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Economy | Nigeria Economy

AFCFTA: NESG Lauds FEC On Formal Ratification

Nov 16, 2020   •   by   •   Source: Proshare   •   eye-icon 940 views

Monday, November 16, 2020 / 7:44 AM /NESG / Header Image Credit: NESG


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TheNigerian Economic Summit Group (NESG) congratulates the Federal ExecutiveCouncil (FEC) of Nigeria for taking the bold of ratifying the AfricanContinental Free Trade Area (AfCFTA) Agreement on 11th November2020.


Afterthe President signed the Treaty on the 7th of July 2019, theNational Action Committee (NAC) was inaugurated to examine what it would takefor the country to approve and domesticate the Agreement for appropriateimplementation, particularly in the following areas: (a) key institutional considerations; (b) legal frameworkpolitics and governance considerations; (c) peace and security; (d) goodgovernance institutions; and (e) sectoral policies.


The NAC was needed because of the large economic size ofNigeria and the need to draw lessons from similar free trade engagements in theEconomic Community of West African States (ECOWAS) and from other parts of theworld.

The NESG argues that time taken to fully consider theinitiative is not wasted, as it has allowed a greater number of stakeholdersacross the country to be briefed about the AfCFTA, and encourage the governmentto put in place institutional structures that are necessary for the effectiveimplementation of the agreement in the country.


In the course of waiting, individual and corporatecitizens have, according to the NESG, become aware that AfCFTA would: (1)encourage competition, which would consequently increase Nigeria's efficiency;(2) make Nigeria produce more goods and services it is most efficient in; (3)eliminate tariffs and quotas as well as  monopolies, as more players wouldbe brought into the market; (4) lead to lower prices of goods and services; and(5) enable consumers gain better, easier and cheaper, access to a variety ofproducts.


Despite the mentioned benefits, Nigerians becameconscious that: (1) when imports are made easier, domestic producers couldaccess them, allowing them adapt the ideas and sell them, particularly whenthere are no strong intellectual property laws; (2) outsourcing of jobs can become a trendwithin a free trade area, if there is a lack of labour protection laws, whereemployees work in unhealthy and substandard work environments; and (3) sincemember countries in the AfCFTA are no longer able to collect  importduties, Nigeria needs to think of ways to compensate for the reduction in taxrevenue.


Having weighed the various options, the trade creationand diversion effects of the economic union may lead to the attraction and developmentof continental transnational corporations headquartered in Nigeria, withaffiliates around other African countries.


However, immediately after its ratification, the NESGwas of the opinion that a bill which comprises of the various policies thatwould be affected by AfCFTA should be forwarded to the National Assembly, tofully domesticate the Treaty across national Ministries, Departments andAgencies (MDAs). In addition, the economic think-tank has argued that competentinstitutional structures and necessary infrastructure must be put in place foreffective implementation of the Agreement.


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 Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

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