevent smuggling and to ensure the safety of their borders. Nigeria has to agree to build a mechanism to exchange intelligence between their anti-smuggling bureaux, to strengthen customs controls at the border and to exchange information to curb illicit smuggling across the border.”
Power sector challenges
For the National President of Nigerian Chambers of Commerce, Industry, Mines and Agriculture ( NACCIMA), Hajiya Saratu Iya Aliyu, there is urgent need for government to find permanent solution to the challenges affecting the power sector in Nigeria, and this should cut across the entire value chain. Some of the challenges includes but not limited to funding, metering constraint, tariff issues, debt issues, competence and capacity challenges, transmission, gas limitations among others. We are of the view that the Distribution Companies do not seem to have the financial and technical capacity required for efficiency in distribution network, and are not making tangible investments. We recommend that the Power sector be overhauled for efficiency and effectiveness.
Increasing wave of insecurity
The increasing wave of insecurity in the country especially as it concerns kidnapping, herdsmen attacks on communities, ethnic and religious clashes and many more cannot sustain adequate exploitation of the AfCFTA protocol .It is particularly worrisome that these criminal activities are not abating. While acknowledging that the government and security agencies are making efforts to curtail this tide, it is pertinent that they be more strategic in their approach so that their efforts could yield the required results.
It is important to stress that this wave of insecurity is doing a lot of damage to the image of the country and the economy, as prospective investors are being discouraged to invest in the economy while local businesses continue to groan under the uncertainty created by continued insecurity in the land.
To aid the competitiveness of local manufacturers, government should strongly address the issue of multiple taxation and over regulation of the production sector which has added to the existing myriad of challenges.
“For an open trade arrangement of this nature, we recommend that Industries that would be negatively impacted by the influx of goods should be supported to invest in new areas and displaced labour retrained to take on new employments or vocation,” she added.
Establishment of National Action Committee on AfCFTA
At this point the establishment of National Action Committee on AfCFTA has become necessary in order to benefit Nigerian manufacturers. There is the need for Federal Government to establishment of National Action Committee on Africa Continental Free Trade Area (AfCFTA) to coordinate relevant Ministries, Departments, Agencies of Government and relevant Private Sector Groups to drive the implementation of the AfCFTA readiness projects and initiatives if success are to be made.
According to the Manufacturers Association of Nigeria (MAN) through its Director General, Mr. Segun Ajayi-Kadir, the decision of the Committee to recommend that Mr. President append his signature to the agreement was premised on the above stated conditions and it is hoped that these were duly attached to the President’s signature.
“We count, very strongly, on the commitment of government to enhance the capacity of the manufacturing sector and indeed other economic actors to take advantage of the opportunities inherent in the continental free trade area and to, quite importantly, mitigate the multifarious risks. We also expect that MAN would be part of the national structures and processes that would be put in place by the Federal Government to manage the process,” he said.
“ There is urgent need for the government to initiate policies that would encourage startups in the Small and Medium Scale Enterprise, this sector contributes over 80percent of the Gross Domestic product, and if properly incentivised and supported could be able to ramp up production and total exports of the country.
As the country commits to this, in addition to the President’s call for fair trade, he said, “we believe that the government will back its words with action by putting the necessary measures in place to prevent an abuse of agreement.”
In addressing the issue of the country’s porous border which encouraged smuggling of foreign goods, he said there could not have been a better time to adopt technology-based border policing and surveillance to check abuse of the intra-Africa Trade protocols and trade malpractices.