A decent case for integration

The news headlines have long since moved onto other stories but the FGN has to decide its final position on the African Continental Free Trade Area (AfCFTA). It would not sign the pact forming the area in March (Good Morning Nigeria, 27 March 2018), following pressure from labour and the organized private sector, which maintained it had not been consulted. The previous administration, in contrast, had held sensitization programmes and training sessions for manufacturers and exporters.


  • The lively domestic debate has brought emotive talk of globalization and protectionism. We hear that the FGN has to sign up because Nigeria is the largest economy in Africa and must, therefore, take the lead. It should sign only if membership is beneficial in its view.
  • A related argument is that the smaller economies have tended to sign up and that the larger states should have nothing to fear. This is facile: the small states had very little choice.
  • The area will develop into a customs union, incorporating the free movement of people and capital. Subsequent steps could bring monetary and political union. Governments are free to disembark when they chose but will be aware that pressures to accept increasing integration can be intense.
  • The AfCFTA means new pan-African institutions for heads of state and ministers. This duplicates similar bodies in sub-regional organizations, the future of which is unclear.
  • The average African tariff is said to be 6.1%, and UNCTAD has estimated the total collected annually at US$4.1bn. For the FGN this loss is not as important as it might be, given the patchy record in collecting customs revenue.
  • African companies within the area will be able to source their raw materials and intermediates free of tariff from fellow members. Not all those imports are available within Africa, however.
  • A good reason for signing in our view is that the area will have negotiating clout in trade talks, and will not be subjected to divide-and-rule tactics. On balance we think that the FGN should join, mindful of the reality that the benefits have been inflated in the debate and will only emerge over time.
  • We had thought that AU member governments had until this September to sign up to the pact establishing the AfCFTA. We now understand that the negotiations continue for 18 months and that the area becomes a reality once the various treaties have been ratified.

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