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Opportunity beckons to the bold entrepreneurs of our land with the signing by Nigeria into the African Continental Free Trade Area (AfCFTA) on Saturday, July 6. The project commenced in May 2018 and effectively took off two months ago. President Buhari signed for Nigeria at the AU meeting in Niamey.
AfCFTAwill deliver access to all the 55 countries of Africa as a single market. The idea of the African common market is to enable better exchange between and among Africans to trade in goods and services with each other. It is one huge opportunity for our entrepreneurs and sundry businessmen.
What is AfCFTA, and how would AfCFTA serve our businessmen?
AfCFTA is a project of the African Union aimed at promoting and deepening trade between countries of Africa. Data on the trading relations of African countries shows that only 16% of business holds between and among African countries. The rest of it is with nations of Europe, America and Asia.
Various online sources such as Wikipedia state that “The African Continental Free Trade Area (AfCFTA) is a free trade area, outlined in the African Continental Free Trade Area Agreement among 54 of the 55 African Unionnations. The free-trade zone is the largest in the world in terms of participating countries since the formation of the World Trade Organisation.
The African Union brokered the agreement that 44 countries signed in Kigali, Rwanda on March 21, 2018. A central plank of the deal is the requirement on participating countries to remove tariffs from 90% of goods. They will allow free access to commodities, goods and services across the continent. United Nations Economic Commission for Africa estimates that AfCFTA will boost trade among African countries by 52% by 2022.
AfCFTA needed a minimum of 22 signatories to take effect. When the Gambia signed on April 2, 2019, as the 22nd country, the agreement became binding on May 30. It became operational following the Niamey Summit of Heads of State on July 7, 2019, where Nigeria signed.
The premise of the free trade area is that all participating countries would remove barriers of tariffs and quotas for products and services made in their countries of origin. Shoes from Aba should now move freely from Cape to Cairo, Nairobi to Niamey.
Make no mistake about it. AfCFTA is not only about big companies or what we know as the organised private sector. AfCFTA is about every business in Nigeria that seeks the potential of a bigger market. It opens the doors to legitimate exports from Nigeria to other African countries and for imports from those countries to Nigeria.
Nigerian entrepreneurs are ahead of AfCFTA in many years of trade and enterprise across Africa. They quickly went into South Africa at the collapse of apartheid. They are in all the countries of West Africa and pulling their weight in Nairobi and other capitals of East Africa. The requirement now is that they do so following all the appropriate channels.
AfCFTA will bring opportunities as well as significant challenges. Nigerian business would have to organise very well and synergise with the government to ensure that we derive the most benefits from this free trade area. One of the issues would be perception management.
Nigerian business must work collectively with all stakeholders and interest groups in the country to manage and improve the reputation of our country. All parties must be involved. In its early days, the Ministry of International Trade and Industry (MITI) coordinated Japan’s foray into the export market. It ensured that firms met global standards and best practice and avoided short cuts that yielded only fleeting benefits. Soon enough, the world associated Japan with quality and nothing less.
Nigeria needs to deploy all its resources. While manufacturers, agriculturalists and others are working on their products, we should use cultural communication to sell the country as a place and people with high capability and quality orientation. We need Nollywood, our music, our fashion and our cuisine working in synergy with other entrepreneurs to market Nigeria.
Nigerian firms need more than ever before to build strong brands. Strong brands start with the product or service itself and then extends to the augmented product that is a function of creativity in creating and depositing positive impressions about it in the minds of target audiences. It covers processes, procedures, packaging, relationships and everything that goes into making the product appeal.
It is crucial for Nigerian entrepreneurs to avoid messing around with AfCFTA as we did with AGOA. Nigeria was one of the countries that could not take advantage of the African Growth and Opportunity Act of the Bill Clinton era to export to America in large numbers. We did not pay attention to standards, to proper packaging and the procedures and rules of international marketing.
Enlightenment is critical. We have all the necessary bureaucratic organs, from the Nigerian Export Promotion Council through NAFDAC and the Standards Organisation of Nigeria to the Office of Trade Negotiation. They must rise to the challenge of AfCFTA. Commence with a programme of Communication, Education and Information that prepares our people and associations to the challenge and opportunity.