Osinbajo outlines how businesses can leverage AfCFTA
Speaking at the opening of the private sector in Nigeria roundtable dialogue on the potential impact of AfCFTA, organised by the Nigerian Employers Consultative Association (NECA) and some development partners in Abuja, Vice President Yemi Osinbajo declared that the trade agreement has the capacity to boost intra-African trade and is expected to deliver an integrated continental market, consisting of 1.27 billion consumers with an aggregate GDP of $3.4 trillion.
The Vice President, who was represented by the Minister of Industry, Trade and Investment, Adeniyi Adebayo, added that as the largest economy in Africa, Nigeria has the potential to greatly increase its trading volumes, production capacity, and generation of foreign investments.
However, he lamented that as a country, Nigeria can only fully benefit from this opportunity if its businessmen and women are adequately prepared for the impending changes that will affect the business environment.
“It is necessary that we understand the full-scale impact that AfCFTA will have on all people and businesses, especially in terms of job creation and economic activities. We need to effectively utilise the opportunities that will be created by this trade agreement to develop our local production capacity and achieve our industrial aspirations,” he explained.
The Vice President was quick to admit that as a government, it is fully aware of the challenges confronting small and small-medium enterprises in the country and is taking steps to address the obstacles.
His words: “We understand that Medium and Small Scale Enterprises (MSMEs) face a lot of challenges when they try to scale their business and capture a larger share of the market. These challenges include access to funding, access to markets, ability to attract quality talent, relatively high cost of operations and the burden of regulatory compliance.”
He maintained that the vision of the Federal Government is to eliminate the identified barriers to growth and improve their chances at succeeding in a post- AfCFTA economy.
He added: “Accordingly, we have established the MSME policy to drive the growth and competitiveness of Nigerian MSMEs. We have also concluded a landmark $1billion syndicated term loan through the Bank of Industry to provide affordable loans to MSMEs. Also, we have developed the MSME portal to provide MSMEs with wider access to market and the opportunity to be matched with customers.”
On her part, the Minister of Finance and National Planning, Dr Zainab Ahmed, who bemoaned the inability of MSMEs to contribute meaningfully to the nation’s exports despite contributing 49.8 per cent to nominal GDP, said the Federal Government is taking urgent steps to alleviate the binding constraints limiting MSMEs participation in cross-border trade.
She hinted that two pilot initiatives – MSME Agreement Programme and Digital e-Commerce initiatives – were identified in the course of the National Action Committee (NAC) on AfCFTA implementation, which was set in 2019 by President Muhammadu Buhari with the objectives of engaging stakeholders and prepare them for the operationalisation of the AfCFTA.
Following COVID-19 disrupting the operation of MSMEs, she hinted that the Federal Government put in place initiatives to alleviate the impacts of the pandemic.
“Several interventions were introduced in the Economic Sustainability Plan to support MSMEs. These include the reduction of NAFDAC products registration and administrative charges for license renewal, the creation of a survival fund to give payroll support to struggling businesses and the creation of N100 billion credit facilities. The interventions to support MSMEs in the ESP are complemented by strong fiscal policy actions delivered via amendments to key provisions in extant tax relief to MSMEs,” she stated.
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