How to make AfCTA work better – LCCI President

The President, Lagos Chamber of Commerce and Industry, Asiwaju (Dr.) Michael Olawale-Cole has offered useful information on how to make the African Continental Free Trade Area (AfCTA) work properly. The LCCI President made this known while delivering his opening remarks at the Export Group Symposium themed, “AfCTA: Nigeria’s Preparedness and the Role of Logistics in its Successful Implementation”, held in Lagos. (Dr.) Michael Olawale-Cole, who was chief host at the occasion, stressed the importance of exports to the business community and the nation’s economy, saying that one of the goals of the LCCI is to promote trade and boost exports, which would invariably open new vistas for Nigerian businesses.

According to him, there are several programmes and opportunities at the regional, continental and international levels that exporters can tap from to their advantage. For instance, the African Growth and Opportunity Act (AGOA), a United States Trade Act, was enacted on May 18, 2000 as Public Law 106 of the 200th Congress, is one, which has since been renewed to 2025. The legislation significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries while the Trade Liberalisation Scheme (ETLS) is a trade instrument designed by the Economic Community of West African States (ECOWAS) that allows unhindered market access to 15 member countries by promoting economic relations within the sub-region.

“Launched in 2021, is the African Continental Free Trade Area (AfCFTA), a flagship project of the African Union’s Agenda 2063, a blueprint for attaining inclusive and sustainable development across the continent over the next 50 years. It aims to boost intra-African trade by providing a comprehensive and mutually-beneficial trade agreement among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy. The Pan-African Payments and Settlement System (PAPSS) is a centralised payment and settlement infrastructure for intra-African trade and commerce payments. This project, which is being developed in collaboration with the African Export-Import Bank (AFREXIM Bank), will facilitate payments as well as formalise some of the unrecorded trade due to the prevalence of informal cross-border trade in Africa”, Dr. Olawale-Cole added.

The LCCI President observed that exporting of primary products to the global community without value addition, through processing, would not generate the desired amount of foreign exchange because Nigeria’s non-oil export sector is dominated by raw materials and primary products such as cocoa, cashew, and leather exports, saying “We could generate more foreign exchange earnings if these primary products are processed into finished goods for the international markets. The potentials of non-oil exports are largely untapped due to over dependence on crude oil exports”. Quoting the International Logistic Performance Index, which was last published by the World Bank Group in 2018 that ranked Nigeria at 113 out of 140 countries assessed, showed that Nigeria still has a long way to go as its performance in different aspects of logistics is just average, at best. With the AfCFTA coming on board and the significant opportunities it presents for various sectors, especially for Small and Medium Enterprises (SMEs), it is paramount that the nation revolutionises its logistics sector, which can be either a huge impediment or enabler to trade and to maximise the benefits of the trade deal, logistical challenges must be tackled, as a matter of urgency.

Dr. Olawale-Cole, a recipient of the national honours of Commander of the Order of the Niger (CON) award, advised the government to help in quality profiling of the export-ready goods, packaging, and ports logistics for several exporters or potential exporters are not able to pull through the procedures for exporting from Nigeria for “We need a one-stop-shop mechanism to drive export logistics and documentation. The regulatory agencies must strengthen the means of communication to close the information gap between the agencies and players. There should also be incorporation in the communication plan and strategy, mechanism for feedback and continuous interactions. The existing feedback platforms are not as responsive as required”. He stated further that the country needs to promote digitisation and automation of processes and procedures to reduce the level of manual and paper works. The LCCI President highlighted the importance of improving on the export of other products beyond agricultural products by looking at textiles, solid minerals, and creative arts, among others.

On what to do to explore opportunities of the AfCFTA, Dr. Olawale-Cole believed that “We must create more awareness; build capacity of the public sector trade regulators like the Nigerian Customs Service, the Federal Ministry of Finance and National Planning, the Federal Ministry of Industry Trade and Investment, Nigerian Export Promotion Council, the Nigerian Investment Promotion Commission, and the National Office for Trade Negotiation, and the AfCFTA Country Office on how to facilitate trade to take advantage of the AfCFTA. They should not only focus on their revenue mandate, but facilitate trade that will bring in revenue; and that the government must continue to focus on empowering the non-oil sector to be more productive and competitive through special interventions in areas of financing and provision of infrastructure while the Public-Private Partnership (PPP) model can be explored to cater for needed infrastructure.

“I will close my remarks with the good news on our improved non-oil exports as revealed by the Nigerian Export Promotion Council (NEPC) in its First Half Year Progress Report 2022 presentation. According to the report, the total value of non-oil exports in the first half of the year (January – June 2022) was about $2.60 billion, up 62.37 per cent from the respective $1.60 billion and $981.44 million recorded in the first halves of 2021 and 2020. This rebound should be sustained through more incentives to exporters and targeted financing for export infrastructure. The Export4Survival campaign by the NEPC introduced in February, should be sustained to raise public knowledge on opportunities in the industry and to emphasise the advantages of exporting Nigerian goods and services to boost our GDP and shared prosperity”, the LCCI President said.

On her part, the Chairman, Export Group of LCCI, Mrs. Bosun Solarin, admitted that the symposium was timely and coming up when Nigeria was in dire need of foreign exchange, and that the world was earnestly waiting to see the effective take-off of AfCFTA that is capable of elevating 30 million people out of abject poverty and generating market hub that would connect 1.3 billion people from 55 countries with US$3.4tn aggregate Gross Domestic Product (GDP). She said the actualisation of the benefits of the legislation remains elusive without effective distribution channel in which logistics play an indispensable role of bridging the gap between the dreams and realities of AfCFTA. Mrs. Solarin informed that the presence of experts in the logistics industry, and captains of export business would make it possible do a critical examination of the role of logistics in AfCFTA from trajectories with insightful contributions for all participants while reiterating the fact that reliable transportation was critical to trade and development, as she tasked relevant stakeholders to put in place policies that would make Nigeria’s export highly competitive.