Export Digest Newsletter - US-China Trade War Reinforces The Necessity of AfCFTA

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In This Week's Edition of Export Digest Newsletter - US-China Trade War Reinforces The Necessity of AfCFTA

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US-China Trade War Reinforces The Necessity Of AfCFTA

The current trade war that is gathering momentum between the United State and China should be a great lesson for all forward thinking African leaders that are yet to sign the African Continental Free Trade Agreement (AfCFTA). If African leaders think that the developed nations wants us to really develop like them then they must be very naive. Every nation will always want to protect its own interest even if that interest is going to hurt other nations. The slogan America first has taken a centre stage but it seems that some Africans and their leaders are not thinking of Africa first. 

The reality of our world today is that, most developed nations are threatened by the growth and development of the developing and underdeveloped nations. The reasons for this is very obvious to any discerning observers. If Africa become developed, that means we will be producing most of what we consume and consuming most of what we are producing. The implication of this is that, the volume and value of export from developed nations to Africa will be reduced. This will consequently means that their factories will begin to shut down, their income will begin to reduce, their unemployment rate will increase and their government will loose their popularity with the people and so also the next election.

Therefore, in order to keep the developing and underdeveloped nations small they use a lot of strategies which include a Visa lottery and permanent resident programme to cause brain drain and keep African nations small. They use foreign aids to keep the Africans lazy and always look up to them for help. They attach terms and conditions to the foreign aids to hinder growth and development of the African nations. They come up with trade agreement like Economic Partnership Agreement (EPA) from the EU, African Growth Opportunity Act (AGOA) from the US with stringent terms and conditions to keep the African nations small. 

When all these strategies does not work especially for African nations that have leaders that have been liberated in their soul from the destructive effects of slavery and colonization they will start fighting you. They fight you with propaganda, they fight you with tariff and non tariff barriers, sometimes they instigate civil war to fight you. They set standards they know is unrealistic for developing nations to hinder their export like fair trade, organic certification, licensing for marine products and make the processes difficult knowing fully well that most businesses in Africa cannot meet up (this is not to say that African should not upgrade its product quality but the truth is that some of the requirements from the developed nations are not necessary). All these have affected our steel production, wheat production etc in Nigeria. It has caused Rwanda to be banned under AGOA and tariff imposed on their products by the United State because they banned the importation of used cloths and shoes from the US.

So clearly, you can see that the US gave Africa AGOA to ensure that they retain their market in Africa. The developed nations does not give you nothing for something. This is necessitating the speedy implementation of the AfCFTA so we can begin to do more trade among ourselves and thus stimulate growth and development on the African continent. Africans should not expect that trade with developed nations will increase, they should expect to see similar replay of the Rwanda-US trade isues with other African nations that are waking up from their slumber very soon. We need to grow the current export within Africa from the current level of about 18% to an enviable height. It will also grow the African share of world trade from the current level of less than 2% to a reasonable level like the European Union (EU) that contributed about 33% of world trade, North American Free Trade Agreement (NAFTA) contributed about 15%, Association of Southeast Asian Nations (ASEAN) contributed about 7% and the Gulf Cooperation Council (GCC) contributed about 6% in the year 2014. 

Finally, I will like to repeat that the US-China Trade War has reinforced the necessity of speedy implementation of AfCFTA. I will therefore like to plead with the African leaders yet to sign to go ahead and do so and those that have signed should speed up the ratification processes in their various countries. 

Bamidele Ayemibo

bayemibo@3timpex.com

Export Digest Newsletter - Truck Owners Groan Over Increasing Apapa Gridlock

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In This Week's Edition of Export Digest Newsletter - Truck Owners Groan Over Increasing Apapa Gridlock 

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Regards,

Nigerian Manufacturers Grew Non-Oil Export By Over 100% In Q1 Of 2018.

It appeared that initiative of the current administration of President Buhari to diversify the Nigerian Economy has started yielding results. This was our findings at 3T Impex Trade Academy based on the analysis done on the recent data released by the National Bureau of Statistics. According to the data, the contributions of the non-oil export component of the total export done which has remained very low for a long time has started growing very rapidly. The  total non-oil export which was about 4.2% (N171.4Billion) in the last quarter of the year 2017 has jumped to about 11% (N577.6Billion) in the first quarter of 2018. This is also about 100% increase when compared to the same period in 2017. 

This is the first time since 2015 that a quarterly report revealed such a growth in the non-oil export. The previous reports showed that the non-oil export component of the total export from Nigeria in 2015, 2016 and 2017 were 10.5%, 4.0% and 4.6% respectively. This recent growth can be attribute to the surge seen in two major sectors which include Agriculture and Manufacturing sectors. These two sectors alone contribute 86.14% to the overall volume of the non-oil export done during the period under review. As a matter of fact, Manufacturing grew by 684.11% when compared to last quarter of 2017 and it single handedly contributed about 73.5% to the overall volume of the non-oil export sector in the same period. 

This significant growth in the non-oil export sector can be attributed to the diversification drive of the Buhari's administration on one hand but more importantly on the other hand is the fact that a lot of Nigerian Manufacturers are waking up to the reality of generating their own foreign exchange through exportation having suffered greatly from the shortage of foreign exchange that bedeviled the economy of Nigeria during the last economic recession. This affected many manufacturers who largely depend on importation for their raw materials by making them to incur huge losses resulting from increased exchange rate and delay in getting the foreign exchange.

This development has further reinforced the prediction of the 3T Impex Trade Academy that non-oil export is the future of the Nigerian economy and in preparation for this, we are currently driving aggressive export education in Nigeria through our Executive Diploma in Export Business Management and Executive Diploma in Export Trade Finance. The admission for the second batch of 2018 is currently ongoing and the certificate is awarded by the American Institutes of Extended Studies.

This increase in the volume of non-oil export is indeed a great news for the Nigerian economy. If this degree of growth can be maintained throughout the four quarters of year 2018 and beyond it will mean that Nigerian economy is truly on its way to real diversification and thereby building effective shock absorber for the shocks of fluctuation in oil prices, reduction in oil sales or decrease in oil production since these were the major factors that contributed to the last economic recession experienced in the economy.

Bamidele Ayemibo
bayemibo@3timpex.com

Export Digest Newsletter - AfCFTA Update: Safeguards Available For Nigerian Economy

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In This Week's Edition of Export Digest Newsletter - AfCFTA Update: Safeguards Available For Nigerian Economy

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AfCFTA Update: Safeguards Available For Nigerian Economy

The Head of the Nigeria Office of Trade Negotiation (NOTN) Ambassador Chiedu Osakwe recently concluded his tour round the country to sell the ideas and benefits behind the African Continental Free Trade Agreement (AfCFTA) to different stakeholders in the Nigerian economy. This was a fallout of the controversy that trailed the absence of the Nigerian President at the signing ceremony of the AfCFTA. 

The NOTN team was mandated by the president to consult widely with all the stakeholders in different parts of the country. This has made the NOTN to meet with tens of trade groups and also visit the following locations in the 6 geopolitical zones in the country and these include Kano, Benue, Maiduguri, Owerri, Calabar and Lagos. The consultation has been largely successful because it has significantly cleared the doubts and allay the fears of the stakeholders on the wrongly perceived dangers of signing the AfCFTA.

The Ambassador, who lead the Continental team that drafted this agreement was able to assured Nigerians that the AfCFTA is not going to expose the Nigerian economy unduly to influx of foreign goods. He was able to highlight some of the safeguards in the agreement that will make this to be impossible.

Some of these safeguards include the rule of origin. The AfCFTA has increase the level of value addition imported from outside Africa to 60% for the products to be deemed to be of African origin. This will prevent the goods from Europe and Asia from entering Nigeria to kill to local manufacturers who might not be able to compete because of the infrastructural deficit that have bedeviled our country 

Secondly, the state parties have 10% areas of their economy that they can hold back for a number reasons which could include developmental purpose,s National Security, inadequate capacity to compete with imported goods and so on. A list containing the products and services will be agreed upon by the state parties in their countries and submitted to the AfCFTA Secretariat. It is also interesting to note that 

Article 10 of the 

p

rotocol on trade in goods which is on modification of schedule allows state parties to modify these schedules from time to time as dynamics of their various economies demands.

Another very interesting safeguards for the Nigerian economy under the AfCFTA is the Article 16 of protocol on trade in goods. This article is on 

Anti dumping and countervailing measures. This agreement allows state parties to impose duties on goods that are imported into their countries at a price lower than what is obtained in the exporting countries. This might be due to subsidies in the exporting country or market penetration strategies by the manufacturer or exporter. 

Above all is the protocol on Arbitration. This is a very unique feature of the AfCFTA and an improvement on the deficiencies of the ECOWAS Trade Liberalisation Scheme (ETLS). This is because it allows aggrieved exporters to tender their concern with the relevant committee at the AfCFTA secretariat in order to resolve any issue or wrong doings of either state parties or individuals companies in the AfCFTA regions. 

Finally on the safeguards, the AfCFTA has a provision for any state party to exit the from the free trade areas on the African Continental after 5years of signing the Agreement if such a country so desire. This means it is not a forced marriage because we can divorce if it becomes necessary. 

There are many other protocols in the AfCFTA that can serve as a tool to protect the Nigeria economy. I think the Ambassador and his team at the NOTN have gone a long way to convince most of the stakeholders in the Nigerian economy that we are safe under the AfCFTA. It is also worthy of note that we have just 180days from March 21, 2018 to sign this agreement. If we do not sign by then, the rest of Africa will move on and if we intend to join some years down the line, we will have start a fresh negotiation through the World Trade Organization (WTO) before we can be admitted. 

Meanwhile, out of the 44 countries than signed the agreement during the ceremony on March 21, 2018, 3 of them have ratified the law and make their submissions to the AfCFTA secretariat. It is also important to note that 30days after 22 countries have ratified and submitted the document to the 

AfCFTA secretariat, the Agreement will take effect which means the state parties can begin to transact businesses under the law.

In conclusion, if we want to grow our economy to an enviable height, if we want to create more jobs for our youths, if we want to create markets from Agro processors and manufacturers in Nigeria, if we want to retain our pride of place on the African Continenta, then signing of the AfCFTA is the way to go.

Bamidele Ayemibo

bayemibo@3timpex.com

AFED: 3T Impex Commenced Shipment of Products to UK

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In This Week's Edition of Export Digest Newsletter - AFED: 3T Impex Commenced Shipment of Products to UK

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