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AfCFTA Implementation for Inclusive Growth: Nigeria's Role & Opportunities

Understand the African Continental Free Trade Area (AfCFTA) implications, legal instruments, and objectives. Explore opportunities for Nigeria's economy, population, and influence in the global market. Discover the potential for trade growth and economic transformation in line with Agenda 2063.

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AfCFTA Implementation for Inclusive Growth: Nigeria's Role & Opportunities

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  1. 017, MAHE VICTORIA, SEYCHELLES NACCIMA DIALOGUE SERIESON THE AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA) LAGOS, FEDERAL REPUBIC OF NIGERIA 21ST AUGUST 2019 PRESENTATION BY WILLIE SHUMBASENIOR EXPERT AND ADVISOR, CUSTOMS

  2. OUTLINE • Background of the AfCFTA – Why AfCFTA? • Implications for Nigeria • Legal Instruments of the AfCFTA • Signature and Ratification • Launch and Implementation of the AfCFTA • Key Implementation Issues

  3. BACKGROUND OF THE AFCFTA – WHY AFCFTA?

  4. WHY THE AFCFTA? • Trade is a powerful engine for economic growth and development. • Studies have shown a relationship between trade and economic growth and development • However, Africa’s fundamental role in the global trade market has been to provide raw commodities in exchange of manufactured goods, thereby capturing a minimal 3% of the global share of trade. • In addition intra-Africa trade is just 15% of its total trade, compared with 19% intra-regional trade in Latin America, 51% in Asia, 54% in N. America and 70% in Europe. • The low level of intra-African trade can change if Africa effectively addresses: supply side constraints; weak productive capacities; infrastructural bottlenecks; trade information networks; access to finance for traders and other economic operators; trade facilitation and trade in services and free movement of people. Update on the CFTA

  5. AGENDA 2063 -THE AFRICA WE WANT 1. A prosperous Africa based on inclusive growth and sustainable development 2. An integrated continent, politically united and based on the ideals of Pan Africanism and the vision of Africa’s Renaissance 3. An Africa of good governance, democracy, respect for human rights, justice and the rule of law ; A peaceful and secure Africa 5. An Africa with a strong cultural identity, common heritage, values and ethics 6. An Africa where development is people-driven, unleashing the potential of its women and youth 7. Africa as a strong, united and influential global player *AfCFTA is premised on the Abuja Treaty establishing the African Economic Community (AEC), 1991 which gives a vision of deeper economic integration for Africa egcustoms unions, a central bank, and a common currency

  6. Objectives of the AfCFTA Achieve a comprehensive and mutually beneficial trade agreement among the Member States of the African Union. • Enhance competitiveness at all levels and more specifically at the industry and enterprise level through exploiting opportunities for scale economies, reducing business costs, continental/global market access and better reallocation of resources including through the development of trade-related infrastructure; • To overcome dependence on exportation of primary products and promote social and economic transformation for inclusive growth, industrialization and sustainable development in line with Agenda 2063; Update on the CFTA

  7. Objectives of the AfCFTA • Realize the potential to expand and accelerate the growing diversification and dynamism of intra-African trade including the aim to increase by 50 % trade among African countries by 2022 through better harmonization, coordination and implementation of trade liberalization and facilitation regimes and instruments across RECs and across Africa in general; • In the context of boosting intra-Africa trade and realizing the transformational potential of increased trade among African countries, to create a freer market for goods and services, building upon the trade agreements within the regional economic communities and associated commitments and thus pave the way for accelerating the establishment of the Continental Customs Union; Update on the CFTA

  8. IMPLICATIONS FOR NIGERIA • Your influence will be felt: • Population of 200 mil, seventh largest in the world • 3rd largest youth population in the world, after India & China • Giant in Africa –in terms of influence etc • 20th world largest economy • Strong in services • Entrepreneurial population • Middle income status • This creates opportunities for the people • Plenty of natural resources • Proximity to US and EU markets • Opportunities for investment Update on the CFTA

  9. LEGAL INSTRUMENTS OF THE AFCFTA Update on the CFTA

  10. AfCFTA Negotiations • Historic decision and launch of the African Continental Free Trade Area negotiations in Johannesburg, RSA done in June 2015 • Negotiations were to be conducted in 2 phases as follows: -1st Phase in Trade in Goods; Trade in Services; andRules and Procedures for Settlement of Disputes -2nd Phase would cover Investment, Competition Policy and Intellectual Property Rights • Appointment of the Champion of the AfCFTA, H.E. Mr. Mahamadou Issoufou, President of Niger in Jan 2017; • Champion and leader has committed a lot of time, resources and interest for the successes for the achievements of the process. • Outcome is a product of negotiations by the 55 Member States; Each country had a team led by a Chief Negotiator

  11. Agreement Establishing the AfCFTA Update on the CFTA

  12. SIGNATURE AND RATIFICATION Update on the CFTA

  13. SIGNATURE AND RATIFICATION OF THE AFCFTA • 44 countries signed the Agreement during the 10thExtraordinary Summit in Kigali, Rwanda on 21 March 2018; 8 additional countries signed later. • Nigeria and Benin signedthe Agreement duringtheJuly 2019 Summit in Niamey, Niger • As on 21 Aug 2019, all countries except Eritrea hadsignedthe Agreement • As on 21 Aug 2019, thefollowing 27 countries haddepositedtheinstrumentsofratificationwiththe AUC: Burkina Faso; Chad; CongoRepublic; Côte d’Ivoire; Djibouti; Egypt; Eswatini; EquatorialGuinea; Ethiopia; Gabon; Gambia; Ghana; Guinea; Kenya; Mali; Mauritania; Namibia; Niger; Rwanda; SaharawiRepublic; São Tomé and Príncipe; Senegal; Sierra Leone; South Africa; Togo; Uganda; and Zimbabwe • The 22nd instrumentofratification was depositedwiththe AUC on 29 April 2019. In termsofArticle 24, theAfCFTA Agreement, thereforeenteredintoforce on 30 May 2019

  14. LAUNCH AND IMPLEMENTATION OF THE AFCFTA Update on the CFTA

  15. PHASES OF THE NEGOTIATIONS • Phase I involvedTrade in Goods; Trade in Services; and Rules and Procedures for Settlement of Disputes; The Protocols have been finalised. • Under Trade in Goods- there is outstanding issues on a) Rules of Origin and b) Tariff Offers • Under Trade in Services, the 5 priority sectors agreed upon are: Transport; Communications; Tourism; Financial; and Business Services Details on the offers are still to be finalised; • The Rules and Procedures for Settlement of Disputes have been finalised • Phase II issues cover Investment, Competition Policy, and Intellectual Property Rights – work on this has started Update on the CFTA

  16. IMPLEMENTATION OF THE INSTRUMENTS • The Agreement, Protocols were adopted by Summit in March 2018 • Following the deposits of the required 22 ratifications the Agreement came into effect on 30th May 2019 • Entry into force of the Agreement brings “State Parties” ieMember State that has ratified or acceded to the Agreement; • Operation of the AfCFTA was launched in July 2019 • Key outstanding issues under trade in goods are (a) Rules of Origin and (b) Tariff Offers • The Summit held in Niamey in July 2019 agreed that implementation of the AfCFTA will come into effect in July 2020; This is the crux for the business person as it enables you to trade free across the continent

  17. Instruments revealed during Launch • Operation of the AfCFTA was launched in July 2019. The launch was supported by a presentation of the following instruments which will facilitate implementation: a) the agreed AfCFTA Rules of Origin; b) Dashboard of the AU Trade Observatory; c) AfCFTA Trade in Goods Password Protected Dashboard; d) Pan-African Payments and Settlements System; and e) Continental Online Mechanism for Monitoring, Reporting and Eliminationof Non-Tariff Barriers

  18. KEY OUTSTANDING ISSUES • Trade Facilitation issues • Customs Cooperation • Tariff offers must be finalised and publicised • Trade related infrastructure • Capacity Building and stakeholder engagement at national level • Alignment of national laws to AfCFTA; publication of trade law • Movement of business persons; visas • Harmonised Trade Documentation • Finalise work on Arbitrators • National Strategies and implementation plans • National implementation Committees Update on the CFTA

  19. Thank you for your attention Shumbaw@africa-union.org. wshumba@hotmail.com

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