Business Journal


AfCFTA: Why Nigeria May Lose Out in Agro-export to 1.2bn Consumers-Okakpu

Captain John T. Okakpu
ABX World Limited

The African Free Trade Area (AfCFTA) has the potential to lift millions of people out of poverty and end food insecurity on the Continent, but Nigeria has not been positioned as the ‘real’ stakeholder for agro-export under this agreement.
Captain John T. Okakpu, MD/CEO, ABX World Limited dropped the hint over the weekend, stressing that the country participation and gain from AfCFTA, in the agricultural value chain, depends on the effectiveness and implementation of government policies, especially in the agricultural sector.
He said that AfCFTA will form a 3.4 trillion dollars economic bloc, which Nigeria cannot afford to be out.
Available reports show that trade between African nations in agricultural products as a percentage of Africa’s total agricultural trade remains below 20 percent long, one of the lowest in any region.
Total trade between African nations was only 2 percent in the period 2015–2017, compared with 67 percent in trade between European countries, 61 percent in Asian countries, and 47 percent in the Americas, according to UN trade agency UNCTAD.
Now, AfCFTA intends to change the narrative. It has created the world’s largest free trade area, representing the 1.2 billion consumer market, and mandates states to remove tariffs and non-tariffs in order to boost shipments and services between nations, and boost economic growth in doing so.
“If you look at the trend, Africa exports agricultural products such as tomatoes, onions, vegetables, cocoa, coffee, cotton, yam tobacco and spices to the nations of the world to earn significant foreign exchange. But the continent imports important foods such as cereals, vegetable oils, dairy products and meat in large quantities. Now, our neighbouring countries have positioned themselves to benefit from AfCFTA by building robust logistics and cost-effective export systems.
“So, looking at it critically, our logistics cost cemented our losses on AfCFTA unless we address it now”, Capt. Okakpu said.
Capt. Okakpu who chairs a 28-member Nigeria Agro Set-Up Committee inaugurated by the Federal Ministry of Industry, Trade and Investment (FMITI), with a mandate to reinvigorate broad national agricultural activities across the country, added that capacity building for farmers, regulators and top government officials is another major factor that must be considered for the country to get her acts together.
He said that the most basic of agro export requirements is the knowledge of Good Agricultural Practices (GAP) which is completely missing in Nigeria.
“In addition to other benefits, it teaches and equips farmers on standard Farming Bookkeeping which helps farmers know, track and compare total costs of farm inputs and inflows from sales and in so doing help to maximize their profitability.
“As it is now; we will continue exporting our products to the world market through another country and definitely will get worse under AfCFTA. For every N1 we are going to make, those countries our products are transiting will be making N10. There’s no shortcut here or lobbying; it’s grass root, that grassroot are the farmers with Certifications/Traceability of their farms and products.
“That notwithstanding, knowledge of GAP enables farmers to increase their yields per hectare by employing latest, world class and more efficient farming techniques.
“Similarly, farmers who have Global GAP certifications and training are automatically linked to off-takers who buy off their agricultural farm produce right from the farm gate at international market rates thus saving most farmers from losses derived from low sales and prices that ultimately lead to loan defaults.
“The regulators and other government officials also need to be informed on why cost should be reduced; on why farmers deserve cost-effective interest loans; why the logistics value chain must be rejigged if we are going to benefit from AfCFTA,” he said.

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