Nigeria Signs Africa Free Trade Agreement

By April 11, 2021 Uncategorized No Comments

Jeremy Cape, Squire Patton Boggs` tax and policy partner in London, agrees: “Africa does not act much on its own, and the question is whether the region will lead to the necessary investments in infrastructure or whether it will be hampered by the absence of these investments.” Nigeria will need improvements and adaptations to its administrative infrastructure, legal and trade if he wants to implement the free trade area and embrace it completely, and Ajagbe is aware that it is “not as robust as it should be,” although he says this also applies to its neighbours: “It is a brave new world for much of Africa and many support services – legally included – are still ongoing.” The agreement is an attempt by the AU to achieve continental integration that allows the free movement of people, capital, goods and services, with the aim of achieving economic integration, promoting agricultural development, food security, industrialization and structural economic changes on the African continent. According to a 2014 African Development Bank study, only 16% of African countries` international trade is between African countries. It currently has three protocols: the Trade in Goods Protocol, the Trade in Services Protocol and the Dispute Resolution Protocol. These protocols contain provisions relating to tariff concessions, customs cooperation, mutual assistance, and the removal of technical barriers to trade, which are mandatory for signatory states. Several committees have been established for trade in goods, trade in services, rules of origin, trade policy measures, non-tariff barriers, technical barriers to trade, and health and plant health measures. [39] Dispute resolution rules and procedures are still being negotiated, but should also include the appointment of a dispute resolution authority. [35] The Committee of Senior Trade Officials implements the Council`s decisions. The Committee is responsible for the development of programmes and action plans for the implementation of the AfCFTA agreement. [39] With the entry into force, AfCFTA aims to create an internal market for goods and services in Africa. By 2030, the continent`s market size is expected to be 1.7 billion people, with more than $6.7 trillion in cumulative consumer and business spending – when all African countries join the Agreement.

But despite these prospects and Nigeria`s positive attitude towards the outside world, the country continues to put a big red flag on free trade hopes across the continent. More than a year of speculation ensued, after Buhari left the AU`s extraordinary meeting in March 2018, during which the agreement was launched without a signature, citing the need for further consultations. Inside the country, there was talk between protectionism and free trade, much like Brexit or the trade war between the United States and China. Free trade agreements aim to reduce tariffs between Member States. The purest free trade agreement (FTA) removes all border taxes or trade barriers on goods. He hopes that the phasing out of tariffs will help boost regional trade by 60% in three years. Currently, only 16% of African nations` trade with continental neighbours is paid. However, shortly before the agreement was signed last year, it abruptly changed course after unions and local businesses feared they would not be competitive if trade barriers were removed.

What complicates matters further is that Africa was already divided into eight separate free trade zones and/or union unions, with different regulations. [Note 1] These regional bodies will continue to exist; The African Continental Free Trade Agreement aims firstly to remove barriers to trade between the various pillars of the African Economic Community and, finally, to use these regional organisations as building blocks of the ultimate goal of a customs union

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