Nigeria has long been a fixture in the African Continental Free Trade Area agreement but hesitated at signing the agreement at first drop. Once it did, the country dragged its foot on being among the first countries to take part in the pilot in 2022. Two years on, National Coordinator of the Nigeria office of AfCFTA, Olusegun Awolowo, says the country’s hesitation was purely foreconomic reasons, citing concern for how it could affect local industries. He tells The Commerce Africa caution was necessary to ensure the agreement does not turn sour for Nigeria.
What, in your opinion, was responsible for the initial reluctance of Nigeria to sign the Agreement?
Nigeria’s hesitation stemmed from a deep concern for the potential impact of the AfCFTA on our local industries. There was a genuine concern that opening our borders to such a large continental free trade area could expose our markets to unfair competition, particularly from countries with stronger manufacturing bases. The government wanted to ensure that adequate safeguards were in place to protect our local industries and to avoid becoming a dumping ground for substandard goods. This caution was necessary to ensure that the agreement would benefit Nigeria in the long run.
How come Nigeria could not make it into the list of the first set of countries that took part in the Guided Trade Initiative in 2022?
The Guided Trade Initiative was a pilot phase designed to test the operational readiness of the AfCFTA framework. Nigeria’s exclusion was not due to a lack of interest or readiness but rather a strategic decision to observe and learn from the initial participants. It allowed us to assess the challenges and opportunities faced by other nations, which in turn informed our strategies for a more effective engagement. Our focus was on ensuring that when Nigeria participates, we do so with a robust framework that maximizes our gains.
Would it be correct to say that the foot-dragging that characterized Nigeria’s signing of the AfCFTA Agreement was simply political rather than an effort to safeguard the country from becoming a dumping ground?
While political considerations always play a role in international agreements, the primary concern was indeed economic. The Nigerian government was particularly cautious about the potential risks to our local industries. The delay allowed us to conduct a thorough impact assessment, which led to the establishment of the National Action Committee on AfCFTA which the President recently approved to become the Nigeria AfCFTA Coordination Office with more powers on all AfCFTA-related matters. This ensured that when Nigeria eventually signed, we did so with a clear understanding of how to safeguard our economic interests.
Given your years of experience at the Nigerian Export Promotion Council, do you consider that Nigerian businesses are truly positioned to appropriate the immense benefits of AfCFTA?
Nigerian businesses have enormous potential, but there is still work to be done. While some sectors are well-prepared, others need to improve in areas such as product quality, packaging, and market access. The AfCFTA offers a significant opportunity for Nigerian businesses to expand their reach across the continent. However, this will require continuous capacity building, infrastructure improvements, and a strong commitment to quality standards. My experience at NEPC has shown me that with the right support, Nigerian businesses can compete favourably on the continental stage.
Did you conceive the Zero Oil Plan with the goal of AfCFTA in mind?
The Zero Oil Plan was indeed conceived with broader economic diversification goals in mind, which align perfectly with the objectives of the AfCFTA. The idea was to reduce Nigeria’s dependence on oil by boosting non-oil exports, thereby creating a more resilient economy. The AfCFTA provides a vast market for these non-oil products, making the Zero Oil Plan even more relevant. Our aim was to position Nigeria as a leading exporter of non-oil goods and services within Africa, leveraging the AfCFTA to achieve this goal.
Which products do you consider that Nigeria can now competitively market in AfCFTA?
Nigeria has several products that can compete favorably under the AfCFTA framework. These include agricultural products like cocoa, soyabeans, cashew nuts, and sesame seeds, which have long been staples of our non-oil export portfolio. Additionally, there is significant potential in manufactured goods such as textiles, leather products, and processed foods. The key is to ensure that these products meet international standards and are competitively priced. With the right support, these sectors can thrive on the continental market.
Does leather processing represent our competitive and comparative advantage? If not, which product would you have expected Nigerian entrepreneurs to focus on?
Leather processing does indeed represent a competitive advantage for Nigeria, given our abundant raw materials and a growing industry. Nigerian leather represents the first link in a value chain that ends up as finished products of the highest quality all over the world. This represents a major competitive advantage and has also an opportunity for us to promote Nigeria as a main source for quality leather, a fact that is not really promoted globally.
What programmes are you putting in place to address the digital divide and low digital literacy, given the importance of e-commerce in AfCFTA?
One of the adopted protocols under AfCFTA is called Digital Trade Protocol. The digital economy is crucial for the success of AfCFTA, and we are acutely aware of the challenges posed by the digital divide. To address this, we will be working closely with the Ministry of Communications, Innovation and Digital Economy as we continue to work towards expanding internet access across the country, especially in rural areas; programmes on digital literacy especially those targeted at women and girls; and, finally, on policies that support the growth of e-commerce. These efforts are aimed at ensuring that Nigerian entrepreneurs can fully participate in and benefit from the digital opportunities offered by AfCFTA.
How much success has ECOWAS achieved that Nigerians can leverage to make the most of AfCFTA?
ECOWAS has made significant strides in regional integration, particularly in the areas of free movement of goods and people, and the harmonization of trade policies. These successes provide a solid foundation for Nigeria’s participation in the AfCFTA. The lessons learned from ECOWAS, such as overcoming non-tariff barriers and fostering regional value chains, will be invaluable as we scale up to the continental level. Nigeria can leverage its experience in ECOWAS to navigate the challenges of AfCFTA more effectively.
Are there special incentives for Nigerian entrepreneurs to compete favourably and profitably in the Continental Market with the commencement of AfCFTA implementation?
Yes, there are several incentives in place. We will be collaborating with all relevant stakeholders on reducing the cost of doing business by improving infrastructure, streamlining regulatory processes, and enhancing access to finance. Additionally, we are providing training and capacity-building programmes to help businesses understand the requirements of the AfCFTA and how to take advantage of the opportunities it presents. These measures are designed to ensure that Nigerian entrepreneurs can compete effectively in the continental market.
Do you consider the slogan “We must grow what we eat and eat what we grow” to be antithetical to your position that maintains that export is key to sustainable prosperity?
Not at all. The slogan emphasizes self-sufficiency in food production, which is a critical aspect of economic sustainability. However, it does not negate the importance of exports. In fact, growing what we eat and eating what we grow should go hand in hand with producing excess for export. By focusing on both domestic consumption and exports, we can create a balanced and resilient economy. Exporting surplus agricultural products, for example, not only generates foreign exchange but also provides an incentive for increased production, which benefits both the domestic and international markets.
