The Nigerian Economy Summit Group has said that the implementation of the African Continental Free Trade Agreement will have negative impact on the Nigerian economy.
It said that relying on the inflow of foreign savings to grow the economy would not readily pay off at a time when the economy was not yet competitive.
The Federal Government had expressed its readiness to sign the agreement following wide consultations with stakeholders by the technical committee set up to determine the impact of the agreement on the economy.
Based on projections by the United Nations Economic Commission for Africa, the AfCFTA is expected to boost intra-African trade by between $50bn to $70bn in monetary terms, with a 40 per cent to 50 per cent increase over the first 20 years of its implementation
A study conducted by the NESG recommended that the government should embark on massive infrastructure upgrade and institutional reforms to improve the business environment.
The infrastructure upgrade, the report noted, could be realised through the concession of major infrastructural projects to the private sector such as electricity, roads, bridges, airports, and seaports among others
The group in the report which was made available to our correspondent on Monday said that the concessions must, however, be complemented by strong institutional reforms to effectively regulate the operations of the private sector.
It said producing highly competitive products in the foreign market also required strengthening government regulations and internal quality control of products produced in the country.
The NESG stated that the Standards Organisation of Nigeria and the Nigerian Agency for Food and Drug Administration and Control had a crucial role to play in the quality control of products produced in the country.
The report explained that these regulatory institutions must be reformed to effectively perform their constitutional regulatory functions.
It said, “Nigeria needs to maximise the opportunities that are available to it in the AfCFTA agreement by enhancing the space for both domestic and foreign investments.
“Thus, there is the need to create a more business-friendly environment and reduce existing binding trade constraints in the country that has so far deterred the growth of foreign investment in different sectors of the economy.
“In addition to providing a reliable transportation system and power supply, the country can restore a business-friendly environment by substantially addressing all major security challenges that have in recent times inundated the country and discouraged foreign investors from doing business in Nigeria.
“There is a need for measures to counter the expected negative impact of AfCFTA on government revenue.
“The recommended policy measure here is to combine trade liberalisation with increased drive for the inflow of foreign saving/investment into the Nigerian economy.
“The government can complement this with a programme of diversification of the Nigerian economy.”
If successfully pursued, the group said in the report that diversification of the Nigerian economy will, in turn, boost the tax revenue base of the Federal Government.
