The Federal Executive Council at its meeting on Wednesday approved the ratification of the African Continental Free Trade Agreement.
With the approval of the agreement, Nigeria joins other African nations who have already ratified the agreement to become a State Party to the Agreement, which is expected to be the largest market in the world with the population of about 1.2 billion people.
The Minister of Industry, Trade and Investment, Otunba Adeniyi Adebayo said this in a statement on Wednesday by his Special Assistant on Media, Ifedayo Sayo.
He said with the FEC approval, the Attorney General of the Federation and Minister of Justice is expected to prepare the instrument of ratification for Mr President’s assent for onward transmission to the African Union, the legal depository of all instruments of ratification.
The AfCFTA seeks to create a single market for goods and services and free movement of persons within Africa.
With this ratification, Nigeria is on course to participate in trading under the AfCFTA region.
“This is a huge step forward for the nation, and further demonstrates to the world, Nigeria’s economic leadership position on the African continent,“ he said.
This approval comes less than two months before the effective start date of the AfCFTA implementation scheduled to commence on January 1st 2021.
The AfCFTA which was signed last year and was supposed to take off on July 1, this year, had been delayed due to the coronavirus disease outbreak that has set back negotiations on the protocol for trade in goods, including tariff concessions
Based on projections by the United Nations Economic Commission for Africa, the AfCFTA is expected to boost intra-African trade by between by $50bn to $70bn in monetary terms, with a 40 per cent to 50 per cent increase over the first 20 years of its implementation.
The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product of more than $3.4trn.
In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization.
Estimates from the Economic Commission for Africa suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.
The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.
It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general.
The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.