Connect with us

Economy

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

Published

on

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.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Economy

African Economy Set for Steady Growth: 4% Projected for 2025

Published

on

Nigerian Breweries - Investors King

Experts are forecasting a robust growth trajectory of 4% for the continent in 2025.

This optimistic projection was highlighted during the ongoing Afreximbank annual meetings, incorporating the Africaribbean Trade and Investment Forum, held recently in Nassau, The Bahamas.

Yemi Kale, Group Chief Economist and Managing Director of Research and International Cooperation at Afreximbank, presented the 2024 African Trade Report and Economic Outlook, saying the African Continental Free Trade Area (AfCFTA) is significant in driving economic integration and growth.

The projected growth rate of 4% for 2025 reflects a steady recovery path for Africa, building on the expected 3.5% growth anticipated for 2024.

This positive outlook comes at a crucial time when African economies are navigating challenges posed by global economic dynamics, including inflationary pressures and supply chain disruptions.

Kale underscored the resilience of intra-African trade, which expanded by 3.2% in 2023 despite a 6.3% overall contraction in Africa’s trade volumes.

This resilience is a testament to the AfCFTA’s potential to bolster regional trade ties and reduce dependency on external markets.

The Afreximbank report also delved into macroeconomic environments, trade patterns, and sovereign debt sustainability dynamics, providing policymakers and business leaders with actionable insights to navigate complexities in global markets effectively.

Nomusa Dube-Ncube, Premier of Kwazulu-Natal, highlighted Africa’s modest share of global GDP and manufacturing output, emphasizing the untapped potential within intra-African trade.

She noted that while Africa currently accounts for only 3% of world trade, intra-regional trade is steadily increasing, indicating a growing economic ecosystem within the continent.

Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC), echoed the sentiment, advocating for enhanced trade between Africa and the Caribbean.

The ITC projects trade in goods and services between these regions to reach $1 billion by 2028, underscoring the mutually beneficial opportunities for economic expansion.

Continue Reading

Economy

Nigeria Sees 95% Surge in Food Imports Despite Emergency on Food Production

Published

on

Zambian economy

Nigeria’s food import bill has surged to a five-year high in the first quarter of 2024, despite the federal government declaring a state of emergency on food production.

Data from the National Bureau of Statistics (NBS) reveals a 95.28 percent increase in food imports to N920.54 billion from January to March, compared to N471.39 billion in the same period last year.

This alarming rise comes amid soaring food inflation, which hit a record 40.5 percent in April, reflecting a 15.92 percent year-on-year increase.

The sharp inflation has left many Nigerians struggling to afford a balanced diet, exacerbating the food security crisis in Africa’s most populous nation.

In March, President Bola Ahmed Tinubu emphasized the government’s commitment to self-sufficiency in food production, stating that Nigeria would not rely on imports to stabilize prices.

“We will not allow the importation of food but rather turn the lack in the country into abundance,” Tinubu declared. However, the latest import figures suggest that this goal remains elusive.

The NBS Foreign Trade Statistics report highlights that the value of food imports via maritime, air, and land routes surged 29.4 percent from N711.4 billion in the fourth quarter of 2023.

Major agricultural goods imported included durum wheat from Canada and Lithuania, valued at N130.26 billion and N98.63 billion, respectively. Frozen blue whitings from the Netherlands accounted for N16.67 billion.

Wheat imports alone constituted N519.75 billion of the total food import bill. The average cost of wheat imports, a significant driver of the food import value, increased by 33 percent compared to the previous quarter’s value of N391.01 billion.

The rising importation of wheat reflects its popularity among Nigerian consumers amid skyrocketing prices of close substitutes like garri and rice.

Overall, Nigeria’s total imports for Q1 2024 amounted to N12.64 trillion, representing a 39.65 percent increase from N9.05 trillion in Q4 2023 and a 95.53 percent rise from N6.47 trillion in Q1 2023. Food imports accounted for 7.3 percent of total imports during the period under review.

The bulk of Nigeria’s imports came from Asia, China, Europe, America, and Africa. Mineral fuels topped the import category with N4.44 trillion, representing 35.09 percent of total imports.

Machinery and transport equipment followed with N3.17 trillion, contributing 25.08 percent, and chemicals and related products at N1.79 trillion, making up 14.13 percent of total imports.

Despite the federal government’s initiatives to boost local food production and reduce dependency on imports, the latest data underscores the persistent challenges facing Nigeria’s agricultural sector.

Continue Reading

Economy

Ethiopia Boosts Spending by 21%, Eyes IMF Program for Economic Relief

Published

on

Northern Ethiopia - Investors King

Ethiopia has announced a 21% increase in its 2025 budget, marking the first budget since defaulting on a Eurobond payment and committing to economic reform discussions with the International Monetary Fund (IMF).

The nation’s Finance Minister, Ahmed Shide, revealed the new budget details to lawmakers on Tuesday, outlining plans to spend 971.2 billion birr ($16.9 billion) in the fiscal year starting July 2024.

The increased budget reflects Ethiopia’s commitment to addressing its economic challenges head-on. Despite the heightened expenditure, the fiscal deficit is projected to remain stable at 2.1% of gross domestic product (GDP), unchanged from the current fiscal year.

Financing the Deficit

Minister Shide outlined a plan to cover the 358.5 billion-birr deficit through a combination of local and foreign borrowing.

The domestic borrowing component will be managed via government treasury bills and medium-term bonds. Shide emphasized that until substantial external donor support is secured, Ethiopia will continue to rely heavily on its domestic markets to finance budget deficits.

“While the government has secured some external financing from the World Bank and the European Union, negotiating an IMF program will be crucial to alleviate pressure on local banks and secure overall debt relief,” said Giulia Filocca, a senior analyst at Standard & Poor’s for sovereign and international public finance ratings.

IMF Program and Economic Reforms

An agreement with the IMF is seen as a pivotal step for Ethiopia. The nation failed to remit a $33 million coupon payment for its $1 billion bond in December 2023, leading to agreements with some creditors, including the Paris Club, to suspend debt repayments.

In exchange, Ethiopia is expected to reach a staff-level agreement with the IMF, which will likely include economic reforms such as devaluing the birr currency.

“Our expectation is that an IMF program will be signed this year, but the timeline remains unclear due to ongoing political developments and challenges over foreign-exchange reforms,” added Filocca.

Budget Highlights

The new budget includes 451.3 billion birr for recurrent spending, 283.2 billion birr for capital expenditure, and 236.7 billion birr allocated for regional subsidies.

The government projects income of 612.7 billion birr, with tax revenue expected to contribute 502 billion birr and non-tax income 61.6 billion birr. Sector budget support is anticipated to bring in 7.3 billion birr, with aid and grants expected to add 41.8 billion birr.

Economic Outlook

Ethiopia’s economy is forecasted to expand by 8.4% in the coming fiscal year, up from an expected 7.9% growth rate in the current period. The budget increase is designed to support this growth trajectory by enhancing public investment and stimulating economic activity.

“Our partnership with the IMF and other international financial institutions will be key to ensuring Ethiopia’s economic resilience and sustainable growth,” Minister Shide concluded. “We are committed to implementing the necessary reforms to secure a brighter economic future for our country.”

As Ethiopia navigates its economic challenges, the government’s proactive approach to increasing spending and engaging with the IMF reflects a strategic effort to restore fiscal stability and drive long-term economic development.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending