We must not be trade partners only, but production partners – Aremu
The General Secretary of the National Union of Textile, Garment and Tailoring Workers of Nigeria, Issa Aremu, in this interview with COLLINS OLAYINKA argues that the Nigerian government must renegotiate the labour aspect of the African Continental Free Trade Agreement (AfCFTA) with a view to protecting existing jobs and creating new ones, while also rebuilding infrastructure in order to maximise the benefits for citizens.
What are the implications of the signing of the African Continental Free Trade Agreement (AfCFTA) by President Muhammadu Buhari?
It is better late than never. It is also better to be conscious and not rush into signing yet another trade pact. So, the biggest economy in Africa joining the continental trade agreement is remarkable. I commend the President for his cautious approach to the pact. I think the President made the point that while Nigeria is committed to the trade pact, it cannot be at the expense of domestic production. Don’t forget that Nigeria signed many trade treaties and agreements. When you are running an economy that faces crisis of production such as Nigeria with industries shutting down, there is the need to be cautious.
Meanwhile, trade agreements are beneficial to countries that are producing and exporting. I am not denying the fact that Nigeria is producing because it is the biggest economy in the continent, but it is producing below optimal capacity majorly because of massive importation. Therefore, we need to be wary of any trade agreement that will worsen the situation.
On the whole, it is better for African economies to trade with themselves rather than relying on aids from abroad. Between trade and aids, Africa should go for trade. So, we cannot deny the importance of trade, more so, in a globalised world. What we need to make clear is that with minimal production and jobs availability facing the continent today and in the case of Nigeria, we must make sure that the objectives of the continental trade pact is made to be a win-win for all the countries.
President Buhari has promised to create 100 million jobs over the next 10 years, and I think the trade pact should facilitate achieving the target by making sure that our industries become competitive for domestic market, as well as for export. The African trade agreement is the biggest in the world so far, and it is hoped that this will help us have access to market. I also hope that the agreement will not make us lower tariffs because I know that once there is trade agreement, lowering of tariffs is an option. I think we need to be conscious about that. I also do hope that there is enough protection in this agreement. We should not forget that Nigeria has about 43 items that we have restricted foreign exchange to support because we have the capacity to produce those items. Now, how the trade agreement will connect to this domestic agenda will be very interesting in the case of Nigeria, since President Buhari said we are in this agreement without compromising domestic production.
For Nigeria also, while we need to be careful because it is the biggest economy on the continent, we also have the largest purchasing power. Under the trade agreement, we must ensure we don’t become a dumping nation for other African countries, as well as Europe and China. So, it is not only signing trade agreement that is important, we also need to manage the process in a way that enhances domestic production, encourage export and create jobs.
There have been concerns about some items contained in the Economic Partnership Agreement (EPA) by the European Union, which Nigeria declined signing, getting into the AfCFTA. What are your views?
What is very important now is that Africa must learn to trade with itself. Presently, intra-African trade is less than 20 per cent. We trade more with Europe, Americas and Asia. Certainly, there have been a number of agreements that are in place that are meant to service the interest of Europe. We now need to examine this agreement clause by clause to ensure that some of the items that are contained in the EPA do not stage a comeback into the AfCFTA.
What that means is that Nigeria needs to be proactive and offer leadership. I think we came into the agreement a bit late and this is where I think that our initial hesitation was unnecessary. I say that because Nigeria ought to lead the campaign and host the Secretariat, so that we are able to monitor proceedings. Now, we have lost the race for the Secretariat that was initially allotted to Nigeria. But that does not dim the fact that Nigeria is Africa and Africa is Nigeria. With a 200 million-people market, everybody knows that no agreement would fly without Nigeria. I think other African countries must realise that if the agreement does not benefit Nigeria, all Africans are losers. A prosperous Nigeria with its size is a prosperous Africa. Nigeria was not only an investment destination in the 70s and 80s; it was the destination for all Africans. For instance, it was when Abacha took Nigeria to the World Trade Organisation (WTO) in the 90s and the subsequent opening up of our market that undermined the textile industry. That experience showed that African countries could not be in the club with world traders when they cannot produce for their own economies.
The most important thing is to return to production that will benefit Africa. Nigeria must add value to its natural resources in order to maximise the benefits of the trade pact. For instance, Nigeria must add value to its crude oil by refining here at home and assume regional supplier of petroleum products to our neighbours. My fear is that we don’t have productive capacity in refining, therefore opening up our market would make us a dumping ground for not only petroleum products but also garments because China can penetrate Nigeria through Ghana, The Gambia and others. In any case, that would mean opening up our market for Europe and China and not for African countries. Not only should Africa have a common market, we should have a common customs, currency and the likes. But we cannot achieve these if the level of production in the continent is very low.
After signing the agreement, there should be a continental meeting to reindustrialise the continent by enhancing production. So, we must not be trade partners only, we must be production partners.
How ready is the textile sector to tap into the opportunities that the agreement will offer, going forward?
Definitely, any trade opening is an opportunity for industries for obvious reasons. Don’t forget that until recently, we used to supply the domestic market not only in Nigeria, but the immediate West African sub-region. Many of the companies that were operating in Nigeria had branches in Ghana, Togo, and the Ivory Coast. But we lost all of that to the crises we have at home. We are facing the problem of energy, which is responsible for non-competitiveness of our prices. We also have the problem of smuggling; that is even more dangerous than importation of goods because they actors do not pay duties and sell at cheaper prices.
While this agreement is a unique opportunity for us to reinvent the industry, it can also be a threat if we don’t quickly address the infrastructural gaps that exist. I think the signing of the agreement means that we must now look at how to fix the infrastructural gaps in order to maximise the advantages inherent in the market that would be opened to us in Africa. Ultimately, it means we must produce at home. Government must encourage patronage by promoting made-in-Nigeria goods.
We are a bit lucky in the textile sector as we now have a Cotton, Textile and Garment Policy (CTGP) that has been put in place in conjunction with manufacturers, cotton growers and organised labour as represented by our union. So, the signing of this agreement should now be another reminder for us to implement the contents of that policy.
We should be able to grow cotton locally by empowering the growers. We are happy to report that the Central Bank of Nigeria (CBN) is providing cheaper seedling for them. Government must also guarantee security so that farmers can mobilise into the market because physical insecurity is also threatening production.
The price of gas for manufacturing purposes should be friendly. Nigerians would be shocked to hear that textile operators pay for gas in dollars. There is no preferential treatment for manufacturers, including textile industry. So, I think the gas department of the Nigerian National Petroleum Corporation (NNPC) must come up with appropriate price for the manufacturing sector. So, if we want to trade with Rwanda, Kenya, Ethiopia and so on, we must examine the production environment in those countries and either match them or surpass the standards set by them. For now, Nigeria is still facing the challenge of ease of doing business.
We must improve on the training and retraining of the workforce because if we are going to trade with fellow Africans, apart from making the goods and services competitive, the workers must also be competitive. The Organisation of Trade Union Unity (OATUU) and the trade union centres must look at the labour components of the agreement and ensure that workers are not put at risk. Yes, we must produce in Africa, yes we should trade with ourselves, but African workers must produce the products. There must be minimum acceptable conditions for work, just as there are in the EU and we must replicate that here so that the trade does not worsen poverty.
Secondly, the type of technology we are going to apply for production must absorb more workers. It is fine to talk about the fourth industrial revolution with Artificial Intelligence at the base of it, but with the massive youth unemployment confronting Africa, what kind of technology are we going to apply for production? Will it be labour-intensive or capital intensive so that we can realise the objectives of full employment we are looking for?
For me, what will solve these problems for us? It is the same method of bringing all major stakeholders together into a committee before the agreement was signed. I think that that committee should continue to exist so that we will be examining the gains, the benefits and threats as they emerge in the course of implementation. The consultations cannot be once and for all. It has to be continuous for as long as we want to realise the objectives of this pact. So, business, labour and government must periodically review how we can realise the benefits of the trade pact. We need to maximise the benefits and minimise the threats that may arise to undermine the objectives.
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