Vice President Yemi Osinbajo has said the African Continental Free Trade Area (AfCFTA) offers limitless opportunities for the industrialisation of Africa if the authorities across the continent make the right policies to actualise them.
He also called for the rapid operationalisation of the efforts by Afreximbank to establish a Pan-African payments and settlement platform.
He said it would help in creating the desired continental payments system and also in facilitating cross-border informal trade which is estimated to be about $93 billion per annum.
In a statement released by his media aide, Laolu Akande, Prof Osinbajo stated this in a message he delivered yesterday at a “Roundtable on Industrialisation in Africa,” themed: “Positioning African Industries for Economic Transformation and Continental Free Trade”, organised by the Manufacturers Association of Nigeria (MAN) to celebrate its Golden Jubilee.
Osinbajo said policies to boost trade in Africa include the protection of local industries and improving value chains.
The vice president said, “For certain, the AfCFTA is indispensable if industrial development is to take off in Africa because it offers wider markets and economies of scale which are essential for manufacturing to be competitive.
“We must take policy actions to create an environment in which businesses can thrive. To start with, we must adopt the right type of macroeconomic and industrial policies.
“It is important for African governments to provide a stable macroeconomic environment which avoids and smoothens out volatility in prices, sharp deteriorations in the current account and budget deficits and of course, rapid accumulation in debt burdens.”
On actions that will boost manufacturing, Osinbajo said on the industrial side, policies like tariffs, quotas, subsidies and non-tariff barriers which protect our infant industries so that they can create jobs and enable learning are vital.
He added that well negotiated rules of origin are important in the context of the free trade agreements as they are key to preventing trans-shipment and the deflection of trade. He noted that without them, firms from non-state parties could set up simple labelling operations in one member state with a view to shipping already finished products to another member state without really adding any value.
Osinbajo observed that it is important for MAN to involve itself in an advisory capacity to government negotiators “as we go further into the rules of origin negotiations (these rules negotiations have, of course, started), but I think as we go on, we should get more contributions and advice from MAN.”
“Our manufacturers must also strive to become competitive after clearly specified time periods so that they can withstand the ever-present danger of stiff competition from imports. In other words, while our manufacturing industries must be nurtured and supported, they cannot remain infants forever,” the VP added.
Meanwhile, Osinbajo will leave Abuja today on a short visit to Arusha, Tanzania, where he will be received by his Tanzanian counterpart, Dr Philip Mpango.
While in Arusha, Osinbajo will visit the African Court of Justice and Human Rights (ACJHR), an African Union (AU) agency, among other engagements before he returns to Abuja on Monday.