AfCFTA: Trade Pact With Benin Will Create More Jobs- Buhari

By Nwangwu Uba

Officials of the ministry of Agriculture and Rural Development  appears to have taken advantage of President Muhammadu Buhari,  decision to drag Nigeria to join the much talked  about African Continental  Free Trade  Area, AfCFTA. on Sunday, July 7, 2019, at the African union , AU,  12th Extra Ordinary  Submit, in Niamy, Niger, to reposition   the farmers in order  to benefit from the trade agreement  with the Republic of Benin.

Going by the calculation of the officials of the ministry over 500,000 jobs would be created with the launching of the trade pact,Operational Zone in the country. The Agricultural products that had been approved could be exported be exported  to the West  African  neighbouring country include cocoa,  cotton, cement, leather, cashewnuts, sesame, shea butter, palm oil, fertiliser, petrochemicals, and rubber among others.

 Segun Awolowo, the  Executive Director, Nigerian Export Promotion Council , NEPC, who was said to have been  instrumental in giving reasons why  Nigerian should join  the  AfCFTA, club   was said to have identified 22 non oil products   that could be traded at the Free trade Area to the advantage of the country.

According to the NEPC, Executive  Director, the non oil exports  could fetch the country about  $30 billion annually. He was said to have repeatedly briefed the President  who was impressed  that he has no option but to make up his mind to sign the  AfCFTA  document  in Niamy  last Sunday.

He was said to have gone a step further sign a trade agreement  with Republic of Benin to be export the  products to Benin, the West African  neighbour. Patrick Talon, the Benin, President, according to an eyewitness account  at the signing ceremony at Niamy was very happy to enter into the trade pact  with Nigeria which has the market instead of  spending the country scarce foreign exchange reserves in importing such items from Europe or Asia.

Note the NEPC boss had cited cocoa   which many describe  as being in great demand  in Europe, China and  the United states of America, USA, and other African markets.  He, however, lamented that  the country at present only produces  less than 300,000 metric tons, compared to 900,000mt  and two million mt, pushed into the  International cocoa markets annually by Ghana and Cote  d’Ivoire  respectively.

Patrick Talon: President Of Republic of Benin

Awolowo , the NEPC, helmsman,  is optimistic that by joining of the AfCFTA,  cocoa  and Shea  nut and Cashew nut   farmers  would be forced to  take advantage of the country’s land mass to raise production  that could compete with producers in other parts of Africa.

Perhaps, to ensure that Nigeria farmers benefit from the new Continental market, he has suggested to  the Central Bank of Nigeria, CBN,  to initiate a programme  that could encourage the Banks grant  the  plantation owners and individual  farmers low interest  loan to be able to raise their  production output.

An elated NEPC boss who could not hide his feelings that the country had at long last joined  the AfCFTA, after several  months  of dragging its feet,  said the agency are currently  working  with the relevant ministries, agencies and  Departments,  to achieve the purpose  of joining the larger African market. Recall, that  the CBN,  had earlier announced an  initiative  on four Agricultural products  where the farmers  could enjoy  low interest  rates loans in order to go into commercial farming to raise their production.

Investigation by The Value  News shows that between 2018 and now, the Commercial Banks also had  devised   loan packages  under the CBN, financial intervention measures at a single digit interest rate for both for  individual and commercial farmers. Take for instance , Access Bank, which was said to  have made available   over N240 million to finance Agriculture  in the country.

  An official of the Bank who spoke  to The Magazine  disclosed that   apart from  giving out loans  to the farmers, the bank is  ready  to help them   to succeed in the business  to be able to repay the loans.   Under the CBN intervention  Scheme, which are categorised  into  the Micro , Small and Medium, scale Enterprise Schemes, SME,  The maximum amount of loan that could be given out, ranges between N50 million and N2 billion.

 The individual farmers, according to the Bank sources  could get as much as N50 million  loan while the Commercial farmers could  access  the bank  loan for as much as N2 billion. The situation is not different what is happening in the  United Bank For Africa, UBA, regarded as one of the biggest Commercial Banks in Africa or Zenith Bank, one of the new generation Banks  that is making appreciable impact in the nation’s Agricultural sector.

The Banks  may have been disbursing the low interest rates loan to the farmers based on the apex Bank  Agricultural financing intervention policy that had  enjoined the them  to give such loans to farmers in the country  at five percent interest rate to  enable them  raise their production.

 Until he vacated office last April, Audu Ogbe, a former minister of Agriculture and  Rural Development who was  said to have also influenced  the  CBN in  bringing the lending rate to five percent  was said to have monitored the Banks to ensure they comply with it.

  He may have supported the financial institutions to  impose  severe penalty  on defaulters  to recover the loans to make provision for other farmers who may have keyed up  for such low interest rate loans to support their farming business.

It is  instructive to note that before  the CBN intervention measures came into effect,  the Banks  had   pegged their interest rate on loans  at  about 18 percent, thus, forcing many farmers  to scale down their operations as they could not approach  the Banks for such loans.

Recall that the former minister had repeatedly said that  ”Agriculture  and solid minerals would  remain  the only  alternative  sectors  which the government could use to diversify the economy   to survive  under  the current economic situation triggered by the recession  last year .

It is not surprising why  financial analysts believe that   Nigeria decision to join AfCFTA,  despite the initial fear of unfair trade would go a long way to raise the level of  profit for farmers  in their export of Agricultural products to Republic of Benin and other African countries. Nigeria had  joined as the 53rd member  of  the African Union, AU, Economic group while  Benin, joined as he 54th, thus bringing  the total number of African countries that had  endorsed it to 55 excluding Eritrea, for now.

At present , a total of 26  African countries, were said to have deposited   their instruments of ratification with Gabon , being the latest country to do so. The AfCFTA , according to AU, sources  was said to have been  opened for Signature  by the Authority  of  Heads of States and Government of the member countries   at the 10th  Extra Ordinary  Summit of the AU,  hosted   by Rwanda on March 21st, 2018 but Nigerian remained hesitant to endorse it.

In spite of the fact that  the country has finally endorsed AfCFTA,   the Katsina  state born Nigerian President  was said to have made a passionate appeal to member countries   that the trade must be fair to all. ”Nigeria wishes to emphasis  that free trade  must be free trade”, he had said.

 He had every reason to worry because of the French speaking countries, way of doing business,  Particular, Benin, Cote d’iVoire, Senegal and  Togo, which still  depend so much  on France, their colonial master. There are fears that they could   import  manufactured or Agricultural products   from the country, china  and China, repackage it as being  made in Benin  and export to Nigeria in the spirit of AfCFTA. 

 Hameed Ali, a retired Army Colonel and Comptroller General, Nigerian Customs Service, NCS, who is not ready to take chances   by allowing Benin to take advantage of the trade pact to turn Nigeria as a dumping   ground  was said to have  put  Muhammed  Uba Garba  , Comptroller , Seme Command and  other land Border Staions Comptrollers including    Comptrollers , Federal Operations Units, FOUs , and CGC, Strike Force, accross the country, on the alert to ensure that third party  cargoes  were not shipped  into the country from Benin.  This  may have informed why  Muhammed, the Seme, Customs boss and his Enforcement officers   very thorough in checking out the details of all  transit cargoes  from   other countries into Nigeria, through  Cotonou port, Republic of Benin and other ports in the West African sub-region.

Prior to the Nigerian  endorsement of the  AfCFTA document,  the Seme Customs Comptroller  had  approved the seizure of  three trucks laden with  transit cargoes of  bottled water imported from the Asian country of China while conducting 100 percent physical examination  at the Examination Bay  of the  Seme-Krake Joint Border Premises by his men.

 The three trucks had carried   627 cartons  or 7,524 bottles of Chinese table water valued at about N3.043 million. The seizure of the foreign bottled waters may  have informed the reason while  the  Customs Comptroller had  Charged  his officers  to ensure that  that ”illegal importations  of Contrabands  through the Command  is curtailed”.

insiders informed  The Value News  that the Beninoise  Customs Authorities, may have learnt their lesson from the discovery of the Chinese imported bottle water loaded  in three trucks  that they  are very careful  about the  type of transit  cargoes allowed to  enter into the Nigerian market  through the Seme-Krake, Joint Border to void attracting sanctions from AU , managed  AfCTA, or encouraging Nigeria to quit free trade market  because of unfair trade.

Leave a Reply

Your email address will not be published. Required fields are marked *