The Chief Executive Officer of Economic Associates, Dr. Ayo Teriba, said on Monday Nigeria and other African countries lack the financial capacity to actualise the Africa Continental Free Trade Agreement (AfCFTA).
He urged the Federal Government to position the country’ economy in a way that would enable it to attract Foreign Direct Investment (FDI) which would in turn drive the AfCFTA.
Teriba was among the stakeholders who questioned Nigeria’s readiness to fully take advantage of the AfCFTA trade treaty.
Speaking during a stakeholder meeting organised by the Financial Derivative Company (FDC), he noted that all forms of iliquidity (including capital illiquidity) have continued to plague the Nigerian economy.
“Unless there is capital flow, Nigeria cannot afford to put in place the infrastructural capacity necessary for production,” he stated.
Why this matters: Note that if Nigeria cannot produce, it cannot adequately take advantage of the AfCFTA which has been adjudged the biggest trade treaty in the world. The country inability to take advantage of the AfCFTA would, therefore, imply that the essence of signing the treaty is defeated.
The issues: Teriba, who spoke during one of the panel sessions at the aforementioned event, reacted specifically to a keynote speech delivered by Mr. Souleymane Daigne, the Group Head of Trade at Ecobank Transnational Incorporated.
Daigne had spoken emphatically about the many advantages of AfCFTA which he identified as “very beneficial to Nigeria.” Some of these supposed advantages include:
- Encourage value addition to Nigeria’s raw materials
- Positive Impact on Nigeria’s SMEs sector
- Facilitate the diversification of the economy
- Attract FDIs into the country
- Benefit Nigeria’s geographic location in Africa, etc.
In his response, Teriba argued that there is currently no African country that has the capacity to add value to Africa’s raw materials before exportation.
He also reeled out data to prove that economies in Africa have been shrinking over the years.
Teriba added: “Similarly, Nigeria’s infrastructure (specifically the road and rail transportation system) has deteriorated over time.
“Consequently, these challenges make it difficult for us to ensure a successful actualisation of the Africa Continental Free Trade Agreement.
“The fact that you leave your borders open doesn’t mean that the goods that pass through them can move freely to their destinations.”
He also noted that there is liquidity in form of FDI on the international scene.
However, while other developing countries are striving to attract it (FDI), African countries (including Nigeria) are lagging behind.
He said the time has come for federal government to take advantage of these opportunities like its peers in the developing world.