The African Continental Free Trade Area (AfCFTA) is expected to open up Nigerian businesses to a market of over 1.2 billion people and a GDP of $2.5trillion.
The Nigerian Government ratified the agreement on November 12, ahead of the December 5 deadline issued by the African Union to its 55 member states, as AfCFTA is expected to commence January 2021.
Despite this welcome development, some stakeholders are still concerned with the border closure policy of the Federal Government and dumping of substandard goods in the Nigerian market, with the recent disclosure by the FG that the borders will be reopened soon.
Key stakeholders spoke to Nairametrics on the significance of the ratification to Nigeria, the highly anticipated border opening, and the necessary steps that should be taken by the FG to fully maximize the trade agreement.
Importance of the ratification
Mr. Muda Yusuf, the Director-General of Lagos Chamber of Commerce and Industry (LCCI), opined that the ratification has addressed the uncertainties within the Nigerian business circle concerning the FG’s stance on AfCFTA.
He said, “The ratification of the AfCFTA is good news. This decision has cleared the uncertainty and anxiety over Nigeria’s stance on the agreement. The truth is, we have seen a great deal of equivocation and prevarication over the agreement in the last two years.”
Mr. Cheta Nwanze, Partner and Senior Analyst at SBM Intelligence, said the move is in Nigeria’s best interest since trade has historically been a pathway to prosperity.
He said, “Nigeria’s agreement to ratify is a good move, which is ultimately in the country’s best interest. Now, the country must position itself to make the best of it. Trade has historically been a pathway to prosperity, and this should be no different.”
After the ratification, what next?
Mr. Yusuf said, “The next step is to support the Nigerian private sector to take advantage of the 1.2billion market and $2.5trillion GDP, which offers tremendous opportunities. We need to strengthen the competitiveness of our domestic firms, especially those in the real sector.
“We need to liberate them from the shackles of constraints putting pressure on their costs and inhibiting their competitiveness. The quality of our infrastructure needs to improve, our policies need to facilitate competitiveness, our regulations need to support business growth, and our institutions need to demonstrate a better appreciation of the value of investment and investors in the economy.”
However, he emphasized that the competitive nature of the agreement would create ‘winners and losers’ and urged Nigerian businesses to review their business models.
“The AfCFTA will produce winners and losers across sectors. The vulnerability risks vary from sector to sector. Investments in the real sector are more vulnerable than those in the service sector. It calls for a review of the business models of many firms and industries in the light of new competitive forces that will emerge.
“The business landscape will change and many investment assumptions would have to be reviewed to ensure sustainability,” he added.
The anticipated border reopening
Mr. Nwanze believes the FG has taken the right step with the planned reopening of the border. But, believes that the borders will not be opened, with the perceived contradiction that exists amongst government agencies on the border closure issue.
Nwanze said, “The Finance Minister already said that the borders will be reopened. However, her disclosure, which is in the right direction, has been contradicted by the Agriculture Minister.
“Ideally, what should come next is for the government to put things in place for an export driven economy. That’s the way to take advantage of the AfCFTA. Unfortunately, the signal that we are seeing indicates major opposing views within the government.”
“If I were to bet on this, I’d say that the borders will remain shut beyond 1st of January, and this attitude to trade will continue as long as Customs remain under the current leadership.
“It is quite contradictory, especially as a Nigerian, Ngozi Okonjo-Iweala, is set to become WTO DG and as a result, one of the world’s leading advocate for trade. This represents a major irony,” he added.
Mr. Yusuf said, “The border closure is not consistent with the ratification of AfCFTA, which is why the FG has considered reopening the land borders ahead of its commencement in January 2021.”
The fear of dumping from neighboring countries
Mr. Nwanze said, “There are already a number of bodies who are tasked with ensuring that certain goods are of the required quality.
“Customs, the Standards Organization of Nigeria, NAFDAC, and others should do their jobs and stop harassing business people. The final arbiter of course is the consumer, who decides where and on what to spend his hard-earned money, rather than just settling for substandard goods.”
What you should know
- Vice President Yemi Osinbajo disclosed in a conference with the Chartered Institiute of Personnel Management of Nigeria (CIPM) on Thursday, November 26 that quicker implementation of ratification protocols will ensure free movement of services, goods, and persons.
- Yewande Sadiku, CEO of Nigerian Investment Promotion Council (NIPC), said in September that Nigeria is more ready for the African Continental Free Trade Area (AfCFTA), due to her domestic market manufacturing value addition capacity, which is 7 times the average of the top 20 economies in Africa and others.
- The Nigerian trade office also disclosed that the Instrument of Ratification will be deposited with the AUC at Addis Ababa on Tuesday, December 1, 2020.
Nigeria has the potentials to benefit from the trade agreement in the areas of agriculture and service exports. However, Nigerian companies should be strategically prepared to compete with other African countries for the 1.2 billion market share.
Summarily, just like the EU and ASEAN trade bloc has produced some ‘winners’, the same is expected to happen when AfCFTA commences next year.
President Buhari has approved the expansion of the NSIP – Minister
Minister Sadiya Farouq has disclosed that President Buhari has approved the expansion of the NSIP.
The Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, disclosed that President Muhammadu Buhari has approved the expansion of the National Social Investment Programme (NSIP).
According to the disclosure by the Minister during the opening ceremony of the 4th annual review of the National Home-Grown School Feeding Programme, in Abuja, the FG hopes that the plan would lift 100 million Nigerians out of poverty in 10 years.
She revealed that the expanded NSIP would include an additional number of 5 million pupils in non-conventional educational settings in the National Home-Grown School Feeding Programme (NHGSFP), the Npower program is to create jobs for a total of 1 million beneficiaries; GEEP programme to provide loans to an additional 1 million traders, farmers and market people; and the Social Register is to accommodate an additional 1 million households.
Some other programmes in the scheme include: TRADERMONI, MARKETMONI, FARMERMONI, MSME Survival Fund, and N75 billion National Youth Investment Fund (NYIF).
What the Minister is saying
- “It is therefore safe to say that we have been working tirelessly to ensure that vulnerable Nigerians are brought into the Federal Governments Social Protection umbrella which seeks to support, empower and level the playing field, so that they are better equipped to handle economic and social shocks while contributing their quota to society and to the betterment of our great nation.
- “The National Home-Grown School Feeding Program is an important intervention because of the multiple wins it is capable of delivering. It is a vehicle for reducing hunger, promoting educational gains, health status improvement and economic stimulation.
- “The long term benefits to our children and the future of the Nation cannot be overemphasised. Thus, we must resolve to remain steadfast in ensuring that this program reaches its objectives and improves the lives of its beneficiaries.”
What you should know
- Nairametrics reported that the Minister of State, Industry, Trade and Investment, Ambassador Mariam Katagum, disclosed that over 300,000 beneficiaries under the Payroll Support scheme and 166,000 artisans had been impacted by the FG’s Survival Fund programme.
- In October 2020, the President of Nigeria disclosed that the National Social Investment Programmes (NSIP) will be funded with N420billion in 2021, while the National Social Housing Programme (NISH) would be funded with N20billion from the 2021 budget.
Nigeria fully committed to promoting good governance practices in Africa – Buhari
President Buhari says that his government is fully committed to democracy and good governance in Africa.
President Muhammadu Buhari stated that the Nigerian government is fully committed to democracy and good governance in Africa.
He disclosed this at the Virtual Support Mission and Signing of the Memorandum of Understanding (MoU) between the Committee of Heads of State and Government participating in the African Peer Review Mechanism in Abuja.
The President said,
- “As you are aware, the Government of Nigeria has consistently supported the strengthening of democracy and good governance throughout the African continent, including under the umbrella of the African Peer Review Mechanism. We remain fully committed to promoting the good governance practice enshrined in the ideals and vision of the New Partnership for Africa’s Development, which gave birth to this review mechanism.
- “Nigeria will continue to support Africa’s renewal and rebirth evident in the collective commitment to this review in order to consolidate Africa’s path to healthy democracy and sustainable growth.”
He added that his administration has supported democratic ideals including Economic Diversification and Anti-Corruption as the main thrust of national change agenda, adding that “the totality of this strategy is premised on the promotion of democracy, respect for the Rule of Law and Human Rights, gender equality and by far the largest investment in social change in Nigeria’s post-independence history.”
On the peer review exercise, Buhari said that Nigeria learnt valuable lessons since the return of Democracy in 1999 and Nigeria’s participation in the review is “a firm demonstration of our belief in the dividends of democracy through this unique peer review system. We must stay the course and continue on this pathway to a peaceful, secure and more democratic Nigeria.”
What you should know
President Buhari disclosed last year that Biden’s election is a reminder that democracy is the best form of government.
- “In a democracy, the most powerful group are not the politicians, but voters who can decide the fate of the politicians at the polling booth. The main fascination of democracy is the freedom of choice and the supremacy of the will of the people.”
Telecom operators submit 43million NINs to NIMC for verification as deadline ends
Telcos have submitted about 43 million NINs to the NIMC for verification in order to have them registered with their respective SIMs.
Telecom operators have submitted about 43 million National Identity Number (NIN) to the National Identity Management Commission (NIMC) for verification, in order to have them registered with their respective Subscriber Identification Modules (SIMs).
This is as the Telecommunication companies said that they won’t block SIMs with unlinked submitted NINs as the deadline for the integration of NIN with SIM ends today, January 19, 2021.
This disclosure was made by the Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, who spoke on behalf of the telecom firms.
According to a report from Punch, the NIMC provided about 45 million NINs, as it registered about 2 million people in the last 1 month after the Federal Government ordered citizens to register their SIMs with valid NINs.
What the Chairman of ALTON is saying
Adebayo said that the NINs has been sent to NIMC for verification in order to ensure that the numbers were harmonized with their respective SIMs.
- “I don’t have the number of SIM cards that have been linked but at the last count, NIMC told us that they have about 43 million Nigerians who have NINs. So, we will be safe to assume that a large percentage of these citizens have delivered their NINs to the operators by way of dialling the USSD access code and/or visiting the operators’ websites and uploading their NINs on the websites.
- “And by extension, I will be right to say that operators have delivered those NINs to NIMC. Now, the second part of it, which is not in our control, is how many of these numbers uploaded by the operators and forwarded to NIMC have been harmonised? How many of them have been verified? That is not in our control, but as an industry, the large numbers we received from subscribers have since been delivered to NIMC.”
Adebayo pointed out that the responsibility is now that of the commission to educate the public on the number of NINs that had been verified and cleared for harmonisation with SIMs.
On whether the government would block the SIMs of subscribers who don’t yet have their SIMs registered despite submitting their NINs to their service providers, the ALTON chairman said such SIMs would not be blocked.
- “If you already have your NIN and you have delivered the number to your service provider and it has been acknowledged and forwarded to NIMC, I don’t think the penalty will be there for you as from tomorrow (Tuesday) if your SIM has not been registered with the NIN.
- “This is because as far as you are concerned as a subscriber, you have uploaded that number to your operator and forwarded to NIMC. Now, further interrogation of that means that you are not supposed to be penalised because you have done what you are required to do to your service provider and to NIMC.”
Adebayo said the penalty would be mainly for those who do not have the NIN and who were unable to deliver their NINs to their service providers.
What you should know
- It can be recalled that the Federal Government had on December 15, 2020, directed the telecom operators to block subscribers who had not registered their SIMs with valid NINs by December 30, 2020.
- Following a public outcry against the earlier announcement, the Federal Government extended the December 30, 2020 deadline to January 19, 2021, and also gave 6 weeks extension for subscribers without NIN from December 30, 2020 to February 9, 2021.
- However, some Nigerians have called for a further deadline extension or outright suspension of the NIN registration process due to the large crowds who are yet to have their NINs amid the risk of contracting Covid-19.