Olalekan Adetayo and Oyetunji Abioye
African leaders agreed on Wednesday to form a $3tn continental free-trade zone encompassing 1.2 billion people, but its two biggest economies, Nigeria and South Africa, did not sign up, diminishing its impact.
The African Union started talks in 2015 to establish a 55-nation bloc that would be the biggest in the world by member states, in a bid to increase intra-regional trade, which sits at a measly 15 per cent of Africa’s total commerce.
Rwandan President, Paul Kagame, the host of an AU summit, called to conclude the initial negotiations, declared the meeting a success after 44 African nations signed up to establish the free-trade bloc within 18 months.
It was not immediately clear why Nigeria stayed on the sidelines, but South Africa President, Cyril Ramaphosa, said he would sign once necessary legal processes were done, Reuters reported on Wednesday.
But the Federal Executive Council presided over by President Muhammadu Buhari on Wednesday was said to have rescinded its earlier decision on the Africa Continental Free Trade Area agreement.
The meeting, it was learnt, resolved to set up a committee that would consider the agreement and report back to the council in two weeks.
The Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, disclosed this to State House correspondents at the end of the meeting at the Presidential Villa, Abuja.
The council had at a meeting presided over by Vice-President Yemi Osinbajo last Wednesday approved the agreement.
Buhari would have signed the agreement on Tuesday at an extraordinary meeting of the Heads of Government of the African Union in Kigali, Rwandan but he called off the trip at the last minute.
Adesina listed members of the presidential committee that would review the agreement to include the Ministers of Finance, Budget and National Planning , Labour, Foreign Affairs, Science and Technology as well as the Central Bank of Nigeria, Federal Inland Revenue Service, the Nigerian Customs Service and the Nigerian Immigration Service.
The presidential spokesman said Buhari would not enter into any form of agreement that would affect the country negatively.
He said, “The explanation from the President which the FEC bought was that he would not want to agree to anything that would hinder local entrepreneurs. And on the surface, except if proven wrong, is that that agreement has the capacity to affect local entrepreneurship.
“Then he (Buhari) also said that anything that could encourage the dumping of finished goods in Nigeria was going to be contrary to our interest. So, it is one of the reasons why he declined.
“Then he said the country is yet to fully understand the economic and security implications of the agreement.
“So, there has to be further consultations with different stakeholders and the final position was that a committee be set up to meet and review the contents of that proposal and they will do it within two weeks and get back to the Federal Executive Council.”
South Africa was reportedly examining the legal process of the agreement.
“President Ramaphosa has undertaken that South Africa will become a signatory to the agreement once the legal and other instruments associated with (the trade bloc) are processed and ratified by South African stakeholders and parliament,” the presidency said in a statement according to a Reuters report.
Others staying out of the bloc were Botswana, Lesotho, Namibia, Zambia, Burundi, Eritrea, Benin, Sierra Leone and Guinea Bissau.
“It would have been great if the two biggest economies on the continent, Nigeria and South Africa, had signed, but the most important is that the rest of the continent is sending a right message to these two biggest economies that we are moving ahead without you,” an analyst at Confidential Strategies in Ghana, Michael Kottoh, said.
The project needed a minimum of 22 countries signing up to get off the ground and Kagame hailed the effort so far.
“What is at stake is the dignity and well-being of Africa’s farmers, workers and entrepreneurs,” he said.
The AU Trade Commissioner, Albert Muchanga, also put a positive spin on the absence of the top two African economies, telling Reuters they would soon join in.
“They are still doing national level consultations and so when they finish they will be able to come on board,” he said.
Economists have pointed to Africa’s low level of intra-regional trade as one of the reasons for the continent’s enduring poverty and lack of a strong manufacturing base.
It is blamed on a host of factors, from colonialism, to high internal tariffs to poor road and rail links to excessive border bureaucracy and petty corruption at frontier checkpoints.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.