Corporate Nigeria can reach global scale via AfCFTA, Buhari adviser says

By David Whitehouse
Posted on Monday, 6 December 2021 10:13

Francis Anatogu is a special adviser to Nigeria's president on the public sector and executive secretary on the country's AfCFTA national action committee. Photo supplied

Nigeria can use African free trade as a springboard to penetrate global value chains, presidential adviser Francis Anatogu tells The Africa Report.

Free trade creates an opening for Nigerian industries to achieve scale and diversify the economy away from oil dependence, says Anatogu, who is also executive secretary of Nigeria’s National Action Committee on the African Continental Free Trade Area (AfCFTA). African free trade is “ a platform for global exports. It’s the catalyst that starts everything.”

AfCFTA aims to redefine Africa’s landscape of fragmented, uncompetitive national markets which have made it harder for economies to escape dependence on commodities such as oil. Some have argued that the benefits of African free trade will be loaded in favour of smaller countries like Rwanda which will gain access to large export markets.

That view, says Anatogu, understates the potential for large countries such as Nigeria to achieve industrial scale and break through into African and global markets.

For Nigeria, “the first thing is to grow our exports,” Anatogu says. “Anything that helps that goal is welcome. We are an oil economy and we need to move away to non-oil.” Supplying just 10% of Africa’s imports would double Nigeria’s export base, he says. He points to fintech, entertainment and fibre optics as Nigerian industries which have achieved some export success even before African free trade.

  • Turning Nigeria into an automotive components supplier to South Africa will be much easier than building a complete local auto industry from scratch, he says.
  • Becoming a supplier of textiles to African markets would create the scale for Nigeria to be globally competitive, he adds.

Nigeria is among 39 out of 55 African countries to have ratified the treaty to date. Botswana, Mozambique, Morocco and Sudan are among those who have yet to do so. African countries have now agreed on rules of origin for 88% of products, and work is ongoing to achieve full agreement, Anatogu says.

  • Work also remains in reducing African barriers to trade in services, he adds. Domestic laws in areas such as data management and privacy “in some cases will have to change.”
  • Co-operation between national customs authorities needs to improve “to operationalise what is in the agreement.”

Scaling SMEs

President Muhammadu Buhari approved the creation of Nigeria’s AfCFTA national action committee in 2019. The committee is made up of representatives from government ministries, the private sector and civil society. “Our role is to drive implementation,” Anatogu says.

The committee’s initial work involved establishing that Nigeria has the capacity to identify and tackle “predatory” trade practices before a recommendation to Buhari to ratify the agreement was issued.

Key aims for Nigeria in 2022 are to get more large companies to partner with small and medium-sized companies (SMEs) to help them achieve scale, Anatogu says. SMEs need to invest and share resources together, and to embrace e-commerce platforms, he adds.

  • Free trade can help protect Nigerian business against the risk of further naira weakening, Anatogu says. The more businesses export, the more they can hedge against currency risk, he adds.
  • Co-operatives need to combine to achieve scale, Anatogu says. “We need some mega-co-operatives.”
  • Nigeria will also be pushing more companies to start global certification processes, and trying to increase awareness and buy-in at the level of Nigeria’s individual states.
  • The committee has been trying to help states identify the niches that they can develop under the accord, Anatogu says. “The idea is to build scale. We can’t do this alone at the national level.”

Bottom line

Anatogu sees the benefits of scale from African free trade as bringing global markets within Nigeria’s reach.

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