THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT (AfCFTA): OBJECTIVES AND BENEFITS TO NIGERIAN NATIONAL INTEGRATION

Abstract

Statehood theory continues to evolve. While some of these developments are deleterious to the state concept, others improve on the state concept and enhance its efficiency. An example of the former is the idea of a free trade agreement (FTA) between nations. The African Continental Free Trade Area (AfCFTA) is an FTA founded in 2018, by African nations. It has the purpose of enabling regional economic integration by dismantling domestic markets trade barriers by member nations. This paper, undertook an analysis of likely benefits of AfCFTA membership to Nigeria. While Africa possessed several regional economic communities, (RECs), these RECs caused market fragmentation by the concurrent existence of different sets of rules. AfCFTA, on the other hand offers a common regulatory framework and reduces market fragmentation. It was established by article 2 of the Agreement Establishing the African Continental Free Trade Area. AfCFTA’s single purpose is a unified continent-wide market for the free movement of goods, services and investments. Nigeria signed the AfCFTA Agreement on July 7, 2019 ratified the Agreement on November 4, 2020, and deposited the instrument of ratification on December 15, 2020, becoming the 34th State Party to ratify the treaty. Nigeria is expected to benefit from its membership of the FTA by its citizens and residents being provided with increased access to less expensive and better quality foreign goods at lower prices as governments reduce or eliminate tariffs. Nigerian, manufacturers and producers are expected to obtain access to a larger market of potential customers or suppliers. On the other hand, the free movement of labour which is key to the success of the FTA will lead to job losses and industry closures in some countries as capital migrates to regions of comparative advantage. The paper concluded by stating that while all the projections regarding AfCFTA are positive, this does not foreclose the possibility of job losses, business failures, capital flight and increased cross-border mobility of criminal elements, terrorists, jihadists, ethnic cleansers, etc.
Keywords: AfCFTA; African Continental Free Trade Area; Customs Union; Free Trade Agreement; Regional Economic Communities