Nigeria’s economy needs to step-up its production capacity to benefit fully from the newly launched African Continental Free Trade Agreement, a business analyst and professor of economist at the Ahmadu Bello University, Peter Njiforti, has said.
The analyst said this in an interview with THE WHISTLER.
The AfCFTA which was signed in 2019 and was supposed to take off on July 1, 2020, had been delayed due to the coronavirus disease outbreak that has set back negotiations on the protocol for trade in goods, including tariff concessions.
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The United Nations Economic Commission for Africa, said that the AfCFTA is expected to boost intra-African trade by between $50bn to $70bn in monetary terms, with a 40 per cent to 50 per cent increase over the first 20 years of its implementation.
In preparation to the kick-off of the trade bloc on January 1, this year, the Federal Government reopened its land borders which it shut- down in 2019.
The government also approved the 2020 Finance Act with targeted tariff reduction to support strategic imports and serve as a boost to economic activity.
Nigeria’s Economic Sustainability Plan which would help businesses deepen penetration across the continent earmarked N634.98bn to boost the agricultural sector and its value chain, a sector critical to benefit from the 54 member bloc.
For the continent’s largest oil producer, the plan would also promote manufacturing and local production at all levels and advocate the use of Made in Nigeria goods and services, as a way of deepening the country’s presence in the continent.
Njiforte said, “We are not yet producing enough to the extent that we can take advantage of selling to other countries so that our naira can appreciate in value.
“Our production capacity is still low, especially in the agric sector. We are producing and we are not yet able to meet domestic needs let alone exporting.”
Nigeria is currently faced with the most challenging economic downturn in its history just as the global economy on the impact of the Covid-19 pandemic.
Njiforte said the country needs to increase its production capacity, a move which would help it harness the benefits of the world’s largest trade bloc.
“If we increase our production capacity, the naira value will appreciate naturally. Even if the naira remains week as it will still be to our advantage because consumers will rush to buy our products,” said the analyst.
He said stepping up production alone would stimulate the growth of Africa’s largest economy.