By Naomi Uzor
THE Nigerian Custom Service, NCS, has said that the implementation of the African Continental Free Trade Area, AfCFTA, is estimated to lead to around 60 per cent boost in intra Africa trade by 2022.
Disclosing this at the Roundtable on “AfCFTA and the challenges of Borderless Economy” held during the just concluded 41st Kaduna International Trade Fair organised by the Kaduna Chamber of Commerce, Industry, Mines and Agriculture, KADCCIMA; Deputy Controller of Customs, Zombie Headquarters, Kaduna, Ampitan Toyin, said that AfCFTA will attract Foreign Direct Investment, as investors will flock into the country.
“This adds capital to expand local industries and boost domestic businesses. It also brings in US dollars to many formerly isolated countries. It is also designed to increase economic growth. AfCFTA is an opportunity for countries and companies to help each other grow as they have done in other regions but trade liberalization has the potential to damage the poorest within those countries, which is why it is very important to have supportive policies.”
She noted that one of the challenges envisaged on AfCFTA is trade facilitation, as it will be a challenge to make way for easy and quick facilitation of people and goods in Africa because there is so much fragmentation, with economies at widely varying stages of development.
“While the reality is that there will likely be winners and losers, the role of the African Union will be to ensure shared prosperity on the continent, creating supportive policies, eliminating monopoly and stamping out uncompetitive behaviour,” she added.
Toyin described the rule of origin as a criterion used to determine the nationality of a product and the benefit which such product can enjoy within the free trade area. According to her, this is the major determinant of the success of any free trade area.
She stated: “For this programme to work effectively, it is necessary for AfCFTA to put in place institutional framework to effectively tax goods from third party countries and redistribute them properly among the various countries.
“If the laid down policies are not properly articulated, most of the local small industries might vanish due to unhealthy competition that might result from high cost of securing credit among others which might lead to increase in unemployment, crime and poverty. There will be loss in trade tariff revenue which forms a substantial part of fund required by the various governments to run their affairs.”
According to her, it is pertinent to note that Africa’s trade and integration have been pursued in the past through regional arrangements. Considerable progress has been made within regional blocs regarding tariff liberalisation but more still required to be done particularly on non-tariff issues.
“Africa inter and intra-regional/economic blocs trade is low, undermined by poor governance of non-tariff barriers overlapping membership and inadequate trade related infrastructure. More recently, Africa’s trade and integration agenda has become more ambitious and broader. Countries are adopting REC free trade agreement covering broader contemporary developmental and trade related issues such as services, investment, competition policy and intellectual property rights.
“On the margin, East Africa is producing a lot of diversified goods such as furniture, processed foods and textiles.”
However, we are still dependent on import from outside the continent. This means that there is enormous potential for Increase production within the continent. AfCFTA, therefore has a higher potential to do better if some of the issues raised above are addressed” she concluded.