The African Union (AU), at the recent 30th All Heads of State and Government Summit in Addis Ababa, Ethiopia, adopted the establishment of a single, unified market for the continent. The market, which will be launched on March 4, is the outcome of Nigeria’s initiative on the development of a single market for increased trade and job opportunities, as well as poverty alleviation, in Africa.
During his presentation at the summit, Nigeria’s President Muhammadu Buhari argued in favour of the report on the establishment of free trade and related issues that would make a single, unified market a platform that has become timely in view of the benefits derivable from a globalised market economy. He also noted that the continent had already missed the timeline set by AU in January, 2012 to establish a free trade agreement in 2017.
Undoubtedly, the establishment of a Continental Free Trade Area (CFTA) which Nigeria robustly canvassed and has been adopted by the AU leadership in Addis Ababa will have great economic benefits, among which are the speedy growth and integration of African markets for goods and services, particularly at this time the global economy is rapidly changing and largely driven by uncertainty. Indeed, the establishment of the CFTA has the potential to provide Africa with a great opportunity to achieve significant growth that is driven by intra-African trade and capacity to negotiate with other regions or continents in trade matters.
We are also persuaded by President Buhari’s presentation that CFTA will bring about tremendous welfare gains associated with increased production, consumption and revenue, in addition to generating more economic growth, enhancing efficiency and supporting enterprise and innovations, while acting as “another step in uniting Africa and consolidating the architecture of the AU.”
Before now, experts from the three largest trading blocs in Africa – the Southern Africa Development Community (SADC), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (COMESA) – were locked in intense negotiations over a free trade agreement whose aim is to bring about a unified and liberalised single market. The talks finally bore fruit on June 10, 2015 when 26 African countries signed the Tripartite Free Trade Area (TFTA) agreement in Cairo, Egypt. Under this agreement, all the 26 countries with a combined Gross Domestic Product (GDP) of about $1.3 trillion and a population of 565 million, will merge into a common market and eliminate tariff lines and trade barriers.
Furthermore, the participating countries will benefit from a liberalised intra-regional trade which is expected to boost the flow of goods and services. When implemented, the free trade area will constitute about half of Africa’s GDP and half of its population and will cover a combined landmass of 17 million square kilometres. However, there is need for caution on the likelihood of abuse if the necessary spadework is not done before the market takes off. We are concerned about the Nigerian economy becoming a dumping ground for substandard/counterfeit products. In that respect, adequate measures should be put in place to protect our economy.
It is reassuring that the Federal Government has allayed such fears. Speaking shortly after the agreement was signed in Addis Ababa, Nigeria’s Chief Negotiator for CFTA, Ambassador Chiedu Osakwe, said Nigeria is bracing up to ensure that it does not become a dumping ground for all manner of goods and services. This is the right time to enforce the recent partnership agreement signed between Nigeria and a Swiss firm, King & Spalding. The agreement, on pro bono basis, provides legal services that will remedy trade policies and prevent the dumping of injurious goods in the Nigerian market.
Osakwe has assured Nigerians that the single market will bring about the benefits that President Buhari espoused in his speech, and that high level consultations have begun with all the stakeholders, including the organised private sector, among them, the manufacturing sector that will play a key role in the success of the CFTA. It is necessary to ensure the implementation of sensitisation programmes with industry groups and private sector participants. There should also be measures to safeguard our economic environment that is vulnerable to the dumping of unwholesome products. Statistics from the Standards Organisation of Nigeria (SON) show that over N100 billion worth of substandard and counterfeit products were impounded across the country in the last three years alone.
If the vision of AU leaders is to use the single market platform as the first step in the implementation of “Agenda 2028” for the socio-economic transformation of the continent and a building block in the achievement of the goals of the 1995 Abuja Treaty on the African Economic Community, every impediment capable of stalling the successful launch of the single market, just a few weeks from now, should be removed. The international community is watching African countries to see how they can unite to achieve the lofty objectives articulated in the CFTA proposal.