FEC Approves Agreement On African Free Trade
Nigeria is set to sign the framework agreement for the establishment of African Continental Free Trade Area (AfCFTA).
The Federal Executive Council (FEC) gave the approval on Wednesday during the weekly meeting chaired by the Vice President, Professor Yemi Osinbajo, at the State House in Abuja.
Consequently, Nigeria is expected to seal the agreement during the Extraordinary Meeting of African Union Heads of State and Government to be held on March 21, 2018, in Kigali, Rwanda.
The Presidency revealed the new development in a statement from the Office of the Special Adviser to the President on Media and Publicity.
Read the background and what the country stands to gain below:
Fact Sheet On The African Continental Free Trade Area (AfCFTA) And Benefits For Nigeria
Benefits For Nigeria: the gains are significant. The AfCFTA would:
- Expand market access for Nigeria’s exporters of goods and services, spur growth and boost job creation.
- Eliminate barriers against Nigeria’s products and provide a Dispute Settlement Mechanism for stopping the hostile and discriminatory treatment directed against Nigerian natural and corporate business persons in other African countries.
- Establish rules-based trade governance in intra-African trade to invoke trade remedies, such as safeguards, anti-dumping, and countervailing duties against unfair trade practices, including dumping, trans-shipment of concealed origin of products.
- Support the industrial policy of Nigeria through the negotiated and agreed “Exclusion and Sensitive category lists” to provide space for Nigeria’s infant industries.
- Improve competitiveness, the enabling environment for business, consolidate and expand Nigeria’s position as the number 1 economy in Africa.
- Stimulate, specifically, an estimated 8.18 percent increase in Nigeria’s total exports, with a small structural shift in Nigeria’s economy towards manufacturing and services. This is expected to lead to a total increase in Nigerian economic welfare by 0.62% – equivalent to around US$2.9 billion in 2018 terms. Changes would result from tariff reduction, ease of doing business and, trade facilitation.
- Provide a platform for Small and Medium Enterprises (SMEs) integration into the regional economy and accelerate women’s empowerment.
- Provide an expanded platform for Nigerian manufacturers and service providers for connection to regional and continental value chains.
- Benefits For Africa, the benefits are considerable. The AfCFTA would:
- Cover a market of 1.2 billion Africans with a combined GDP of US$2.5 trillion.
- The AfCFTA is expected to increase intra-African trade by up to 52.3%.
- Enable all AU countries to share in the welfare gains, which are estimated at around 2.64% of continental GDP – roughly $65 billion in 2018 terms.
- Increase real wages for unskilled workers in the agricultural and non-agricultural sectors, as well as for skilled workers, with a small shift in employment expected from agricultural to non-agricultural sectors.
- Be accompanied by additional dynamic benefits, notably, export diversification, durable sustained growth, an enlarged regional market that better attracts FDI, with wider economic space for industrialization and catalytic effects for structural transformation.
- Expand the size of Africa’s economy to US$29 trillion by 2050, as estimated by the United Nations Economic Commission for Africa.