By Fredrick Wright
Vice President Yemi Osinbajo, has disclosed that Africa’s cross-border informal trade now worth about $93 billion yearly.
Osinbajo, in a message delivered at a ‘Roundtable on Industrialization in Africa’ organized by the Manufacturers Association of Nigeria (MAN) to celebrate its Golden Jubilee, said the African Continental Free Trade Area (AfCFTA) offers limitless opportunities for the industrialization of Africa, therefore authorities across the continent must take the right policy actions to actualize them.
He said 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,” he said.
Speaking on actions that will boost manufacturing, the vice president 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. 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 also noted that another major objective of policies aimed at preparing industries for AfCFTA “must be to ease payments across borders and implementation of the protocols on free movement of persons”.
“It is particularly important in this regard to rapidly operationalise the effort by Afreximbank to establish a Pan-African Payments and Settlement Platform. This will go a long way 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.”
He enjoined manufacturers to strive to become competitive after clearly specified time periods so that they can withstand the danger of stiff competition from imports.
