President Buhari Must Consider MAN Position on ACFTA, Fixing “Rule of Origin” Prerequisite for Nigeria

President Buhari Must Consider MAN Position on ACFTA, Fixing “Rule of Origin” Prerequisite for Nigeria

President Trump has waged trade wars with China, Mexico, and Canada. His mission: protect the American people economically. Nigerian government has refused to join the African Continental Free Trade Agreement (ACFTA) because most manufacturers in Nigeria hate the agreement. For them, with Nigeria’s lack of infrastructural competitiveness, opening the market to Rwanda, Ghana, etc will destroy manufacturing.

Yes, the opportunity is asymmetric: I am not sure what most Nigerian producers will benefit from shipping to Botswana. But Botswana producers will surely benefit from having access to Nigerian market at largely zero tariff.

I have made my opinion on ACFTA known: “Nigeria should SIGN but must make sure the “rule of origin” clause is strong. We cannot afford goods produced outside Africa to be repackaged in a treaty member state and then shipped to Nigeria at a low tariff that is exclusive to member states.”

The position of MAN (Manufacturers Association of Nigeria) should be considered but it would hurt Nigeria if the country isolates itself in the era when Africa is looking for ways to integrate. As I noted in an African Union Congress lead paper, prior convergence of regional integration must happen first before the continental level integration. If we do not have such a strategy, we would open countries to trade shocks which would result to welfare loses. As MAN noted, no one consulted them because this was not started at the regional level, but at the continental level making it harder for stakeholders to model the impacts. With that kind of change, chaos arises in mainly heterogeneous markets.

Yes, Nigeria should sign only if Morocco and some other countries first un-ratify or update some treaties with Europe. If not, European companies will move factories to Morocco (not Nigeria) and then flood products into Nigeria at low tariff used by member states. If you take away those duties, Nigeria’s economy will struggle and welfare losses will skyrocket. Today, Nigerian Customs generates N5.5 billion (about $17 million) daily. No one wants that revenue to disappear.

The Nigeria Customs Service said on Thursday in Lagos that, its revenue generation has increased to the region of N5.5 billion daily.

The Comptroller-General, Col. Hameed Ali (rtd) made this known during a working visit to the headquarters of the National Association of Government Approved Freight Forwarders in Lagos.

Mr. President, do not allow anyone to bully you into signing ACFTA. After all, you are a General and understand how to manage battalions. Nigeria cannot just disarm and put our people into economic paralyses. You must ask them to strengthen “Rule of Origin” clause or give Nigeria 24/7 electricity before you put that pencil on ACFTA. Yet, we cannot afford to be isolated from Africa. That means, Nigeria must also push for ACFTA to fix whatever it thinks that must be fixed.

Our President Should Sign AfCFTA Free Trade after Strengthening “Rule of Origin” Clause

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4 thoughts on “President Buhari Must Consider MAN Position on ACFTA, Fixing “Rule of Origin” Prerequisite for Nigeria

  1. I don’t usually comment on post because I see a lot of uninformed people parading ignorance. I was shocked when I heard OBJ also lambasting Buhari for not signing this agreement. I live in Rwanda, and I can tell you first hand cost of labor is low and there is no market. Imagine if Nigeria signs the agreement, all products at low costs will find there way to Nigerian market and because of Nigerian poor internal structures and regulations, local manufacturers will suffer. OBJ did not consider this but going about condemning Buhari not signing.
    You have also raised a germane point about “rule of origin”. Critical assessment should be made, not just signing an agreement blindly. Nigerians will suffer for it.

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