Trade within ECOWAS to drop further, defying AfCFTA agenda
16 October 2019 |
3:05 am
With the continued closure of the Nigerian land borders for almost two months, members of the Organised Private Sector (OPS), have raised concerns about the rising effects on intra-African trade as well as on the nation’s macro-economy, in relation to inflation and job losses.
ECOWAS building in Abuja
With the continued closure of the Nigerian land borders for almost two months, members of the Organised Private Sector (OPS), have raised concerns about the rising effects on intra-African trade as well as on the nation’s macro-economy, in relation to inflation and job losses.
While the African Continental Free Trade Agreement (AfCFTA), seeks to develop a common market for 1.2 billion people, technical and non-tariff barriers continue to serve as red tapes to negotiations under the trade deal.
Specifically, the Lagos Chamber of Commerce and Industry (LCCI), said while some gains and benefits have been recorded due to border closure, losses in terms of job loss, rising inflation, and declining rate of legitimate export within the sub-region remain a source of concern.
“As we celebrate the benefits, we should also count the costs. Jobs have been lost, prices have skyrocketed, legitimate exports to the sub-region have been halted, intermediate products for some manufacturers have been cut off, some multinationals companies have been de-linked from their sister companies in the sub-region.
“The economies of border communities have been paralysed with consequences for unemployment and poverty. Over 90% of Nigeria’s trade with the West African sub-region is by road. We export manufactured products as well as agricultural products – detergents, toothpastes, plastic products, steel products, kitchen utensils, grains, ginger, and onions, among others. We also undertake many exports to the sub-region.
“These are sources of livelihood for Nigerians doing legitimate businesses. There are also thousands of transporters who make a living from these legitimate trading activities. These are costs that would run into hundreds of billions of naira. We must weigh the costs and benefits. Most often, we do not count the cost of government policy on the citizens and businesses.
“We should not underestimate the contribution of trade and commerce to the economy of the country. Distributive trade sector accounts for about 15% of the nations GDP, which is estimated at 20 trillion naira. Traders play a major role in the value chain of the real sector activities in the economy. The trade sector is perhaps the largest employer of labour in the Nigerian economy,” the LCCI stated in its comments shared by its Director-General, Muda Yusuf.
To address the underlying issues fuelling smuggling, the LCCI advocated the need to fix the structural, institutional and policy shortcomings that perpetuate the phenomenon of smuggling and increases vulnerabilities.
“Unless we address these shortcomings, it would be difficult to put an end to the problem of smuggling. We need to address weak institutional capacity to police the country’s vast borders across the country; address porosity of nation’s borders because of the expansive nature of the borders stretching over 4000 kilometres of land borders and 853 kilometres of coastline; and address failure to deploy technology to manage our borders and international trade processes.
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