Following the eventual signing of the African Continental Free Trade Agreement (AfCFTA), companies around the world including some in Nigeria are said to be making moves to relocate to nearby countries and bring in their manufactured products back to Nigeria, Africa’s largest market.
These companies are said to be heading to Ghana, Togo and Benin Republic to maximize the gains of the AfCFTA which is about moving goods and services across Africa without hindrance.
To stem the tide, some investors have urged the FG to reactivate the Export Free Trade Zones to maximal operations so as to form manufacturing clusters for the African market with some heavy concessions for at least initial 10 years.
Sources said though the much-talked about AfCFTA may have taken Nigeria over two years of official delay but that it has been on the table for about 20 years with Nigeria evading the scheme.
Some investors in the South-South under the aegis of the Rivers Entrepreneurs and Investors Forum (REIF) led by Ibifiri Bobmanuel want Nigeria to act immediately or regret what is coming,
Bobmanuel who admitted that REIF was in the forefront of urging Nigeria to open its borders said it did so believing it would make the FG do the right things to compete in Africa before signing it.
“Yes, the agreement comes with a lot of opportunities and jobs but we needed to be ready for it. From the lay man’s point of view, you look at the Ease of Doing Business Index in Africa; where does Nigeria stand? That is what should matter. Nigeria is not doing well on this. What are the items to consider? Consider how prepared or how hospitable your business climate is. How free is it? We have bottlenecks in Nigeria. Look at power; there is no serious supply because we cannot boast of 12 hours stretch in 30 days.
“Nigeria just can’t compete: If you look at other sectors like infrastructure; we are extremely poor. Look at the legal framework, well, fairly well but comparing it with other countries in most of our competitors in Africa, you find we are far behind. These point to the fact that Nigeria is just not ready. We are only ready in wanting to grab the opportunities but we are not ready to compete.
“Some small countries such as Niger and Benin Republics (that we use to supply) are far ahead of us in regular power supply. Some have 24-hours light. If you now open our borders to AfCFTA, you see we are not ready for the potentials.”
He said every African country would now have access to Nigerian market just like the EU with one custom system, one currency, etc. If we are going to compete that way, it is not going to favour Nigeria. It simply means that investments that are ordinarily in Nigeria and foreign direct investments (FDIs) that should come into Nigeria would obviously migrate to better climates in Africa.”
He revealed that some companies he knows in the Garden City were planning to relocate to cheaper economic belts and bring back their goods to Nigeria. “Today, our company (BobTrack) has invested heavily in Nigeria and looking at money we spend on security, power, water, infrastructure, etc, it is not going to be favourable for us to continue in Nigeria. It would be better to migrate to Benin Republic and bring in the goods to Nigeria because Nigeria is the largest market in Africa. This is what most manufacturers look at.
“The result will be that Nigeria will become the dumping ground in Africa. The moment the borders are reopened, it will be a rush. The amount the Nigerian Customs makes for Nigeria (about the second highest revenue earner for Nigeria), if you open to AfCFTA, this would crash.
“What would have compensated should be jobs, but jobs are going to migrate away from Nigeria to other African countries because every investor first looks at suitability of climate. How do you calibrate a climate? You would consider security, lowest cost of power (the amount of money companies spend on power takes the bulk of their annual budgets), infrastructure (roads, housing, etc), taxes, etc. If you add up all of this and calculate, look at Nigeria and other countries such as Togo, Ghana, Chad, South Africa; it’s no need comparing.
“Today, major companies are heading to Ghana. It provides them better climate and shorter distance to the market they look at in Nigeria. NISSAN (motors) is going to Ghana. Toyota already in South Africa is now going to Ghana. Volkswagen is doing same. It points to one thing; stay in Ghana, supply the Nigeria market.”