How imminent takeoff of AfCFTA pushed Nigeria to reopen borders

The imminent take off of the African Continental Free Trade Area (AfCFTA) Agreement was the major factor behind the decision by the Nigeria government to reopen some of the country’s land borders.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, confirmed this in a statement on Friday by her special adviser on media and communications, Yunusa Tanko.

AfCFTA is scheduled to commence on January 1, 2021.

The Federal Executive Council (FEC) last month approved the ratification of the AfCFTA agreement, ending years of seeming dithering by Africa’s largest economy on the issue.

Mrs Ahmed said the Presidential Inter-Ministerial Committee on border closure, which she chairs, recommended the reopening of the borders so as to remove all obstacles to free movement of goods across the continent as enunciated by AfCFTA.

“There’s a need for Nigeria as members of the ECOWAS Trade Liberalisation Scheme and signatory to the recently signed African Continental Free Trade Area (AfCFTA) agreement to dismantle all barriers to ensure free movement of goods across the continent and work towards opening the land borders before the commencement of the treaty on 1st January, 2021,” she said, per the statement.

Mrs Ahmed noted that the closure of the borders had caused some Nigerian private sector businesses loss of market share.

She said dwindling capacity utilisation and high inventory of unsold manufactured goods, especially those with market base and significant presence in West Africa, had resulted in unemployment and poor credit rating.

“Nigeria as the most industrialised in the region is a leading member of ECOWAS Trade Liberalisation Scheme (ETLS) with registration of about 2,433 indigenous companies and about 6,973 products, estimated at about 65 percent of the total companies registered under the scheme, hence had unwittingly limited her market through the border closure,” the statement reads.

“Border closure and aftermath”

On August 20, last year, President Muhammadu Buhari ordered the closure of Nigerian land borders to curb smuggling and boost local production of agricultural commodities.

Mr Buhari said the partial border closure was necessitated by the increased smuggling activities, armed banditry, human trafficking, irregular migration, proliferation of small arms and light weapons, and other trans-border crimes.

The closure, according to the presidential committee, has considerably curtailed the activities of smugglers, irregular migrants and other forms of criminality.

“It has also made communities around the land and maritime border routes to be more aware of the overriding benefits of effective border control to economic development and national security, as well as the need to protect the country’s sovereignty,” the committee said.

The committee said the measure was not meant to create dissonance but to ensure more rational international trade relations and peaceful co-existence that would promote cooperation and integration amongst Economic Community of West African States (ECOWAS) member countries.

Ahead of reopening the borders, the committee said the government has put in place measures to check abuse of its efforts at enhancing Nigeria’s economic interests and security.

President Buhari last week approved the immediate reopening of four major land borders in Nigeria.

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The borders are Seme in the South-west part of the country, Ilela in the North-west, Maitagari in the North-west and Mfun in the South-south.

AfCFTA

In January 2012, the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia, adopted a decision to establish a Continental Free Trade Area by an indicative date of 2017.

The Summit also endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT), which identified seven priority action clusters.

These are trade policy, trade facilitation, productive capacity, trade related infrastructure, trade finance, trade information, and factor market integration.

However, this deadline was not met, until July 2019 when the operational phase of the AfCFTA was launched during the 12th Extraordinary Session of the Assembly on the AfCFTA in Niamey.

After the meeting, 44 out of the 55 AU member states signed the consolidated text of the AfCFTA Agreement, 47 signed the Kigali Declaration and 30 signed the Protocol on Free Movement. Only Eritrea is yet to sign the AfCFTA Agreement.

The main objectives of the AfCFTA is to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.

It was to also expand intra-African trade through better harmonisation and coordination of trade liberalisation, facilitation and instruments across Africa in general.

The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.

AfCFTA will be governed by five operational instruments. These are the Rules of Origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payments system and the African Trade Observatory.

To date, the AfCFTA Agreement has been ratified by 36 AU member states, 32 of which have deposited their instruments of ratification with the African Union Commission (AUC ) chairperson.

The instruments of ratification for Somalia, Algeria and Nigeria are still pending, while Zambia has also indicated cabinet approval for ratification, according to Tralac, a trade law centre based in the Western Cape region of South Africa.

The countries that have deposited their instruments of AfCFTA ratification with the AUC Chairperson are Ghana, Kenya, Rwanda, Niger, Chad, Congo Republic, Djibouti, Guinea, Eswatini, Mali, Mauritania, Namibia, South Africa, Uganda, Ivory Coast (Côte d’Ivoire), Senegal, Togo, Egypt, Ethiopia, The Gambia, Sierra Leone, Saharawi Republic, Zimbabwe, Burkina Faso, São Tomé and Príncipe, Gabon, Equatorial Guinea, Mauritius, Angola, Lesotho, Tunisia and Cameroon.