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Business News

NECA issues warning, says AfCFTA may cost Nigerian firms to fold up

Barely two weeks after President Muhammadu Buhari signed the African Continental Free Trade Agreement (AfCFTA), the Nigeria Employers’ Consultative Association (NECA) has stated that the nation has taken a great risk by signing the continental trade treaty, as struggling firms may fold up.

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AfCFTA, NECA, AfCFTA National Action Committee
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Barely two weeks after President Muhammadu Buhari signed the African Continental Free Trade Agreement (AfCFTA), the Nigeria Employers’ Consultative Association (NECA) has stated that the nation has taken a great risk by signing the continental trade treaty, as struggling firms may fold up.

The Director-General of NECA, Mr. Timothy Olawale, reportedly disclosed this while speaking during a press briefing on Wednesday at the Presidential Villa, in Abuja, after the leadership of the association met with President Muhammadu Buhari.

The visit to the Presidency came against the heels of the Association’s 62nd Annual General Meeting held in Lagos on Tuesday, where NECA lamented that some government agencies were frustrating the ease of doing business in Nigeria through contradictory regulations.

The signing of AfCFTA: On Sunday, July 8, 2019, President Buhari signed AfCFTA, joining over 50 other African countries in ratifying what is being considered as the largest free trade agreement in any continent in the world.

  • As widely reported, the trade treaty is expected to encourage trade relations in Africa by removing tariffs for over 90% of goods traded between member countries.
  • However, concerns have been raised that Nigerian manufacturers will be exposed to dangers, following AfCFTA signing. Meanwhile, Nairametrics has provided a detailed analysis of the trade agreement’s cost and benefits, as touching businesses in Nigeria and the economy.
AfCFTA: African leaders are launching the historic trade agreement today

President Buhari while receiving the report on AfCFTA

[READ: How AfCFTA affects every Nigerian Business]

Some issues raised: The Director-General of NECA noted that while AfCTA comes with some inherent benefits, the potential damage on the economy may be too costly. According to Mr. Olawale, Nigeria’s economy is too fragile for the treaty.

“Those issues border on those variables that will ensure the competitiveness of Nigerian businesses and industry. We don’t want a situation where our businesses are not competitive due to the disadvantaged environment they operate.

“Of course, we are all familiar with the disadvantaged environment with regards to the issue of infrastructure, among which is power and the issue of the road network – that is, transportation for goods and services and accessibility to the different business environments.”

SSKOHN

On Nigeria’s manufacturing sector, the NECA Director stated that AfCFTA signing would formally turn Nigeria into a dumping ground, if not properly handled, and this may affect struggling firms to eventually fold up. He cited the textile industry as an example.

“What we are saying is that if all these issues are not addressed properly, to make our business competitive, definitely we are going to be at the receiving end, to the extent that our nation will become a dumping ground. Some of the factories that are even struggling presently may end up folding up.

“Of course, we know the history of the textile sector and that can be repeated in any other sector and we don’t want us to get to that extent. That is why we are saying the government should put mechanisms in place to address these issues so that we can be competitive and take our rightful place by maximising the benefits of the AfCFTA.”

The Bottom line: It should be noted that NECA was one of the associations consulted by the Federal Government before President Buhari arrived at the decision to sign AfCFTA. What this implies is that the Federal Government is aware of the costs of the continental trade agreement.

Stanbic 728 x 90

Hence, just like NACA as rightly noted, all hands must be on deck, to ensure that the Nigerian economy is not trapped in the negative spillovers of signing AfCFTA.

[READ FURTHER: Signing AfCTA agreement; Our concerns for Nigeria]

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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    Business

    Hyundai and Kia to set up an assembly plants in Ghana by 2022

    The automobile giants will join Toyota-Suzuki, Nissan, Kantanka, Volkswagen, and Sinotruck who already have plants in Ghana.

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    Hyundai to invest $87 billion into producing 44 new electric vehicles, Hyundai partners Kia to invest €100m in electric vehicles 
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    Few weeks after Twitter announced its plans to open its first African office in Ghana, Hyundai and Kia have also concluded plans to set up an assembly plants in Ghana by 2022. The automobile giants will join Toyota-Suzuki, Nissan, Kantanka, Volkswagen, and Sinotruck who already have plants.

    Ghana’s Minister for Trade and Industry, Alan Kyerematen announced this on Twitter.

    READ: This is the New Tarrif Structure For Importing Tokunbo & Brand New Cars

    Pleased to announce that Hyundai & KIA are set to establish assembly plants in Ghana by the end of 2022 to join Toyota-Suzuki, Nissan, Kantanka, Volkswagen & Sinotruck. The Ghana Auto Development program = 3,600 assemblies & 6,600 manufacturing parts jobs in Ghana.

    The local assembly of vehicles, 3,600 direct and indirect jobs would be created in Ghana, and the addition of components and parts manufacturing will also add about 6,600 direct and indirect jobs.”

    READ: Toyota snubs Nigeria as it moves to establish assembly plants in Ghana, Ivory Coast 

    Why this matters

    More foreign companies are shunning Nigeria in favour of Ghana. Recently, Nairametrics reported that Amazon is set to situate its African Headquarters in South Africa, a multi-billion dollar investment that is projected to create over 20,000 jobs both directly and indirectly.

    Following its move to Ghana, Twitter CEO, Jack Dorsey cited a number of human rights-related reasons for the choice of Ghana over Nigeria. Added to this are rising insecurity, stifling government regulations and the gapping infrastructural deficit bedevilling Nigeria. Consequently, our nation is steadily losing opportunities to attract foreign companies that could be very instrumental in bridging its unemployment gap which is currently over 30%.

    SSKOHN

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    Business

    Passports: Backlog of undelievered passports to be fixed before May 31st – Minister

    The government also announced the launch of a new passport application system, which would be aided by fast track services nationwide.

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    The Federal Government disclosed that all backlogs of undelivered passport requests would be fixed before May 31st, and announced the launch of a new passport application system, which would be aided by fast track services nationwide.

    This was disclosed by Minister of Interior, Rauf Aregbesola, in a press briefing with newsmen on Thursday.

    What the Minister said

    “On or before May 31st, all backlogs of undelivered requests for passports will be totally met, unless such applications have a problem,” he said.

    “But before the deadline, the problematic application would be contacted, so that we know what’s wrong with the applications. Assuming there would be no problem, every successful application for a passport would be given a passport on or before May 31st,” he added.

    READ: Canada invites 3,900 new PR candidates, introduces new programme to attract Nigerians

    The new passport process

    The Minister disclosed that the FG will launch a new passport application process which would come into effect soon.

    “When you finish your application process, there would be a waiting period of six weeks to collect your passport, however, if you want an express service, there would be fast track centres nationwide, to meet requests for express passport users,” he said.

    What you should know 

    • Recall Nairametrics reported last month that the Federal Government inaugurated the Nigeria Immigration Service Passport Express Centre, which is a partnership with the private sector to enable the government offer passport services to Nigerians and make passports available in a maximum of 72 hours of a successful application.
    • The FG also launched the Electronic Temporary Passport to cater for Nigerians desirous of returning home but whose national passport is not available.

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