From Addis Ababa to Durban, Lagos to Cairo, from the Sahara Dessert to the Nile River, over a billion people with 5 official working languages – Arabic, English, French, Portuguese and Swahili – will again celebrate Africa Day this year.
A day to remember, reminisce and celebrate successes recorded against the struggles for independence, freedom from apartheid and colonization. Although, with the new normal brought about by Coronavirus, the 2020 celebrations would be quite unlike previous years.
The Africa Union (Formerly OAU) has recorded good milestones in terms of political independence and self-governance. So now is a good time for Africa to reflect on our independence.
On reading the objectives of the Africa Union (AU), words like independence, territorial integrity, human rights, security, cooperation are splattered across the pages. Significantly, none of the AU objectives seeks economic autonomy for Africa or her member states. This is a fundamental flaw which speaks directly to Africa’s issue of having a large population without the requisite skills for growth.
Our education is largely dependent on the western curriculum and narrative. There is hardly any major infrastructure, industrial or development project in Africa with 100% African content in manpower, materials or capital.
It is now well established and more evident that political independence without economic independence is like a car without an engine. Economic empowerment is the nucleus of national development. No fewer than 14 West African countries currently use CFA Franc, with some having used the currency for at least 75 years. This goes beyond nameplate as the Bank of France holds half of those countries’ currency reserves. This is effectively cutting their growth capacity by 50%.
8 of those 14 countries will relinquish the CFA franc for the new ECOWAS currency, ECO (to be launched in July 2020). However, there is no indication that the affected African leaders would ask France for compensation for the years of economic sabotage to their countries. The introduction of the ECO was to bring a ray of hope, but we hope the real difference would not just be in the colour of the currency. This is because the ECO will not be autonomous but would be pegged against the Euro.
France is not alone in the economic sabotage of Africa, they are in the good company of the United Kingdom, the US and Belgium, to mention a few. However, are these foreign countries to blame? Africa got her independence, but African leaders refuse to be independent and the dependent mentality is also enshrined in the AU objectives.
One of the AU objectives states “to work with relevant international partners in the eradication of preventable diseases and the promotion of good health on the continent.” The statement looks good superficially, but it is enlaced with aid orientation, the lack of drive for self-reliance, and a beggarly mindset.
Let us educate Africa to pursue the development of its people, with core skills that are necessary to deliver the quality of the progress and growth that Africans desire. African construction companies should make African infrastructure and 100% African content should be the target in automobile engineering, healthcare, information technology,
Necessity is said to be the mother of invention. The need for Africans to lead Africa out of poverty, tyranny and underdevelopment is a matter of great importance, far beyond just necessity. Every African must desire to get skilled, and not just education, as we currently have it. We must have the competence to develop our agriculture system, mine Africa’s natural resources and add value by processing them locally.
Africa Day would only be truly worthy of celebration when African people and countries are skilled enough to accomplish our dreams of self-reliance and economic independence.
Article written by Olatunde Akintola. Olatunde is a Fellow of the Institute of Chartered Accountant of Nigeria and alumni of Manchester Business School. He writes from Lagos.
Tasks before the AfCFTA dispute settlement body
The success of the AfCFTA will depend largely on the willingness of the member states to adhere to the agreement.
The Dispute Settlement Body (DSB) of the African Continental Free Trade Area (AfCFTA) held its inaugural meeting on 26 April 2021 at the AfCFTA Secretariat in Accra Ghana. The DSB is composed of the representatives of the State Parties and shall have the power to establish Dispute Settlement Panels and an Appellate Body responsible for settlement of disputes between the member States.
The mandate of the DSB also extends to adopting the reports of the Panels and Appeal Body as well as monitoring and ensuring the implementation of the ensuing decisions. In carrying out its mandates, the DSB will work with the AfCFTA Secretariat while maintaining its independence in the area of dispute settlement.
The inaugural meeting signals the readiness of the AfCFTA dispute settlement infrastructure to take up any disputes that may arise in the course of trading amongst the member States. Disputes are inevitable in any free trade area and when any such disputes arise under the AfCFTA, the resolution is to be in line with the Protocol on Rules and Procedures on the Settlement of Disputes which forms part of Phase I Negotiation.
Recognizing its importance to the success of the trade deal itself, the Protocol proclaims that “the dispute settlement mechanism of the AfCFTA is a central element in providing security and predictability of the system” and “shall preserve the rights and obligations of State Parties under the Agreement and clarify the existing provisions of the Agreement in accordance with customary rules of interpretation of public international law.”
Though inspired by the World Trade Organization (WTO)’s dispute settlement architecture, the AfCFTA framework is meant to address some of the lapses in the WTO. In an exclusive opinion piece for “The Africa Report”, Mr Wamkele Mene, Secretary-General of the AfCFTA, explained how the AfCFTA will work in order to avoid the pitfalls of other trading blocs. As noted in the report:
“The WTO’s tribunal of final instance for global trade disputes, the Appellate Body, has been reduced to irrelevance over disagreements on its composition. The paralysis of both the WTO’s negotiating and dispute settlement arms means that trade disputes between China and the United States, two of the WTO’s largest members, have flared into open hostility.”
Drawing from the WTO experience, the African States in negotiating the free trade treaty cherry-picked the aspects of the WTO’s dispute settlement system that have worked and jettisoned the problematic parts.
At the Virtual Press Conference held on 04 May 2021 to update the public on the status of the implementation of the AfCFTA and the progress made so far, the AfCFTA Secretary-General re-echoed the importance of the dispute settlement mechanism to the success of the AfCFTA while answering questions from journalists across Africa. Commenting on the milestone achievement recorded with the inaugural meeting of the DSB, he noted that:
“The dispute settlement is really the mechanism and is at the heart of the African Continental Free Trade Area. And it is at the heart of what we mean by a rule-based trading system. And at the heart of what we mean by market certainty and predictability. For the first time on the African continent, there is a dispute settlement body that will have oversight over all the disputes that arise under the agreement whether there are investments related, trade in goods, trade in services, market access related disputes. This body will have oversight over all of that.”
All eyes are now on the AfCFTA DSB as it shoulders the task of ensuring that disputes between member States are resolved in an efficient, transparent, fair and impartial manner. The starting point is to ensure that persons appointed to be members of the Dispute Settlement Panels and Appellate Body have the expertise and experience in the subject matter of the dispute and are chosen strictly on the basis of objectivity.
There is an even more important corresponding duty on the State Parties when nominating persons to be included on the indicative list or roster of individuals to serve as Panelists to ensure that nomination is based on merit and proven expertise on the subject matter. The member States should eschew any nepotistic or tribal considerations in nominating State representatives. The Nigerian government should resist the temptation to premise its nominations on Federal Character or other ethnic or religious considerations as we’ve seen in recent appointments.
Recent events such as the reported discriminatory measures against Nigerian traders in Ghana, the closure of the Nigerian border with Benin Republic, the Xenophobic attacks in South Africa on African businesses and the retaliatory attack on South African-owned businesses present examples of the kind of disputes that may come up before the AfCFTA DSB assuming that similar issues arise in the future. Others may include disputes over conflicting public policies, tariffs and non-tariff barriers, rules of origin, dumping, regulatory excessiveness, standardization, trans-shipment, taxation, market access, and consumer protection etc.
The AfCFTA dispute settlement mechanism is restricted to State-to-State disputes. The treaty is silent on the mechanism for the resolution of disputes between private individuals. Notwithstanding this limitation, the private sector participants such as the SMEs and other business entities will be able to petition their governments to implement the rights and obligations set out in the agreement establishing the AfCFTA. That way, the rights of the private sector can be enforced using the State instrument.
For instance, in a situation where citizens of a member State are being subjected to discriminatory measures in another AfCFTA member country, the affected country may decide to refer the case to the DSB on behalf of its citizens, after exhausting the amicable settlement options such as Good Offices, Consultations, Conciliation and Mediation. It is not yet clear what yardstick will guide such referrals or to what extent such anti-free-trade measures will impact on the citizens of the member state before it decides to challenge the infractions at the DSB. Whatever the case, where a member state fails to protect the rights of its citizens, the affected traders may seek other legal remedies available under the national laws or within any bilateral and multilateral instruments applicable to the disputes.
In relation to investment disputes, the ongoing negotiation of the AfCFTA Protocol on Investment is meant to clarify the uncertainty around the framework for resolving investor-state disputes. The member states in choosing to resolve their disputes within the AfCFTA framework should be aware of the fork-in-road provision under article 3(4) of the Protocol, which precludes a State Party who has invoked the dispute settlement procedure under the Protocol with regards to a specific matter from invoking another forum for dispute settlement on the same matter. Another area of interest is the enforcement of decisions reached under the AfCFTA dispute settlement process.
The effectiveness of a dispute resolution mechanism is often measured with the 3 E’s which are efficiency, expertise, and enforceability. Challenges will likely arise in relation to compliance with decisions under the AfCFTA as we have seen under the WTO and other regional trade treaties. It is hoped that the desire to enhance investors’ confidence and the spirit of amity will spur the AfCFTA members to comply with decisions made by the dispute settlement bodies. In the end, the success of the AfCFTA will depend largely on the willingness of the member states to adhere to the agreement and to eschew any form of self-help when they perceive any breach of the trade deal.
Insurance Recapitalization: The quest for efficiency
To tap into this, however, would require players to come up with innovative products.
As the phase II deadline for the recapitalization of the Nigerian Insurance Industry draws nearer, cracks are beginning to emerge from the wall. The most recent being the National Insurance Commission’s (NAICOM) revocation of UNIC Insurance Plc’s license with effect from the 25 March 2020. Consequently, the firm was handed over to a receiver/ liquidator to ensure a seamless liquidation process.
According to Mr. Sunday Thomas, the Insurance Commissioner, the company currently manifests every symptom of a business that would not survive the recent wave, and all efforts to resuscitate it are being frustrated by its owner.
Over the years, especially since the last recapitalization in 2007, the industry has been engulfed in a brawl between the laggards and the high-fliers. While the underperforming entities constantly have issues of delay in claims payment, which has created distrust for the general insurance proposition in Nigeria, the “high-fliers” have continued to battle that narrative through increasing levels of efficiency.
NAICOM has also been coming up with policies to ensure seamless insurance delivery. Recall that in 2019, NAICOM instituted measures to ensure that players in the industry make prompt claims and benefits settlement a priority as part of its quest to restore the eroding public trust for Insurance in Nigeria.
Since the policy of recapitalization was proposed by the regulator, activities have intensified in the industry as players seek to meet the stated deadlines. For instance, we saw a flurry of bonus issuance of shares in December 2020, as firms sought to meet the Phase I deadline by converting retained earnings to paid-up capital as directed by NAICOM. This followed in the track of the series of takeovers that were announced in late 2019 and early 2020. We note that beyond improving underwriting capacity in the industry, the recapitalization exercise would eliminate operationally weak firms that have been a spanner in the wheel of the industry over time.
In our view, there is enormous potential for the players in the insurance industry in Nigeria given its untapped potentials as insurance penetration remains significantly low. To tap into this, however, would require players to come up with innovative products.
One of such innovative ideas in our view is developing products targeted at millennials and Gen Z, who are currently excluded from the insurance net in Nigeria; despite constituting a sizeable number of Nigeria’s population. Opportunities in the insurance industry are widely unexplored and a combination of favourable policies from NAICOM and efficient delivery by surviving players can help open more untapped areas.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.