Forty-nine African countries have signed the African Continental Free Trade Area agreement, but Nigeria — the continent’s largest economy — is not among them.
South African president Cyril Ramaphosa put pen to paper on behalf of his country at the African Union summit in Nouakchott, Mauritania last month, and has urged Nigeria to follow suit in a speech in Abuja. South African officials have informed the African Union that they expect the deal to be ratified in Parliament by December this year.
“At the 31st session of the African Union, South Africa joined its counterparts in signing the agreement. Today I stand here and I say: Nigeria, no pressure,” said Ramaphosa, tongue in cheek, to applause from the audience.
Nigeria’s federal government has undertaken an extensive consultation process with stakeholders including state and local governments and trade unions, and has said it cannot sign until that process has concluded.
“You as Nigeria should also be applauded as you go through the process of consulting. Take your time, but don’t take too long because the continent is waiting for Nigeria and South Africa,” said Ramaphosa.
Ramaphosa was speaking at the annual meeting of the African Export-Import Bank on Wednesday. He will meet Nigeria’s president, Muhammadu Buhari, later in the day.
Mahmoud Isa-Dutse, permanent secretary of the Nigerian finance ministry, said that the country fully supports the free trade deal. “It’s not that we are not going to sign, it’s just that we are doing consultations. A number of interest groups raised issued which are being addressed. As you know this is a major development, and there are political economy issues. Some groups will lose, some groups will win,” he said.
Isa-Dutse elaborated on some of the issues faced by his government: “There will be short term pains for some groups, because when you open up there will be more competition and some goods will arrive cheaper which is better for consumers. But existing rent seekers and high cost producers will lose…so part of the consideration process is to explain these things to people and ensure that they understand that in the long term everyone will be better off. But in the long term it is very clear to us that this free trade agreement is in the best interests of Nigeria and the whole continent, it’s just to sort out these minor issues.”
Albert Muchanga, the African Union’s trade commissioner, said that six countries have already ratified the Continental Free Trade Area agreement, with eight more expected to ratify it in August. Another eight — including South Africa — have indicated they will submit the necessary instruments of ratification by the end of the year.
Twenty-two countries are required to ratify the agreement before it comes into force.
“A month after we get the last instrument of ratification among the 22, the agreement comes into force. It is possible that by 31 January 2019 the agreement will come into force,” said Muchanga.
While the agreement has been hailed by African leaders as a major step in the continent’s economic development, it is still light on major details of how exactly it will be implemented and the exact nature of the trade rules it will operate under. Negotiations on thorny subjects such as intellectual property rights, rules of origin and competition regulations are still in progress.