Adopting a Restrictive Rule of Origin will not allow the Nigerian manufacturing industry enjoy the full benefits of the African Continental Free Trade Area (AfCFTA). This is according to Peter Lunenborg, the Senior Program Officer at South Centre.
According to him, most sectors in the industry still source the bulk of their raw materials and expertise from outside the continent.
Speaking at the Manufacturers Association of Nigeria (MAN) webinar themed “AfCFTA Rule Of Origin: Implication For Growth Of Manufacturing Sector,” Lunenborg noted that while restrictive rules of origin are the best for wealth creation, the African continent cannot afford to toe that path just yet.
“It needs to be flexible because so far, most of the things produced here still require some input from foreign countries, in form of raw material or technology or expertise. For instance, Nigeria imports half of the wheat used for its flour manufacturing from the United States, because Africa has a huge supply deficit,” he said.
Why this matters
One of the objectives of the AfCFTA is to promote industrial development through diversification and regional value chain development, Agricultural Development, and Food Security. AfCFTA also aims to create a single market for goods, services, and movement of persons within the African continent.
One of the ways of achieving this is removing duties and taxes from goods produced within the continent.
However, with many of the manufacturing companies sourcing a bulk of their raw materials externally, a restrictive rule of origin will not let the local industries to fully reap the benefits of the Free Trade Area.
Lunenborg explained that this is the reason for adopting a flexible rule of origin so that local companies that source a minimum 40% of their raw materials locally can be qualified as originating and given the benefits.
Adopting a flexible RoO first is a trade-off where the country gives up some benefits so that local manufacturers can benefit from the arrangement at the level they are.
Reaping AfCFTA’s benefits
Aissata Koffi Yameogo, ECOWAS’ Programmes Officer in charge of implementing AfCFTA rules of origin in the continent, said in her address that the implementation will expand market for the manufacturing industry to 1.3 billion West African citizens, without additional duties and fees.
“It will build production capacity in the region and develop the value chain, and increased export to other African states” she added.
The benefits would also encourage member states to specialise in the production of a certain good where they have a comparative advantage, thus enhancing the quality and quantity of local production and creating more jobs.
She commended MAN for the webinar, noting that it was important for manufacturers to be sensitized and trained adequately so that they could reap maximum benefits of the AfCFTA.
MAN President, Mansur Ahmed, in his welcome address delivered by Paul Gbededo, noted that the MAN webinar series are geared towards sensitizing manufacturers in the country, and working together to create “a watertight Rule of Origin” within the next six months.
Why Nigeria is yet to ratify implementation of AfCFTA
Even though 30 countries have ratified the implementation of the agreement, AfCFTA is yet to get ratified by an Act of the Nigerian Assembly.
Secretary of the National Action Committee on AfCFTA, Francis Anatogu, stated in his presentation that some of the threats to Nigeria’s ratification of the agreement include; the rise in smuggling, illegal transshipment of goods from non-African countries, and import surge arising from trade liberalisation without corresponding growth in export of Nigerian products.
“Nigeria also has to combat with the influx of substandard products due to uneven quality standards in some African countries, and loss of revenue from import duties and levies, exacerbated by smuggling and Rule of Origin abuses. Putting these things in check will help speed the ratification of the AfCFTA” Anatogu stated.
He added that the National Action Committee on AfCFTA is working together with the Manufacturers Association of Nigeria (MAN) on the issues, to hasten the ratification of the agreement.
President Muhammadu Buhari, in July 2019, after initially withdrawing assent, signed the AfCFTA agreement at the 12th Extraordinary Session of the Assembly of the African Union in the Niger Republic.
According to International Monetary Fund (IMF), the elimination of tariffs could boost trade in Africa by 15-25% in the medium term, and once fully implemented, is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion.
Guinness warehouse in Lagos on fire
The warehouse was said to be used in storing plastic crates.
A warehouse that is reportedly owned by Guinness Nigeria Limited, along the WEMPCO Road, Ogba, has been gutted by fire.
The warehouse was said to be used in storing plastic crates.
READ MORE: Why Guinness is a stock to pick – RenCap
Director-General, Lagos State Emergency Management Agency, Olufemi Oke-Osanyintolu, explained that emergency responders, including the LASEMA response team and official of the state fire service, were on ground to salvage the situation, adding that the immediate cause of the fire could not be ascertained.
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He said, “On arrival at the scene of the incident at 0430am, it was observed that a warehouse storing plastic crates which appears to belong to the Guinness Nigeria Limited and used to store plastic crates, had been burnt.
“The immediate cause of the fire could not be determined. However, the agency’s responders and LASG Fire Service officials are on ground to carry out a dampening exercise to forestall any spread or secondary incident.”
READ ALSO: UPDATE: CAC headquarters in Abuja on fire
More details later…
NBC slams N5 million fine on Nigeria Info over Mailafia’s inciting comments
This was contained in a press statement which was issued by NBC on Thursday.
The Nigerian Broadcasting Commission (NBC) has slammed a fine of N5m on a radio station, Nigeria Info, over the recent claim by a former Deputy Governor of the Central Bank of Nigeria, Dr Obadiah Mailafia.
Mailafia, in an interview in one of the radio station’s programmes, claimed that some of the repentant Boko Haram militants confessed that one of the northern governors is the commander of Boko Haram in Nigeria.
This was contained in a press statement which was issued by NBC on Thursday, August 13, 2020, titled, ‘’The National Broadcasting Commission fines Nigeria Info 99.3 for Unprofessional Broadcast’’.
The NBC expressed its displeasure at the radio station for providing its platform to be used to promote unverifiable and inciting views that can lead to crime and public disorder.
The NBC’s statement reads, ”The National Broadcasting Commission has noted with grave concern, the unprofessional conduct of Nigeria Info 99.3FM, Lagos, in the handling of the Programme, “Morning Cross Fire”, aired on August 10, 2020, between 8.30 am and 9.00 am. The station provided its platform for the guest, Dr Mailafia Obadiah, to promote unverifiable and inciting views that could encourage or incite to crime and lead to public disorder.”
”The Commission, again, wishes to reiterate that Broadcasters hold Licenses in trust for the people. Therefore, no Broadcast Station should be used, to promote personal or sectional interests at the expense of the people.”
NBC noted that Dr Obadiah’s comments on the Southern Kaduna crisis, were devoid of facts and the broadcast of such by Nigeria Info 99.3 violates some sections of the Nigeria Broadcasting Code which include;
- No broadcast shall encourage or incite to crime, lead to public disorder or hate, be repugnant to public feelings or contain an offensive reference to any person or organisation, alive or dead or generally be disrespectful to human dignity;
- Broadcasting shall promote human dignity, therefore, hate speech is prohibited;
- The broadcaster shall ensure that any information given in a programme, in whatever form, is accurate;
- The Broadcaster shall ensure that all sides to any issue of public interest are equitably presented for fairness and balance;
- The broadcaster shall ensure that language or scene likely to encourage or incite to crime, or lead to disorder, is not broadcast;
- No programme contains anything which amounts to subversion of constituted authority or compromises the unity or corporate existence of Nigeria as a sovereign state;
- The Broadcaster shall not transmit divisive materials that may threaten or compromise the indivisibility and indissolubility of Nigeria as a sovereign state.
The NBC further states, ”Consequent on these provisions and in line with the amendment of the 6th edition of the Nigeria Broadcasting Code, Nigeria Info 99.3FM Lagos, has been fined the sum of N5,000,000.00 (Five Million Naira), only. This is expected to serve as a deterrent to all other broadcast stations in Nigeria who are quick to provide a platform for subversive rhetorics and the expositions of spurious and unverifiable claims, to desist from such.”
The NBC also stated that it will not hesitate to suspend the license of broadcast stations that continue to breach to breach the broadcast code.
Ride-hailing: Uber says industry guidelines are inconsistent, unclear
The new regulatory framework by the State government is expected to take effect from August 20, 2020.
Few days after the Lagos State Government announced a new guideline designed for ride-hailing operations in the state, one of the major operators, Uber, has picked holes in the guideline.
While the ride-hailing firm admitted that it is the responsibility of the government to regulate the industry and ensure operational allignment, it stated that such regulations are expected to support innovative technology ideas that fit the 21st-century businesses.
This was disclosed by a spokesperson for Uber, who replied Nairametrics’ emailed enquiry but pleaded anonymity.
The Backstory: Under the new regulatory framework by the state which will take effect from August 20, 2020, ride-sharing companies would be required to pay the Lagos State Government a 10% service tax on each transaction. Part of the framework said:
“Operators must also pay a provisional license of N10,000,000.00 for every 1000 cars in their unit and N25,000,000.00 for every unit above 1000 cars.
“Annual renewal of the license would cost N5,000,000.00 for every unit of 1000 cars and N10,000,000.00 for units with over a thousand cars in operations.”
The Lagos State Government also demands access to operational database for any ride-sharing company operating in the state.
Under section 3.11 of the guidelines, Lagos State also proposes that vehicle owners must, amongst other things:
State of Vehicles to use: Where the vehicle is not new, the vehicle must be within the first three (3) years of its manufacture as specified by the manufacturer.
In their response, Uber’s spokesperson said:
“We have always been willing to engage with governments on regulations to ensure our operations align with best practices locally and internationally, as we believe regulations need to support innovative technology ideas that fit 21st-century businesses.
“The current proposed regulations are inconsistent and unclear. We are working to better understand how they will impact the future of our business and network of driver-partners. We will give an update in due course.”
What it means: If the guideline is implemented, riders may have to pay more for services rendered by the ride-hailing firms, as the companies may increase the fares to keep their heads above water.
On the type of vehicles allowed to operate by the guideline, several drivers and car owners may be frustrated out of business, a development that may push up the unemployment rate in the state.
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Note that most of the operators currently allow vehicles manufactured as late as 2004 in their fleets. But with the new directive, any vehicle manufactured earlier than 2017 would not be allowed to operate in the state.
This means drivers that would be frustrated out of business will join the teeming unemployed residents in the state at a time the nation’s economy is expected to contract in 2020.