BusinessDay 27 Mar 2018

Tuesday 27 March 2018
10 BUSINESS DAY
C002D5556
COMMENT
AfCFTA: Why is Nigeria hesitant?
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MAZI SAM OHUABUNWA OFR
sam@starteamconsult.com
Nigeria is the most populous
country in Africa with current
population estimated
at about 194 million growing
at about 2.6% per annum.
It is said that every one of four black
people in the world is a Nigerian. With an
estimated GDP of $ 405 billion Nigeria is
still the largest economy in Africa in spite
of its recently ended descent to economic
recession. So with the largest population
and largest economy, it is natural that
Africa expects leadership from Nigeria.
The discussions for the conversion of
the African Union (AU) into a common
economic zone like the European Union
(EU) had been going on since 2012 and
actually intensified since 2015. Nigeria’s
current Minister of Industry, Trade and
investment, Okechukwu Enalamah was
the Chairman of the African ministers of
Trade (AMOT) that signed off the legal
instruments establishing the African
Continental Free Trade Area (AfCFTA),
thereby paving the way for the heads of
states and governments to gather in Kigali
Rwanda last Wednesday 21st April to
ratify the agreements and protocols for the
common customs union that will become
effective in 18 months time. But Nigeria
was conspicuously and you could say
embarrassingly missing when 44 African
countries signed the agreement.
The question is why would Nigeria
‘dodge ‘ at the last minute, even when the
meeting was almost on the way? Does it
show that President Muhammadu Buhari
(PMB) and the government he leads do
not understand the benefits of having free
trade within the continent? Removal of
trade tariff barriers on 90% of goods and
liberalizing services have many advantages.
One, it will create a market of 1.2
billion people with a GDP size of $2.2
trillion with a potential to quickly reach
$3.4 trillion. Two, it will allow people,
goods and services flow seamlessly from
one African country to another and in
the process create more opportunities
for entrepreneurship. Three, because
tariffs will be removed on most of the
goods imported within the free trade
zone, costs of imports will fall and prices
of imported goods will come cheaper to
African consumers including the suffering
people of Nigeria. Four, it should
lead to creation of more jobs which will
help us solve a major economic challenge
confronting Nigeria. Five, because
African countries can now trade with
each other with minimum inhibition,
African capital will circulate more in
Africa creating great benefits. It is so
embarrassing that when African countries
need anything, their first instinct is
to look up to Europe (especially UK and
France,) North America (especially USA)
or Asia (particularly India & China). They
hardly looked next door, despite nearness
and similar market and cultural
characteristics.
Today intra-African trade is only
about 15% of total trade within the
continent, indicating that 85% of African
trade is done with ‘outsiders’. In contrast,
Europe has 67% of its trade done in the
European Union; Asia has 58% as intraregional
trade; and North America has
48%. Therefore it should be clear to
all those who want Africa to come of
age and begin to compete fairly with
the rest of the world and to stop being
over-dependent on charity or aid from
the rest of the world, Africa must grow
its intra-regional trading muscles. And
given the size of Nigeria and its several
factor endowments, Nigeria should be
a major beneficiary of the AfCFTA deal.
So why would Nigeria dither and give
the impression of a confused country?
We must quickly undertake the
consultations with all stakeholders
and take on board all concerns and
design how to contain them and then
go to Kigali or Nairobi or Addis Ababa
and sign the agreement and begin the
process of rapidly expanding intra-
African trade.
Certainly, I disagree with the inelegant
way Nigeria carried itself in this embarrassing
last minute refusal to take its proper
position as Africa was making history in
Kigali, forming the largest Trade block
since WTO. Nigeria had all the opportunity
to discuss this matter with all stakeholders
before this day to reach a consensus. To
allow the Federal Executive Council (FEC)
to approve the terms of the agreement,
authorizing PMB to go to Kigali only to
abort the trip at the last moment demeans
Nigeria’s standing in Africa or indeed in
the rest of the world. This kind of behaviour
which has the trade mark of Trump’s
“America First” and weird behaviour in the
international arena does not fit Nigeria.
But when all is considered, I will still think
that PMB made the right decision not to
attend. Firstly, it was an acknowledgment
that though he had failed to consult with
the organized private sector prior to getting
the FEC’s approval, he regarded the red flag
raised by the Manufacturers ‘Association of
Nigeria (MAN) especially and the Nigeria
Labour Congress (NLC) serious enough.
Despite the embarrassment and the apparent
slur on Nigeria’s image and standing by
being absent in Kigali as Africa made true
history, I salute his courage in deciding to
err on the side of caution. It is my thinking
that he was showing that Nigeria had learnt
lessons from the WTO debacle in 1994. The
Nigerian government at the time was criticized
severely for rushing to sign the WTO
agreements without fully understanding
the ramifications of globalization. Buhari
seemed not to want a repeat, where we
would sign this African trade deal as good
as it sounds without a full understanding
of its ramifications on local manufacturing
and domestic security.
Secondly, critical issues raised by
MAN truly require full answers. The
area of major concern is how are we
going to enforce the rules of origin? The
inconvenient truth is that except for a
few countries - Egypt, Morocco, Kenya,
Nigeria and South Africa, there is little real
manufacturing going on in much of Africa.
Primary commodities yes, but not manufacturing.
Today Nigeria perhaps has
the largest manufacturing base outside
South Africa. In normal circumstances
that should give Nigeria an advantage as
it could easily seize the new open market
opportunities to dominate the African
market in manufactured goods. But
experience from the ECOWAS Common
External tariff (CET) for example, seem
to dampen the enthusiasm of Nigerian
manufacturers. It has been alleged that
foreign companies set up ‘shell’ manufacturing
companies in neighbouring African
countries and simply import finished
or almost-finished products into such
countries and subsequently off load them
on the Nigerian market, often at lower
prices than local manufacture. Matter is
worsened for Nigerian manufacturers
because much of their products are globally
uncompetitive due to infrastructural
deficits, especially power and the overall
high cost of doing business. Thus Nigerian
manufacturers suffer double jeopardy.
They cannot easily export to other African
countries because those countries have
easy access to cheaper imports from Asia
and Latin America especially. And then
in the domestic market, the free import of
what one may call pseudo- manufactured
goods or what really are trans-shipped
finished goods using African countries as
‘transit camps’ compromise the viability
of the locally manufactured goods. That is
the fear of the local manufacturers.
It is this reality that has made the
growth of the export of Nigeria’s manufactured
goods to remain dismal and
indeed has forced many Nigerian manufacturers
to focus almost exclusively on
the domestic market. This is the reason
crude petroleum has remained the major
export and foreign exchange earning item
on the Nigeria’s economic menu. But
having said all these, I still believe that in
the long run it is imperative that Nigeria
signs the treaty and joins the Continental
Free Trade Area (CFTA). The issues raised
by the manufacturers and labour are not
insurmountable. The primary need is
to work out a water- tight mechanism
to ensure no African country allows its
territory to be used as a transit route to
dump products on the Nigerian market.
Nigeria must insist on getting legally
enforceable assurances on this. Secondarily,
the government must continue to
devote maximum effort and investment
on bridging the power deficit in Nigeria.
This is a major issue for Nigeria’s global
competitiveness. The current effort at improving
the ease of doing business must
be sustained with increased urgency. Also
the federal government should continue
to offer incentives like the Export Expansion
Grant (EEG) and tax deductibles for
‘own’ energy to manufacturers to help
overcome existing uncompetiveness as
interim measures.
So we must quickly undertake the
consultations with all stakeholders and
take on board all concerns and design
how to contain them and then go to Kigali
or Nairobi or Addis Ababa and sign
the agreement and begin the process of
rapidly expanding intra-African trade.
The benefits are enormous and certainly
exceed the concerns of any particular
trade group. And lastly, let us as nation
learn to get our act together and avoid
dancing naked in the market place. Let
the right things be done at the right time!
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STRATEGY & POLICY
MA JOHNSON
Johnson is a marine project management
consultant and Chartered Engineer. He is
a Fellow of the Institute of Marine Engineering,
Science and Technology, UK.
If this writer was told by a friend
that an appointee of the President
of Nigeria disobeyed an executive
order, it would have been taken
as one of those mammy market jokes
of the year. A Nigerian proverb says
that when a cockroach dances by the
roadside, it is in response to sounds of
drums emanating from a nearby bush.
So, when any appointee disobeys the
order of his principal at the executive
level of government, there is likely to
be someone somewhere giving the
appointee confidence to flout his
superior’s orders.
The crux of the matter in this piece
is Mr President’s expressed shock that
the IGP, Ibrahim Idris, did not spend
24 hours in Benue when the latter was
directed to relocate to the state and
remain there till peace was restored.
Accountability, responsibility, and disobedience to Mr President’s order
One is surprised why the IGP did
not comply with a presidential order,
and why Mr President did not
follow through his orders. Both Mr
President and any of his security
chiefs are accountable and responsible
to Nigerians and Nigeria in the
discharge of their duties.
Every elected and appointed
public officer irrespective of rank and
position of authority is accountable,
responsible and must obey lawful
orders. Authority must not be mistaken
for responsibility. And anyone
responsible can only delegate his/
her authority but not the responsibility
attached to the office occupied.
The responsibility of a leader is to
be responsible for actions of subordinates.
The order, according to Mr
President, was for the IGP to remain
in Benue state until he found solutions
to farmers/herdsmen attacks
which claimed several lives, and
displaced thousands of indigenes
of the state. The IGP was alleged to
have barely stayed in Benue for a day
after which he moved to Nasarawa
state. This act of insubordination
compelled Mr President to demand
for a full report on the Nigeria Police
Force operations till date after which
the presidency will take further decisions.
After flouting his principal’s
orders, the IGP remains in office.
Certainly, The IGP knows that Mr
President has authority over him,
just the same way his police men and
women are under his authority.
Nigeria‘s 1999 Constitution is supreme
and confers on the President
broad executive and enforcement authority
to manage resources and staff
of the executive arm of the government.
The Constitution is binding on all authorities
and persons with discretionary
powers given to the President in emergencies
or wars to deploy the military
and other security agencies. That is why
the Nigerian Security and Civil Defence
Corps (NSCDC) has been deployed by
Mr President to provide physical security
to schools in the North East.
In leadership roles, accountability
is the acknowledgement and assumption
of responsibility for actions and
decisions. It includes the obligation
to report, explain and be answerable
for resulting consequences of one’s
actions. Accountability is universal,
and it is of importance in all spheres of
our national life. But in Nigeria, most
people in the public space gloss over
accountability.
The importance of accountability in
the military cannot be overemphasized
because it is the last bastion of security
of the country. The same goes for the
NPF which is the first layer of security
in protecting lives and properties of
citizens in a democracy. A nation whose
security is seriously compromised by
incessant kidnappings, herdsmen attacks
and armed robbery will barely accept
a blame game between the security
operatives when there is a display of
ineptitude as reflected in the Dapchi
incidence. Thank goodness, almost all
the Dapchi girls abducted have been
released to the FG by Boko Haram.
It is necessary to state that handing
over of security operations between
the military and the NPF or any security
organization is not done orally.
There is a procedure which middle
level cadre officers of the military, the
NPF, and other security services have
been taught. A security sector that is
bereft of accountability would not be
able to function cohesively in order
to achieve its objectives of providing
national security.
The reason why accountability is
so important in the security sector,
particularly the military, is due mainly
to situations of life and death which
personnel of every rank could be
confronted with in war, and war-like
situations. Every officer and soldier is
accountable for some phase or aspect
of any operation, and if there is laxity
by any one, it can have an adverse
effect on completion of the assigned
mission as well as on the safety of
all ranks involved in it. That is, any
security personnel who deliberately
or erroneously does not execute his
superiors’ orders is a disaster waiting
to happen. The refusal of a security
personnel to respond positively and
timely to superior orders may lead to
the destruction of thousands of his/
her colleagues.
So, the IGP did not yield to that
particular presidential order. Why?
May be the IGP wants Mr President
to believe that he did not acquiesce
to his orders directing him to remain
in Benue state because of the implication
of such an order. Anyway, only
the IGP knows what went wrong in
executing Mr President’s orders. Some
of my friends have expressed their
views that these guys in the security
sector are trying their best. I agree in
Toto. But the fact remains that some of
them are not living up to the expectations
of Nigerians. Those in leadership
positions in the security sector should
note that effective and progressive
discipline must be enforced to instill
accountability amongst all ranks. It is
the view of Thomas Paine, American
philosopher and political theorist,
that “a group of men holding themselves
accountable to nobody ought
not to be trusted by anybody.” All
authorities and persons throughout
Nigeria should bear in mind that it
is morally wrong and unacceptable
to seek to escape the consequences
of their acts.
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