Posted Fri, Dec 20, 2019 7:12 AM

Economic Implications of the African Continental Free Trade Agreement (AfCFTA) on the Nigerian Industrial Sectors

Global trade has witnessed drastic changes in the last two decades. The world trade paradigm has been increasingly marked by trade integration and the immense use of unilateral trade measures. It is by no surprise that the African Union (AU) Assembly of Heads of State and Heads of Government in 2012 saw the urgent need to create a continental free trade agreement, which essentially aims to reposition the African continent for improved intra-African trade as well as improving its trade with the rest of the world. The creation of African Continental Free Trade Agreement (AfCFTA) through series negotiations on the liberalisation of trade in goods and services in Africa, represents an ideal measure and a unique collaborative effort by African countries to bolster regional and continental economic integration. The AfCFTA is of major significance for the African continent. The framework for the establishment of the AfCFTA together with three Protocols (on trade in goods, trade in services and dispute settlement) was adopted by 44 African countries at the AU Assembly on 21 March 2018 in Kigali, Rwanda. Effectively, the AfCFTA entered into force on 30 May 2019, after the condition for the deposit of a minimum of 22 instruments of ratification was met. On July 8, 2019, Nigeria signed up to the AfCFTA. At the achievement of the recent milestone, the AfCFTA becomes one of the flagship projects of the First Ten Year Implementation Plan under the African Union (AU) Agenda. The initiative presents major opportunities to boost intra-African trade. Some of its objectives aim to create a single continental market for goods and services, with free movement of business persons and investments, as well as enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources. There is no doubting the claims that the AfCFTA can support the realisation of the continent’s economic progress. It is expected to be a game-changer for Africa and a key engine of economic growth, industrialization and sustainable development of the entire continent.