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INSIGHT:AfCFTA AGREEMENT: THE IMPACT OF METROLOGY ON GOODS FOR NIGERIAN MARKETS

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BY INNOCENT OROK

 

President Muhammadu Buhari

Since the signing of the African Continental Free Trade Area (AfCFTA) agreement by President Mohammadu Buhari of a Nigeria on the 7th of July, 2019,many knacking issues have crop up for and against the success or failure of the agreement in Nigeria and the Nigerian economy.

OSITA A. ABOLOMA (ESQ.)
DIRECTOR GENERAL/CHIEF EXECUTIVE

Nigeria became the 54th out of the 55 African Countries to sign the pack after some few months delays by President Buhari seeking for a study and understanding of the document and how it will benefit Nigeria before appending his signature.

The AfCFTA which is set to kick- off on 1st July 2020 was established on March 2018 provides a common trading ground for goods and services produce in all African Countries who are signatories to the pack without hindrance. It has it headquarters in Accra, Ghana and is expected to create jobs and generate over $35b yearly for the African continent.

For Nigeria it was a reluctant move before President Buhari signed the AfCFTA agreement, maybe considering the numerous economic and fiscal infrastructure deficits which the Country is grasping with at the moment.

It is a know fact that most of the African Countries on this pack have long ago solve some of the key infrastructural problems like power,roads and transportation networks (air, sea and rail), as such movement in and around the various countries of their trading choice will be easier, that cannot be said of Nigeria.

Critically too, while the industrialisation policies of these Countries are taking shape for manufacturing of home goods, Nigeria is in turn crazy for imported products with high level of smuggling of foreign products increasing geometrically.
At present, Nigeria despite its large market is regarded as a dumping ground for both genuinely imported products and smuggling ones mostly from Europe and Asian Countries which fall short of international standards and mostly fake and dangerous for consumption.
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With the signing of this African Countries trade pack, most questions from Nigerians and other stakeholders are what measures is government putting in place to checkmate dumping, smuggling and unwarranted imports on unwanted, fake and sub standard goods into the country in the name of trade brotherhood.?

Most critical too is the issue of metrology. In the AfCFTA protocol part 10, it lays much emphasis on Metrology, the science of measurement as a focal driver if other components of the quality infrastructure for a Country will work. How ready is Nigeria in this very important component?

It is certain that other Countries in the pack are taking cursory studies of the various protocols enshrined in the agreement to protect and prevent unnecessary abuse by other Countries. What is Nigeria doing in this aspect to prevent dumping of unfavorable and sub standard goods by other African countries in our domain.?

With the signing of this agreement by Nigeria and to fully prevent unnecessary abuse by other countries, is high time Nigeria put to maximum use the Nigerian Metrology Institute (NMI).

The NMI which is owned and managed by the Standards Organization of Nigeria (SON) is a world class laboratory equipped with modern and up to date facilities to measure weight and standards of products inline with the world acceptable standards.
SON has over the years utilized this facility to checkmate substandard goods, weight, mass and other international priorities of standardised commodities fit for human usage.

It is also expected that Nigeria being the largest market among the 55 Countries in Africa must use the Metrology mechanism to determine which type of products should be shipped or transported to Nigeria for consumption.

Like the United States of America (USA) and other European Countries who have their own standards of products being a big and an ignorable market, Nigeria can do same by using Metrology as one of the strong tool for imports of other African countries products into Nigeria in the AfCFTA agreement.

Wth the various grants and contributions from various Countries and donor agencies, part of the funds should be massively deployed to equipped, train and facilitate Metrological activities in the various participating countries to prevent sub standard goods and faking of products by member counties in the region.

NAGAFF POSITION ON THE AfCFTA AGREEMENT AND METROLOGY

In a letter addressed to President
Muhammadu Buhari by the National Association of Government Approved Freight Forwarders (NAGAFF), the group in its patriotic concern as a major stakeholder in Nigeria’s international trade logistics chain draw the attention of the president for the need to consider Metrology as regards protecting the country from dumping of hazardous goods and it dangers. The letter reads-

RE: AFRICAN CONTINENTAL FREE TRADE AREA: OUR CONCERNS AS MAJOR STAKEHOLDERS IN INTERNATIONAL TRADE

It gives us great pleasure to write you this letter on the recently signed African Continental Free Trade Area Agreement which is expected to foster a common market for goods to move freely from one Africa country to the other. We appreciate the demonstration of democratic virtue by your Excellency which made you to delay your assent to the Agreement until it had been subjected to proper examination by experts and made your assent to be a consequence of expert advise by relevant stakeholders.
Although we have our reservations that the process leading to the advise to Mr. President to sign up to the agreement was not all-inclusive enough.

However we have faith in your sense of judgment which made you to append your signature to the agreement at last. Even in spite of this, we have some critical observations in the entire process and we hope if properly addressed it would help in addressing some potential pit holes in the agreement.

Mr. President Sir, to us in NAGAFF one deficiency we noted is that Nigeria signing up for the African Continental Free Trade Area (AfCFTA) without due consideration to metrological shortcomings in our local manufacturing content. This is like opening our economy to further danger of dumping substandard, fake and life endangering products into Nigeria.

There is no gainsaying the fact that Nigeria is a large market for African countries in particular and the world economy, in general. It is unthinkable to note that we signed into this agreement without ensuring that Nigerian-made products can compete favourably with other manufacturers outside the Country.

It is no doubt that metrology is the science of measurement. It is the component of the National Quality Infrastructure (NQI) that ensures accuracy of measurements to the international system of units (SI).

We do also know that the institution that provides and ensures this accuracy and traceability of measurement in every country is the National Metrology Institute (NMI) which is domiciled in Standards Organization of Nigeria (SON) and located in Enugu state.

We are also aware that NMI is the custodian of the national primary measurement standards for all fields of measurements namely: – mass, volume, length, pressure, temperature, force, etc. It is therefore our informed opinion that building adequate infrastructure for metrology in Nigeria will provide the required confidence in Made-in-Nigeria products and services and will be highly competitive amongst the foreign products. In other words if Nigeria must benefit from AfCFTA we must ensure NMI is made to be adequately functional and proactive to quality assurance and standards.

Sir, we at NAGAFF over the years have formed the habit of continually advising Governments through our public policy advocacy on the need for government to pay greater attention on the informal sector groups rather than the present position wherein the government has continued with uncommon support for the Organized Private Sector with its bogus and unverifiable economic inputs to the ailing economy.
We wish to bring to your attention,

Mr. President that we have severally advised for the return of Standards Organisation of Nigeria (SON) to the ports and borders rather than the present situation wherein they are only invited when the need arises at the ports to do their work. It is on record that even when their interest is indicated, the products may have been released and exited out of the ports and borders. Indeed the Nigeria Customs operatives may not be conversant and familiar nor experts with matters on quality assurance and standards. Our informed position at the entry points is to state clearly that if we must make gain from the free trade agreement, SON is the roadmap meaning that NMI and SON efficiency are of utmost importance. The other critical infrastructures are steady power generation and distribution, and indeed human resource development and management.

OtherwiseAfCFTA may become an economic suicide for Nigeria.
We therefore recommend as follows to you Mr. President Sir:-

1.Delay the implementation for the next one year.
2.Invite SON management to tell you what shall help them to discharge their statutory duty effectively and efficiently.

3.Engage NAGAFF, CRFFN and our sister associations to make inputs on how best free trade agreement can be implemented operationally at the entry points.

4.The Nigerian Customs as the lead agency of the government in our entry points, should be directed to engage the critical stakeholders in conjunction with SON, NSC and NAFDAC to educate and enlighten the informal sector groups on matters of compliance to Customs regulations and quality assurance and standards of products entering Nigeria. The principle and/or doctrine of “you see something you say something” should be a watchword. It must be a collective effort on the part of government and the people to achieve the desired objective.

May we therefore under the circumstance inform you Sir that inherent abuse on ECOWAS treaties and implementation should be a guide to that of free trade in Africa. Nigeria definitely is a target while acknowledging that we must not be an island.

At this juncture, it has become pertinent to take a flash back into history, especially the ETLS programme, which eventually may have left Nigeria and its economy badly bruised. Nigeria has a large market no doubt. It ended up serving as a dumping ground for products from other African countries which may have repackaged the products originally manufactured outside Africa. Let us take coffee as an example. Coffee is primarily produced in France, but may have been imported into countries like Cote D’ ivoire, but repackaged and re-labelled as being produced in Cote D’ ivoire and exported to Nigeria enjoying zero tariff under ETLS. This is the source of our fear. That this might be the fate of Nigeria as other African countries, that depend solely on imports from Europe and other parts of the world, will import such products into their countries, only to repackage and re-label them and again export them to Nigeria, paying little or no tariff under the AfCFTA.

We therefore urge you Sir, to be circumspect in approving the commencement of the implementation of the AfCFTA. Some safeguard measures as we mentioned above should be put in place first. We wish to remind you that in 1999 – 2001, NAGAFF advocated that the Nigerian Ports must take proactive measures noting that our ports are undergoing second phase of development wherein manufacturing firms started springing up in the ports arena. Truck parks became an issue within the ports. We advised that truck terminals should be established outside the ports on call up system. Nobody listened to us and today the issue of truck parks is a problem.

We also advocated for the establishment of Deep Seaports that can take more cargo and reduce freight rates to Nigeria. We concluded by insisting that the process shall make Nigeria a hub and trans-shipment centre in Africa with all the economic gains. Nobody listened to us till of recent. We are again advising on this issue of free trade and we do hope that somebody will listen to us in the interest of the Nigerian economy. We appreciate the fact that it took you some time to sign this agreement, suggesting that you did some due diligence.

We know that Mr. President meant well for this country but Sir you owe a duty to Nigeria and Nigerians the need to consider the interest of the greater number and the economy.

In totality let it be on record that the Nigeria Customs Service being the lead Agency of the Government in the ports and borders is very strategic in the economy of Nigeria. Therefore the need to take their input for Government trade policy formulations must not be over emphasized because Customs laws are inclusive on trade matters and facilitation. We will not conclude this letter without drawing your attention to the uncommon support the Central Bank of Nigeria may be giving the Organized Private Sector of the economy without due consideration for the informal sector group which constitutes well over 65% of our National GDP. We shall in due course expand our assertion from our vantage location of the entry points of the seaports, airports and land borders of Nigeria.

Mr. President you have always had a listening ear to suggestions made by Nigerians, even though your final decision may be seemingly delayed, we shall be most appreciative, if you would take steps to ensure Nigeria and Nigerians are not short changed in this AfCFTA.

AU, AfDB SIGNS $4.8m AfCFTA GRANT:
The African Development Bank Group has signed a $4.8m institutional support grant to the African Union for implementation of the African Continental Free Trade Area agreement.

The grant was approved by the Group’s Board of Directors in April20019 .It forms part of a series of interventions by the bank in its lead role to accelerate implementation of the free trade agreement, seen as a major force for integrating the 55-nation continent and transforming its economy.

The African Union Commissioner for Trade and Industry, Albert Muchanga, signed for the continental body while Obed Andoh Mensah, who represented AfDB’s Director of the Industrial and Trade Department, signed on behalf of the bank.
A statement from the AfDB indicated on Tuesday.

African leaders meeting in Niamey, Niger in early July launched the implementation phase of the free trade area agreement established in March 2018 after it became operational at the end of May. Currently, 54 states have signed the deal and are set to begin formal trading in July 2020.

“The AfCFTA is going to work and we are confident that by July 1 next year, all the 55 countries would have been state parties – meaning, they would have signed and ratified the agreement and intra-Africa will start,” Muchanga was quoted to have said.
He urged countries to use this period to complete the parliamentary processes.

Muchanga commended the bank’s strong and consistent support to ensuring smooth implementation of the agreement, saying the grant would be used judiciously for the rollout of various protocols relating to the structure and mandate of the AfCFTA secretariat.

The AU currently has an interim secretariat, tasked to provide the organisational structure for the permanent administrative body, its work programme and related issues including its budget. The Niamey summit announced the citing of the AfCFTA secretariat in Accra, Ghana.
Nigeria had signed the pact on July 7 after recommendation from the Presidential Committee tasked with assessing its impact on the local economy.

According to its promoters, the AfCFTA deal has the potential to create the largest free-trade area in the world, uniting 55 African countries with a combined gross domestic product of more than $2.5tn, adding that it is a major force for continental integration and expansion of intra African trade, currently estimated at around 16 per cent.

It is expected to expand intra-African trade by up to $35bn per year, ease movement of goods, services and people across the continent’s borders and cut imports by $10bn, while boosting agriculture and industrial exports by seven per cent and five per cent respectively.

Andoh Mensah stressed that the deal would help stabilise African countries, allow small and medium sized enterprises to flourish, promote industrialisation and lift millions out of poverty.

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