By Chiamaka Olua
A University Don, Prof Ellis Idemobi, of the Department of Business Administration in Chukwuemeka Odumegwu Ojukwu University, Anambra State, believes that Nigeria lacks the capacity to immensely benefit from the Africa Free Trade Agreement (AFCFTA) unless fundamental reforms are taken to drastically improve infrastructure deficit and security challenges that are seriously hindering business development in Nigeria.
Prof Idemobi stated this at the presentation session of Nnamdi Azikiwe University Business School International Conference last Tuesday.
According to him, it was understandable that the free trade agreement offered the country a unique continental market access that could be supported with increasing focus on industrialization as a catalyst for growth, as well as efforts of the government to shift away from over-reliance on the volatile oil exports, to boosting Nigeria’s manufacturing sector and exports.
Under the trade pack, he further explained, African countries would be expected to look inward and make it easier to trade with each other by removing current barriers to increased trade on the continent, such as high tariffs.
‘Having access to a larger market of around 1.2 billion Africans will surely trigger industrialization and manufacturing across the continent and, in turn, create vast employment opportunities on a continent that is seriously plagued by massive unemployment and migrant crisis,’ Idemobi stated.
He said that despite what he called mouth-watering advantages that Nigeria stood to gain as Africa’s biggest economy, the competitiveness of the Nigerian manufacturing firms against their counterparts from other African countries with far better national factor conditions remained doubtful.
He expressed immense fear that Nigeria could become a dumping ground for African goods and services just like Chinese imports. According to Prof Idemobi, since Nigerian manufacturers must first satisfy the domestic market before exporting the surplus, it was almost impossible to target the export market with the current capacity utilization falling below 55%. According to the Don, it was only in the cement and beer sub-sectors that Nigeria seemed to have achieved some level of domestic market self-sufficiency and minimal export capacity.
He therefore advised government at all levels and the political class to tackle infrastructure and insecurity of life and property challenges.
‘These critical issues have adversely affected economic growth for many years. It is sad to note that labour and capital no longer move freely and along location advantages within the country due to widespread insecurity. Though the agricultural sector looks good to take advantage of the free trade deal, there is palpable fear about lower agricultural output in coming years due to frequent farmers-herders clashes in many parts of the country,’ he submitted.
According to him, unless those challenges were tackled headlong, Nigerian manufacturing firms and agricultural products exporters would not be able to take maximum advantage of the Africa free trade deal.