AfCFTA: Why Nigeria must hit the bull’s eye developing SMEs—Otunba Folarin

File Photo: L-R: Barrister Margaret Orakwusi, Chairman, Shipowners Forum, Otunba Kunle Folarin, Dr. Dakuku Peterside, DG NIMASA, and Hajia Lami Tumaka, Head of Special Duties NIMASA,  at a Maritime Industry Event in Lagos.

Otunba Kunle Folarin, an expert in maritime matters and trade economics, has in a review said the focus of the Africa Continent Free Trade Area agreement (AfCFTA) is developing the Small and Medium Scale Enterprises (SMEs) through the advantage of lower production cost, service or deliveries to other countries.

Folarin spoke in an interview recently during the African Day of the Oceans and Seas  celebration, organised by the Nigerian Maritime Administration and Safety Agency (NIMASA) in Lagos.

Folarin said that while the essence of the free trade agreement aims at integrating the economies of the continent, considering the policy of a single currency, customs union, trade and tariffs as well as efforts at removing barriers to trade facilitation, Nigeria must now consciously begin to develop its SMEs to satisfy local needs and export within the region.

He warned that it was not enough for Nigeria to desire benefits from the agreement, rather, all necessary infrastructure and policy for building strong SMEs should be put in place and consciously driven sustainably.

Folarin, therefore, advised that Nigeria should develop areas where it has comparative advantage like the maritime trade and agric exports, considering how well shipping could benefit from it. He said: “You have to look at where you have comparative advantage. The maritime sector, export of agriculture. Sadly though, we are still importing a lot of small-scale industry materials from China.

“However, this is the right time to use the advantage of our large population as a nation, when we can boost manufacturing and enjoy the economic benefits of markets across the region.

“So, if we develop the small-scale industry and we dominate the market, and we have a competitive edge in the market, it means that our maritime sector will benefit, because we are going to start with increase in shipping. They won’t be looking for foreign-going ships, competing with Europe and Asian shipping line. They will be thinking of coast-wise traffic, starting from Dakar to Gabon, West and Central Africa.

“If it is good, we can now go to the Mediterranean, the North African countries, Morocco and Egypt. If it gets better, we can go through Durban and go to East Africa. But basically, it is the capacity to benefit. If you build ports and no cargo what will happen? If you build economies as big as Nigeria and no Nigerian shipping interest built to have the capacity to take part, what is the effect?" he asked.

Folarin, therefore implored the Nigerian Ports Authority, ship owners, the manufacturing sector too that can be shipping out with lower tariffs to ensure that the cluster drives its competitive edge profitably in the sub-region.

He also wants Nigeria to beware of consequences that could arise from the advantages it could enjoy, considering that industrialised countries could shift their manufacturing to their allied African countries to come and compete with Nigeria.

It would be recalled that President Muhammadu Buhari on July 7, 2019, signed the Agreement establishing the African Continental Free Trade Area (AfCFTA) at the opening of the 12th Extraordinary Session of the Assembly of AU Heads of State and Government in Niamey, Niger.

Buhari had also emphasised the need for policies that would promote African production among other benefits.