Nigeria Signs AfCFTA to Join $3.4 trillion Economic Bloc
Nigeria has Signed Africa continental free trade agreement (AfCFTA) in order to Join an economic bloc valued at $3.4 trillion.
After consultations with stakeholders, President Muhammadu Buhari finally signed up to the trade agreement.
The nation`s new status on the Africa trade agreement was confirmed on Sunday by government spokesperson.
As the largest economy on the continent, Nigeria’s decision to sign the deal is a boost to the pact.
The nation is one of the last countries to commit to the deal.
In signing the deal at the African Union summit in Niger, Buhari called on the continent’s nations to band together to attract investment, grow local manufacturing and combat smuggling.
The African Continental Free Trade Agreement (AfCFTA) aims to unite 1.3 billion people, creating a $3.4 trillion economic bloc that could usher in a new era of development.
The AU says that the African Continental Free Trade Area – called AfCFTA – will create the world’s largest free trade bloc.
It also estimates that implementing AfCFTA will lead to around a 60% boost in intra-African trade by 2022. Only 16% of international trade by African countries takes place between African countries, according to research by the African Development Bank in 2014.
At the moment some of that intra-Africa trade ranges from fresh fish from the Seychelles to petrol from Angola.
Stakeholders however said that with the bloc, Nigeria has a lot to gain from showcasing its goods and services to a wider African market.
The signing of the agreement is expected to boost intra-Africa trade in the next few years.
It would be recalled that the delay in signing the agreement came from the local producers’ agitation that feared they lack comparative advantage in products manufacturing.
Many analysts have said that the the advantages that comes with the agreement outweigh the disadvantages feared by the local manufacturers.
The free trade agreements are designed to cut trade tariffs between member countries.
Tariffs are a form of tax, like a border tax that are placed on goods coming into a host economy as a way to secure local producers from infiltration.
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Those countries within the bloc that have production advantages would be able to export more, and competition would help manufacturers to see beyond the normal pattern they are used to.
Nigeria Signs AfCFTA to Join $3.4 trillion Economic Bloc
