New Telegraph

December 10, 2023

AfCFTA: Border reopening signals $3.4trn economic bloc reality

The decision by the Federal Government to reopen four of the closed Nigerian borders has bolstered the economic growth expectation under the African Continental Free Trade Area (AfCFTA) agreement. The Federal Government during the week announced the reopening of the land borders in a bid to resume trade along the corridors.

The AfCFTA implementation by the 54-member nation was postponed due to the Covid-19. If implemented as expected by January 2021, it is expected to create a $3.4 trillion economic bloc with 1.3 billion people across Africa and constitute the largest new trading bloc in the world.

President Muhammadu Buhari on Wednesday ordered the immediate opening of the land borders through a directive made public by the Minister of Finance at the end of the virtual Federal Executive Council, FEC, meeting. Land borders to be opened are Seme in the Southwest, Illela in Sokoto State, Maigatari in the Northwest, and Mfun in the South South.

The border closure had elicited reactions from various stakeholders including local and international investors, who considered it inimical to their businesses. For the Manufactirers Association of Nigeria (MAN), the closure dealt an incalculable blow on its members as goods worth billions of naira were left stranded at the various border points. Only recently, the National President of the Borderless Alliance and the newly elected Co-Chair to the African Regional Food Trade Coalition, Ziad Hamoui, also hinted in Ghana of the imminent opening of the Nigerian borders as announced by President Buhari. Speaking on Eye on Port, Hamoui was quoted by Ghanaweb as saying that Nigeria had ratified and deposited the African Continental Free Trade Area Agreement, which he believes may influence the decision to reopen the land borders. “It remains to be seen how fast Nigeria can buy into the idea of not only the reopening of its borders but also of its internal market.

Not only to the ECOWAS Trade but also to the AfCFTA trade,” he quizzed. In August 2019, Nigeria unexpectedly closed its land borders to trade in goods, explaining that it wanted to put an end to smuggling, particularly of rice and other products from Benin, which crosses their border illegally. According to the President of the Ghana Union of Traders Association, despite claims of earnings made in the aftermath of the border closure, Nigeria shot itself in the foot by introducing such harsh policy, indicating that Nigerian economic operators have since suffered the repercussions of that harsh policy. “They have now come to the realisation that they cannot live in isolation, even though they consider themselves giants.

The true fact is that their people are suffering,” he expressed. He explained that Nigeria’s argument for such a decision was flawed and defies the objective of intra-continental trading and therefore not surprising that the country has inadvertently made situations worse for its economy and economic operators.

The Immediate Past President of the Ghana Institute of Freight Forwarders, Kwabena Ofosu Appiah, touching on the matter, from an AfCFTA perspective said it is about time, African leaders looked at building its sea and land transport capacity. He emphasized on the need to bridge the logistics gap which he argued will drive the vision for AfCFTA. “You would want to consider vessel movement between African states, but where are the vessels? Now, it is cheaper for one to transport cargo to from here to Europe than to Liberia. For me, the AfCFTA is so good, but it would have to be thought through holistically,” he opined. Hamoui urged Ghanaian industries to up their game in areas of pricing, quality, industrial cost and financing in the advent of the AfCFTA. “We have to look at many factors that may threaten our benefitting of the opening up of the African market,” he said.

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