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AfCTA: Nigeria Can no Longer Sign Agreements Without Understanding, Says Buhari

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Buhari on arrival from London
  • AfCTA: Nigeria Can no Longer Sign Agreements Without Understanding, Says Buhari

President Muhammadu Buhari on Monday said Nigeria could not afford to go back to the days of signing agreements without understanding and planning for the consequences of such actions.

Buhari said this while inaugurating the committee saddled with the responsibility of assessing the impact and readiness for the Africa Continental Free Trade Area Agreement.

The presidential committee has the Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah, as its chairman, and the Chief of Staff to the President, Abba Kyari, as co-chairman.

The President recalled that a few months ago, he directed a nationwide stakeholders’ engagement on the AfCFTA to understand the true impact of the agreement on Nigeria and Nigerians, considering the existing domestic and regional policies relating to trade.

He listed the key issues raised by stakeholders during the consultation as abuse of rules of origin; smuggling arising from difficulties in border controls; un-quantified impact of legacy preferential trade agreements; and low capacity and capabilities of local business to conduct international trade.

Buhari listed others to include high cost of finance; insufficient energy; and inadequate transport logistics infrastructure.

The President stated, “Our ERGP is addressing these issues. Nonetheless, we are determined to break away from the past practice of committing Nigeria to treaties without a definite implementation plan to actualise the expected benefits, while mitigating the risks. “We cannot go back to the days of signing agreements without understanding and planning for the consequences of such actions, and our country being the worse off.

“Your task as members of the AfCFTA Impact and Readiness Assessment Committee is to address the issues raised during the nationwide stakeholders’ consultations on the AfCFTA.”

He added, “You are expected to develop short, medium and long-term measures that will address any challenges arising therefrom.

“I look forward to receiving from you in 12 weeks, a clear roadmap for Nigeria as it relates to the AfCFTA.”

Buhari argued that many of the challenges facing Nigeria were caused by the country’s inability to produce its most basic needs.

He attributed the recent recession experienced in the country to overdependence on external factors.

He said the recession was a clear case of why Nigerians must aspire to be self-sufficient.

The President stated, “For too long, our domestic productive capabilities were neglected in favour of imports. Nigeria was using its hard-earned oil revenues to create jobs offshore instead of developing the manufacturing potential of our very vibrant, young and dynamic population.

“Many of our challenges today, whether relating to security, unemployment or corruption, are rooted in the fact that we have not been able to domesticate the production of our basic requirements.

“The recent recession, which was as a result of our overdependence on external factors, is a clear case of why Nigerians must now aspire to self-sufficiency.”

Buhari said the present administration’s Economic Recovery and Growth Plan focused on the revival of key job creating and import substitution sectors such as agriculture, mining, manufacturing and services.

To ensure that the ERGP is seamlessly implemented, he noted that the government had commenced a number of structural reforms through the Presidential Enabling Business Environment Council; the Industrial Policy and Competitiveness Advisory Council; and the Nigerian Office for Trade Negotiations.

According to him, the benefits of these reforms are being felt as the government’s economic policies are creating meaningful jobs for the young population, assuring national food security and improving the competitiveness of the economy to position export trade as an engine for economic growth.

However, Buhari said while the government must look inwards for certain solutions, it had not lost sight of regional and international trends, especially on trade where global dynamics were shifting and changing at a rapid rate.

This, he said, meant that as the government planned for the long-term, it must also be flexible enough to respond to short-term shocks that could upset economic diversification and backward integration plans.

Earlier, Enelamah gave the terms of reference of the committee.

He said, “Following consultations, the terms of reference of the Presidential Committee on the Africa Continental Free Trade Area Impact Assessment and Readiness are: assess the potential cost and impact of the Africa Continental free Trade Area AFCTA for Nigeria in relation to the benefits; identify the short, medium and long-term measure to prepare Nigerian businesses for the take-off of the AfCTA trading group and a backup plan that covers selected scenarios; and view the trade remedy options to safeguard the Nigerian economy form predatory and failed trade practices.”

The minister added that an updated trade policy was being prepared for Nigeria and the draft would be ready for review by the end of the year.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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Economy

ICPC Says Nigeria Loses $10bn to Illicit Financial Flows 

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The Independent Corrupt Practices and Other Related Offences Commission (ICPC) says Nigeria accounts for 20 per cent or 10 billion dollars (N3.8 trillion) of the estimated 50 billion dollars that Africa loses to Illicit Financial Flows (IFFs).

Chairman of ICPC, Prof. Bolaji Owasanoye, said this during a virtual meeting to review a report on IFFs in relation to tax, Mrs Azuka Ogugua, spokesperson for ICPC, said in a statement released in Abuja on Friday.

The ICPC Chairman said, “the African Union Illicit Financial Flow Report estimated that Africa is losing nearly 50 billion dollars through profit shifting by multinational corporations and about 20 per cent of this figure is from Nigeria alone.”

The ICPC boss explained that taxes played “very strategic role in the nation’s political economy.”

He said the objective of the meeting was to improve on the awareness on IFFs, especially in the areas of taxation.

The ICPC boss added that the meeting would give participants the opportunity to openly discuss how to effectively use the instrumentality of taxation to curb IFFs through risk-based approach.

“Risk-based approach, that is: monitoring and audit; due process in tax collection; structured tax amnesty framework skewed in public interest; data privacy; timely resolution of audits and payment of tax refunds and intelligence sharing among revenue generating, regulatory and law enforcement agencies,” he said.

Owasanoye also stated that for the contemporary tax man to remain relevant, he must build his capacity in areas of technology management, solution architects and an astute relationship manager.

The Executive Chairman of Federal Inland Revenue Service (FIRS) Mr Muhammad Nani, expressed concerns that IFFs posed a serious threat to the Nigerian economy as the act robbed the nation of resources that were needed for development.

Nani declared that tackling IFFs would expand the country’s tax base and improve revenue generation, which was required for development.

He consequently pushed for policy reforms that would make it difficult for “capital flights” from occurring so that the country would be placed on the path of growth.

Other discussants at the event identified weak regulatory framework, opacity of financial system and lack of capacity amongst others as some of the factors that fuelled IFFs.

The discussants emphasised the need for capacity building of relevant stakeholders as one of the ways to stamp out illicit financial flows.

They commended ICPC for leveraging its corruption prevention mandate to open a new vista in IFFs discourse in Nigeria. (NAN)

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