Nigeria is setting up a committee to implement the African Continental Free Trade Agreement (AfCFTA). After showing initial resistance for being a part of the bloc mainly due to pressure from domestic industry, Nigeria is now planning to go all on a hog to be a major stakeholder in the grouping, which has come into being on July 7. To facilitate that process, the oil rich country is also contemplating change in laws and enacting new ones to align the economy organically with the new grouping.
The proposed committee to align with AfCFTA will consist of government agencies and private sector groups to implement the trade agreement. Nigerian President Muhammadu Buhari is committed to take such measures in a time bound manner , particularly for boosting domestic capacities. One of the apprehensions of the local business community was heavy dumping by neighboring countries into its market taking advantage of the high focus on promoting intra-trade. It may be noted that tariffs on 90% of the goods and services would be brought down in the first leg of the grouping to promote intra-trade, from the present level of below 30% to over 50% in a short time frame. Some of the steps contemplated by the Nigerian Administration to counter dumping by neighboring countries are fast-tracking domestic work, enhancing productivity, shoring up competitiveness and facilitating exports. In the first phase, the trade bloc will establish a protocol for trade in goods and services and dispute settlement rules. In the second, the group will take up competition, investment and intellectual property rights, with negotiations.
The oil rich Nigeria may have an advantage in terms of cross-border movement of people in search of works. Nigerian wage level is overheated both in the rural and urban centers. Movement of people from other African countries is likely to cool the wage rates. This will bring down the cost of production to help the country to compete with neighboring low cost countries. But the pertinent point is how far the trade unions in Nigeria would react against such movement of people.
