African Free Trade Agreement Failed To Address Trade Barriers Among Members — Dangote, MAN, LCCI

 

Until existing trade barriers among African countries are removed, the African Free Trade Agreement (AfCFTA) recently adopted will remain effectual.

Endorsing the Nigerian government’s decision to without its signature to the agreement, Dangote Group, Manufacturers Association of Nigeria (MAN) and Lagos Chamber of Commerce and Industry (LCCI) said there are many barriers in the tariff system among the regions of Africa.

Speaking at the just concluded two days Africa Trade forum 2018, tagged, “AfCFTA Ratification and Implementation: A game Changer for Africa Economies” held in Lagos, Aliko Dangote, chairman of Dangote Group, said: “What is the rationale behind formation of regional economic blocs, if trade barriers still exist among African States?”.

 He bemoaned the frustrations, administrative challenges and difficulties his Group often goes through in exporting products to neighbouring African countries.

“There is need to consult widely and we are supporting the government in this regard. It is not that I am opposing AfCFTA, but there are many barriers especially in our tariff system among the regions of Africa. We don’t want a situation where Africa will become a dumping ground,” Dangote said.

“There were some trade agreement in the past. Why are they not working? We as a company, Dangote will benefit from AfCFTA. We need 80 percent of raw materials to be very productive; importation of raw materials is not the best for us if we must implement AfCFTA. We don’t want foreign goods to come and dominate our market. Just to take cement to Ghana we have to sign 38 documents.

“For example in Benin Republic that is 24 kilometres from us taking our products there is difficult. So all these and many other things need to be addressed. What we need is backward integration that will make us produce competitively.”

Corroborating Dangote’s views, Director-General, MAN, Mr. Segun Ajayi-Kadir, noted that MAN has consistently maintained that it is not against intra-African trade, especially one that boosts the market reach of Nigerian businesses, including manufacturers. 

“We don’t want a situation  where Nigeria will be a dumping ground. However, when the agreement was being signed, we cautioned against signing an agreement without fully engaging the relevant stakeholders and adequately comprehending its implications for the Nigerian economy in general and the manufacturing sector in particular.

“We counselled that a country specific study should be carried out to ascertain its implications for the Nigeria economy, particularly the productive sector. A country that exports jobs, imports poverty.

“It is gratifying to note that the Federal Government embarked on the needed nationwide consultation and is doing the needful in reconstituting the presidential committee dealing with the matter and the private sector is called to join the process.

“At the end of the day, Nigeria will take an informed decision as to what type of AfCFTA it should sign and when to sign.”

Also, the president of LCCI, Mr. Babatunde Paul Ruwase said: “What is important in my view is to ensure that appropriate safeguards are in place to protect the vulnerable sectors of the economy. He noted that there was nothing wrong with free trade, but there was need for more consultation.

“Nigeria must be part of the AfCTA for numerous reasons which include the fact that it is a platform for our Small Scale Enterprises, SMEs to be integrated into the regional economy and a means of acceleration of women’s trade and economic empowerment.  

“We counsel that in order to take full advantage of the AfCFTA, government needs to intensify current efforts to eradicate non-tariff and regulatory barriers to international trade such as border delays, burdensome customs and inspection procedures, as well as ensure that multiple licensing and taxes are eliminated. A situation where it is easier to import than to export will defeat the purpose of signing the AfCFTA” he added.

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