IEOM Position on African Continental Free Trade Area Agreement

11 Jul 2018



The African Continental Free Trade Area (AfCFTA) has been conceived as a project to instigate more trade between African nations. As a concept, this is long overdue both in theory and in practice. Against a backdrop of slow economic growth at best and the near-constant threat of economic recession in a large number of African nations, the AfCFTA agreement could not come at a better time.

Interestingly, Nigeria which had the honor of leading the negotiations abstained from signing the Kigali declaration which was signed by 44 other African nations. Naturally, this raised eyebrows and concerns among stakeholders, being that Nigeria is also Africa’s largest economy and along with South Africa, our participation is a major key to making the AfCFTA work for all African nations.

Historical Background

Nigeria is no stranger to signing free trade agreements and related bilateral agreements and in all honesty, the nation is yet to reap any meaningful benefits from these agreements (or at least, not on the scale originally promised). We believe this backdrop informed the creation of the NOTN by the current administration of President Muhammadu Buhari and the appointment of a Chief trade negotiator.  This move can only be a plus for the nation as we seek to extract more value from our future trade agreements going forward.

Within the current context, we can say that the negotiations leading up to the final CFTA agreement is a direct benefit to Nigeria of this initiative by Mr. President.

On the issue of African trade, it’s been estimated by the World Bank and other institutions that trade between African nations equates to less than 10% of the overall trade of African nations. Driving up this value has been a pre-occupation of African governments over the years and several frameworks have been put in place – ranging from individual nation agreements, through regional free trade agreements and economic areas such as ECOWAS, SADC among others.

In spite of all these, the need for continent-wide trade collaboration has only been accentuated and with the coming into existence of AfCFTA, it is hoped that the issues hindering true, viable trade between African nations can be met headlong and addressed.

How this Issue Affects IEOM

The Institute of Export Operations & Management (IEOM) is a Trade & Investment Support Institution (TISI) created specifically for the purpose of training and supporting exporters with best practice advice, research and training as well as market access. We count among our strategic partners such eminent organizations as the Nigeria Export Promotion Council (NEPC), the International Trade Center (ITC, Switzerland), International Institute for Tropical Agriculture (IITA)  among  others including institutions of higher learning, government agencies, co-operatives, non-governmental organizations and state  governments, among others including state governments. The institute prides itself as the foremost provider of export training in Nigeria.

Essentially, the IEOM as an institution is set up to encourage international trade, while promoting adherence to best practices and standards. It is therefore imperative that the IEOM adds its voice to this conversation on trade in Africa.

Stakeholders Present Real Issues

Real issues have been raised by the different stakeholders in Nigeria including the manufacturers association of Nigeria, Nigeria Labor Congress among others. These issues largely center on infrastructure, antidumping and rules of origin.

In all, the overwhelming view however is that the AfCFTA is a good thing and capable of creating the kind of international business environment that Africa needs to truly claim its place as a major investment destination, globally.

IEOM POSITION: A Strong Catalyst for Job Creation, Innovation and Development

In light of President Buhari’s recent pronouncement that Nigeria will sign the AfCFTA agreement, IEOM wholeheartedly welcomes Nigeria’s full participation in the African CFTA and views the agreement as a catalyst for job creation, innovation and infrastructure development.

A free trade area like this one has the ability to spur competition between African nations and this can only be a good thing. Nigerians are known for entrepreneurship and our enterprising attitude and this is challenge that Nigerians as a people are prepared to overcome. Albeit, the Nigerian spirit will not prevail if government does not proactively play its role.

The truth is that current state of infrastructure in Nigeria does not support the concept of a continent-wide free trade area, rather it puts us at a disadvantage compared to smaller countries like Kenya, Rwanda and South Africa. This is not a reason however to run away from the challenge(s) presented by AfCFTA.

IEOM rather views this as a strong argument for investing massively in the country’s infrastructure in a holistic manner as this will drive investment, job creation and most importantly, innovation.

To truly harness this however, market access information is absolutely necessary. Providing information to stakeholders on market access, standards and best practices is a key path to achieving the benefits of AfCFTA for Nigeria. The relevant government agencies must as a matter of urgency, partner with trade support organizations, co-operatives, SME groups and sector-specific business groups and associations to ensure market information is disseminated effectively. This is one of the core competencies of IEOM and we look forward to being an effective partner in the success of AfCFTA in Nigeria.