AfCFTA: Structural changes, much more than tariff reduction, needed for Nigeria to partake gainfully, stakeholders urge

“Despite the challenges of the past, the future of manufacturing in Nigeria looks bright. The coming into force of the AfCFTA opens the wider African market for Nigerian manufacturer. The preferences that AfCFTA offers can make Nigerian manufactured goods more competitive in many African markets and can also make it possible for integration into regional and global supply chains, going by the optimism of Professor Okey Aramah, president of the African Export and Import Bank (Afreximbank).

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“Despite the challenges of the past, the future of manufacturing in Nigeria looks bright. The coming into force of the AfCFTA opens the wider African market for Nigerian manufacturer. The preferences that AfCFTA offers can make Nigerian manufactured goods more competitive in many African markets and can also make it possible for integration into regional and global supply chains, going by the optimism of Professor Okey Aramah, president of the African Export and Import Bank (Afreximbank).

“The rising middle class in Nigeria and Africa and the rapid urbanization will expand demand for manufactured goods. Related to this is the gradual exit of China from labour intensive light manufacturing. As China shifts to more capital-intensive manufacturing due to rising labour costs, those goods have to be supplied by somebody. Nigeria, and indeed the entire African continent will have themselves to blame if this projected supply gap is filled from outside the continent,” the Afreximbank boss explains.

However, operators and other stakeholders in the Nigerian manufacturing sector argued that the country required investment friendly policies and addressing structural challenges that held the sector down for it to thrive under the competitive AfCFTA, as Dike Onwuamaeze reports in ThisDay newspaper.

Mansur Ahmed, president of the Manufacturing Association of Nigeria (MAN), agrees with Oramah that AfCFTA offered Nigeria’s manufacturing sector a chance to thrive. Ahmed hinged this hope on backward integration and value chain addition that would link the SMEs to the big manufacturing concerns in the continent and enable Nigerian manufacturers to use local inputs to improve our cost structure and competitiveness. This will benefit both the SMEs and the larger manufacturers.

He said: “The AfCFTA will build our capacity to manufacture and change the narrative of African economy and give Africa a stronger voice and positioning in the global economy as we go on.

 “But, are we ready to do the things we have to do to address the possibilities of dumping? “The dumping issue frankly is a matter of political will. Do our governments and political leaders have the political will to agree on those things that we have to do to ensure that we do not allow dumping to take place?” Ahmed asked.

In its report, the Nigerian Economic Summit Group (NESG) stated that for the Nigerian industrial sectors to benefit from AfCFTA, it would require more than tariff reduction and/or elimination. It requires providing effective supportive economic structure to fairly partake in the gains.”

The NESG’s report concluded by stating that removal of tariffs would have insignificant effect on Nigeria’s industrial sector because Africa accounted for a relatively small fraction of Nigeria’s overall external trade.

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