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<\/p>\nWhen Africa\u2019s free trade area launches on 7 July, a key player will be missing. However, Victor Adetula, head of research at Nordic Africa Institute (NAI) in Sweden, predicts that Africa\u2019s largest economy, Nigeria, will gradually open up and join the project.<\/p>\n
The African Continental Free Trade Area (AfCFTA) is meant to create a tariff-free continent that can grow local businesses, boost intra-African trade and create jobs. The AfCFTA initially requires members to remove tariffs from 90 percent of items, allowing free access to commodities and services across the continent.<\/p>\n
When the agreement\u2019s operational phase is launched on 7 July at an African Union summit in Niger, 52 of the continent\u2019s 55 countries will be on board. Only Benin, Eritrea and Nigeria have yet to join the project. Nigeria is Africa\u2019s largest economy, making it the most notable non-signatory to the AfCFTA deal.<\/p>\n
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\u201cIf Nigeria is not playing along, it is going to affect the progress of the free trade area. Nigeria is needed\u201d, says Adetula, who is himself Nigerian.<\/p>\n
Nigerian government representatives have claimed they need to consult with domestic economic stakeholders before making a decision. The president of Nigeria\u2019s largest labour union Nigeria Labour Congress, Ayuba Wabba, has described the AfCFTA as \u201can extremely dangerous and radioactive neo-liberal policy initiative\u2026 that seeks to open our seaports, airports and other businesses to unbridled foreign interference never before witnessed in the history of the country\u201d.<\/p>\n
Adetula says that while Nigeria and the whole continent are likely to gain from the creation of the free trade area, some of the country\u2019s nascent industries could be damaged as European, Asian and US products enter the market through other arrangements, such as the Economic Partnership Agreement (EPA) between the European Union (EU) and the Economic Community of West African States (ECOWAS).<\/p>\n
Victor Adetula. Credit: Mattias Sk\u00f6ld<\/p>\n
\u201cAfrica\u2019s industries can\u2019t compete with Europe\u2019s. For instance, virtually all the industries are small, and generally vulnerable. Africa\u2019s comparative advantage is still in the production of primary resources, not in manufacturing goods\u201d, Adetula says.<\/p>\n
\u201cIf their industries are not well protected and secured against all unregulated external influence and risks, uncontrolled trade liberalisation by the African countries will merely open their markets for others to take advantage of. It will kill rather than stimulate industrialisation in Africa. Look at what happened to the textile industry, for example \u2013 it is almost dead in African countries due to globalisation.\u201d<\/p>\n
Adetula says that while some might argue that Nigeria\u2019s position amounts to nothing but protectionism, African countries have good reason to be careful and protective of their economies. He points out that even the EU countries are operating with certain degrees of guarantees of protection for their local industries as part of their national interests.<\/p>\n
\u201cIs there any country that is not protecting its own industry? There is none!\u201d<\/p>\n
Adetula says that Nigeria\u2019s position can partially be explained by history. Since the 1960s, the West African nation has always acted carefully before entering regional cooperation deals.<\/p>\n
\u201cNigeria is already operating a trade liberalisation policy within the framework of the ECOWAS Trade Liberalisation Scheme. Already there are concerns within the ECOWAS region and other similar sub-regional integration arrangements that the EU-led EPA will result in multiple trade liberalisation schemes on the continent.<\/p>\n
The AfCFTA will likely introduce a new trade liberalisation arrangement. Managing multiple trade liberalisation schemes requires that Nigeria be more careful\u201d, Adetula says.<\/p>\n
Another concern is about the structure of the economies of African countries. Take, for instance, the structure of their industrial sectors. They do not complement one another perfectly to enhance complementary cooperation between industries on the continent, according to Adetula.<\/p>\n
\u201cAlso, if you consider the structure of African trade, many countries are producing the same items. So, how then are they going to trade and with what products? It is not just \u2018Let there be trade and there will be trade\u2019 \u2013 what do you trade in? How industry and trade are integrated with each other is a question that needs to be addressed.\u201d<\/p>\n
Adetula takes the case of West Africa.<\/p>\n
\u201cNigeria is producing cocoa, Ghana is producing cocoa, C\u00f4te d\u2019Ivoire is producing cocoa \u2013 so who is going to trade with what?\u201d Adetula says it is a positive indicator of global development when the right of a country to say yes or no to a proposal for international cooperation is respected.<\/p>\n
\u201cFor example, Sweden is a member of the EU but does not subscribe to the common European currency. Similarly, Nigeria might find it favourable to join some parts of the AfCFTA but not others. It is a possibility.\u201d<\/p>\n
Adetula predicts that Nigeria will opt to become a member of the free trade area through a gradual transition process.<\/p>\n
He compares the situation with the development of the EU, which started with a small group of countries, with UK joining in 1973 and eastern European countries much later.<\/p>\n
\u201cNigeria\u2019s position is not a definite \u2018no\u2019, but Nigeria will not be rushed by anyone. Generally, Nigeria\u2019s policy on external trade can promote international trade and development while supporting regional initiatives towards increased intra-African trade.<\/p>\n
Nigeria has persistently cautioned against rushing the agenda of the AfCFTA without extensive consultation with all the stakeholders. Nigeria needs to take into consideration some peculiarities of its political economy, as well as some lessons learned from the EU\u2019s recent experience.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
When Africa\u2019s free trade area launches on 7 July, a key player will be missing. However, Victor Adetula, head of research at Nordic Africa Institute (NAI) in Sweden, predicts that Africa\u2019s largest economy, Nigeria, will gradually open up and join the project. The African Continental Free Trade Area (AfCFTA) is meant to create a tariff-free […]<\/p>\n","protected":false},"author":62,"featured_media":12411,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,19],"tags":[730,731,219,725],"class_list":["post-12410","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-beyond-the-news","tag-afcfta","tag-african-union","tag-labour","tag-trade"],"yoast_head":"\n