Despite Nigeria’s comparative advantage and self-sufficiency status in the production of certain products, cement, flour, rice, sugar and 180 other products would not be liberalised under the African Continental Free Trade Area (AfCFTA), even though doing otherwise would help the country tame its rising inflation, The Guardian learnt.
Sources familiar with the tariff lines in the schedule submitted to ECOWAS by Nigeria for negotiation told The Guardian that, while 131 products are already on the import prohibition list, the remaining products on the exclusive list were picked based on national priorities, trade volume, priority, food security and competitive advantage.
While negotiations have almost been concluded on sugar exclusion, semi-milled or wholly milled rice, whether or not polished or glazed, flour (meal and powder), cocoyam flour and cement are products being protected by the country under the trade deal.
The Guardian learnt that a complete list of the tariff lines is expected to be released before the end of the month after consideration from the Tariff Technical Committee.
Though the commencement of the AfCFTA portends advantages to Nigeria’s trade balance as it opens a wider market space for the country’s exports and opportunity to get cheaper imports of goods and services, its protectionist stance on some commodities that the nation’s local capacity cannot be met, raises concerns.
Presently, only seven per cent of sensitive products (427 tariff lines) and three per cent (184 tariff lines) of exclusive products were negotiated rather than the other way. This puts over 4,300 tariff lines under the liberalised list.
With concerns about the country’s readiness for the trade deal, stakeholders are already trading blames on how to remove the obstacles, especially as it relates to implementation, rules of origin, tariff lines and future negotiations.
Local manufacturers are already worried, noting that Nigeria was not in position to benefit from the various opportunities due to poor trade infrastructure; hostile trade environment, especially among Nigeria’s neighbouring countries; high level of trade malpractices; and limited trade capacity fuelled by supply constraints, among other things.
Already, there are concerns about Nigeria’s readiness to implement the AfCFTA, considering the `disconnect between implementation and negotiations, as well as intense lobbying by different groups for the position of the office of the DG/Chief Trade Negotiator after the passing of Ambassador Chiedu Osakwe.
Local producers had raised concerns about the use of frequency of the choice of member-state as major criteria to select tariff lines that will go into Exclusion, Sensitive and Liberalized baskets, not minding the economic size, the magnitude of market and industrialisation capacity of member-states, is a concern that Nigeria has to live with.
According to them, liberalisation should be in phases to support the local industry that is already undermined by lingering challenges.
A stakeholder familiar with the negotiations expressed worry about abuse of rules of origin, especially by Nigeria’s neighbours.
The primary goal of rules of origin is to prevent trans-shipment – that is, goods from a non-preferential country being imported at preferential rates of duty.
But Nigeria’s Acting Chief Trade Negotiator, Victor Liman, told The Guardian that the country had negotiated up to 81 per cent on Rules of Origin.
“What we have agreed under the RoO is to encourage industrialisation and ensure that we boost intra-African trade as well as prevent third countries from interfering and manipulating the rules. Goods that are not produced in the country of origin would not qualify under preferential tariff treatment. The issue of value addition also has to be substantially improved. I think we should be more patient and some of the issues would be clarified soon,” he said.
The Federal Government had set up the National Action Committee (NAC) in December 2019 to guide Ministries, Departments and Agencies (MDAs) and the organised private sector on AfCFTA implementation. However, stakeholders, including the Customs Service, continue to await guidelines for trade deal implementation.
Indeed, separating the implementation of the AfCFTA among entities and from the NOTN may have stalled the trade deal locally, considering that after the agreement is concluded and negotiated, there is a lot of adjustment before implementation is done.
-THE GUARDIAN (NG)