Three years after the first meeting, specifically on June 2015, at the African Union Summit in South Africa, Consultations and negotiations for establishing the treaty commenced with all 55 African Union states by 2017, which was the deadline for the treaty to be adopted.
However, many member nations requested for more time to continue consultations on the potential impacts on their economies, meaning that the deadline must be exceeded on account of this request.
The scope of the treaty covered agreements on trade in goods, services, investment, and rules and procedures on dispute settlement, including a range of provisions to facilitate trade, reduce transaction costs, provide exceptions, flexibilities and safeguards for vulnerable groups and countries in challenging circumstances.
The draft agreement was finally signed on March 21, 2018 during the 18th Extraordinary Session of the Assembly of AU Heads of State and Governments in Kigali, Rwanda.
About 44 of the 55 African countries signed the treaty.
The signatories included host Rwanda, Niger, Angola, Central African Republic, Chad, Comoros, Congo, Djibouti, The Gambia, Gabon, Ghana, Kenya, Mauritania, Mozambique, Cote D’Ivoire, Seychelles, Algeria and Equatorial Guinea.
Others include Morocco, Swaziland, Benin, Burkina Faso, Cameroon, Cape Verde, Democratic Republic of Congo, Guinea, Liberia, Libya, Madagascar, Malawi, Mali, Mauritius, South Sudan, Uganda, Egypt, Ethiopia, Sao Tome and Principle, Togo, Tunisia and others.
Nine others that did not sign the agreement included Nigeria, South Africa, Zambia, Tanzania, Burundi, Eritrea, Botswana, Lesotho and Namibia. South Africa has reportedly signed the treaty few weeks ago, leaving eight others, including Nigeria still weighing the options.
Nigeria said it was delaying its signature to the agreement to widen and deepen domestic consultations, to ensure all concerns were addressed, as it would not sign any agreement that would not fairly and equitably represent the interest of Nigeria and indeed, her neighbours.
The treaty aims at taking advantage of 1.2 billion population of the continent with a combined Gross Domestic Product of more than $2 trillion to create a single continental market for goods and services.
Some argue that the treaty would impact on government revenue and social welfare, as elimination of all tariffs among African countries would erode the trading states’ treasury by up to $4.1billion annually and deepen poverty, with millions of Africans potentially exposed to starvation and death.
Others, particularly among the poorer economies are afraid the benefits in the free trade area may not be equitably distributed among economies.
The International Monetary Fund says Nigeria is the largest economy in Africa with GDP of $405 billion, followed by Egypt ($332 billion) and South Africa ($295 billion). Nigeria, with a population of about 180 million is also Africa’s largest market.
The Nigeria Labour Congress (NLC) kicked against signing the treaty, warning that doing so was “extremely dangerous” as it would open the country’s seaports, airports and other businesses to unbridled foreign interference and domination.
Similarly, the Manufacturers’ Association of Nigeria (MAN) also rejected government’s move to sign the treaty until proper consultations and inputs of all interest groups have been received on issues concerning market access and enforcement of rules of origin were addressed.
But, a former president, Olusegun Obasanjo, has taken an opposing position as he expressed disappointment that Nigeria was not among the 44 signatories to the treaty in view of its pivotal role in promoting the vision.
President Muhammadu Buhari says Nigeria will only be signatory to the Continental Free Trade Agreement if the nation’s national interests as well as regional and international obligations are balanced.
He said: “Trading is important and the terms of trade is important therefore, there is a need to ensure our national interests as well as our regional and international obligations are balanced.
“Accordingly, I directed the relevant agencies to conduct intensive and extensive consultations across the nation on the Continental Free Trade Agreement.
Nigeria is a federation of 36 states plus FCT Abuja, 774 local governments and millions of interested stakeholders who must be consulted with and listened to, in order to ensure an optimum outcome.
Significant progress has been made in these consultations.
The team has met key stakeholders across six geo-political zones. The responses have been diverse as would be expected.
However, one clear message has emerged which is that any trade agreement must be both free and fair.
This fairness is achievable and we will work towards it”.
He stated that his administration had adopted a policy of inclusive economic growth and was determined to attain this by reducing the nation’s over reliance on crude oil.
“To date, we have invested aggressively in infrastructure to support our growth potential in agriculture and solid minerals.
We are also empowering many Nigerian entrepreneurs in the entertainment and digital economies to mention a few,” he stressed.
However, Minister of Power, Works and Housing, Babatunde Fashola (SAN) said Nigeria should consider the countries that have already signed the AfCTA.
He said: “If the decision on whether to sign or not were mine, I will look at the countries that have signed.
The interesting thing about the countries that have signed is that they are one-city countries such as Rwanda (Kigali), Niger (Niamey) and Ghana (Accra) unlike us where we have cities like Kano, Kaduna, Abuja, Port Harcourt, Lagos and Owerri.
A Senior Advocate of Nigeria and the vice chair, Nigeria Bar Association Section on Business Law, Mr. Seni Adio, said the potential benefit of the AfCFTA are numerous.
According to him, such agreement would give rise to approximately 1.2 billion trading bloc in the African continent with a volume of approximately $2.5 trillion in 2018 alone.
His words: “The case for and potential benefits that AfCFTA portends are numerous including without limitation, the following: the birthing of a trading bloc of comprising of approximately 1.2 Billion Africans, a trading volume of approximately $2.5 Trillion in 2018 and foster innovation, competitiveness, specialization and collaboration.
“Others are that it would cause constituent States to invest in infrastructure, in Power, Transportation, Agricultural, Technology, Justice Delivery and Prompt Resolution of Disputes to name a few.
It would also correct the deplorable level of Intra-Africa trade that has stagnated at a miserly 17 percent. Not only is that unacceptable, frankly it is outrageous.”
According to Adio, increased competition and Pan-African integration will definitely foster meritocracies.
Having said that, the legal luminary did not also waste time in listing some of the countervailing concerns of skeptics, adding that those concerns are not completely unfounded.
His words: “The high cost of manufacturing in Nigeria due to the de minimis (minimum) level of power, compounded by a very poor transportation network and, generally, obsolete public infrastructure is a challenge.
It might also give rise to the potential for “dumping” artificially low priced products in Nigeria because of our teeming population, which means when sales are aggregated such actors will still make substantial profits.”
He pointed out that another major drawback of the agreement could be on the issue of migration/immigration and the attendant security challenges that it is likely to pose to our already traumatized security architecture.
The SAN added that although he did not consider it a serious problematic issue, language and cultural barriers, could particular be a challenge.
“Distilled to its essence, the case for integration is extremely compelling. Whatever issues there are can be resolved or, alternatively, substantially blunted through implementing rule-making and policies.
“Also, certain aspects of the agreement can be implemented in phases.
Indeed, from the vantage point of the law profession, we should enthusiastically embrace the agreement because of the deal-making opportunities it would provide our commercial lawyers and law firms, as well as further enhance the already burgeoning and enviable position of Lagos as a destination for commercial dispute resolution through Arbitration,” he concluded.
It is believed that having taken her time to weigh the pros and cons as well as the concerns of critical stakeholders, whatever decision taken by Nigerian government would be at the best interest of the country.