Osinbajo calls for right policy action to actualise AfCFTA prospects

Vice-President Yemi Osinbajo says African leaders must provide policy actions needed for a stable macroeconomic environment to actualise prospects of the African Continental Free Trade Area (AfCFTA).

In a statement on Thursday, Laolu Akande, Osinbajo’s spokesman, said the vice president made the call in a pre-recorded message at a roundtable on industrialisation in Africa.

The event organised by the Manufacturers Association of Nigeria (MAN) to celebrate its golden jubilee was themed “Positioning African Industries for Economic Transformation and Continental Free Trade”.

AfCFTA is a trade agreement between AU member states with the goal of creating a single market followed by free movement and a single-currency union.

The free-trade zone would be the largest in the world since the creation of the World Trade Organisation in 1995.

The vice-president said AfCFTA offers limitless opportunities for the industrialisation of Africa, adding that authorities across the continent must take the right policy actions to actualise the prospects which includes protection of local industries and improving value chains.

“We must take policy actions to create an environment in which businesses can thrive. To start with, we must adopt the right type of macroeconomic and industrial policies,” he said.

“It is important for African governments to provide a stable macroeconomic environment which avoids and smoothens out volatility in prices, sharp deteriorations in the current account and budget deficits and of course, rapid accumulation in debt burdens.”

Osinbajo said policies like tariffs, quotas, subsidies and non-tariff barriers which protect infant industries so that they could create jobs and enable learning are vital.

He added that well negotiated rules of origin are important in the context of the free trade agreements as they are key to preventing trans-shipment and the deflection of trade.

According to him, MAN must step up to serve as an advisory body in ensuring that quality products are manufactured and transported into and outside the country.

“As we go further into the rules of origin negotiations–these rules negotiations have, of course, started– but I think as we go on, we should get more contributions and advise from MAN,” he said.

“Our manufacturers must also strive to become competitive after clearly specified time periods so that they can withstand the ever present danger of stiff competition from imports.

“In other words, while our manufacturing industries must be nurtured and supported, they cannot remain infants forever.”

Osinbajo said there is need for a network of roads, bridges and rail that will facilitate the movement of goods and people alongside building electricity plants to power factories and the broadband networks that lubricate modern business.

He added that it is essential to develop sites with dedicated infrastructural and regulatory structures like special economic zones and shared facilities for small businesses.

The vice president also canvassed for ease of payments across borders and implementation of the protocols on free movement of persons.

“It is particularly important in this regard to rapidly operationalise the effort by Afreximbank to establish a Pan-African Payments and Settlement Platform,” he said.

“This will go a long way in creating the desired continental payments system and also in facilitating cross-border informal trade which is estimated to be about 93 billion dollars per annum.”