The Executive Director, Civil Society Legislative Advocacy Center (CISLAC), Auwal Rafsanjani says Small and Medium-sized Enterprises (SMEs) remain critical constituents of Nigeria economy.
Rafsanjani made this known at stakeholders’ sensitisation and consultation on the benefits of the African Continental Free Trade Area (AfCFTA) Agreement in Lagos.
The sensitisation and consultation was in conjunction with Oxfam, Chartered Institute of Taxation of Nigeria (CITN) and CISLAC.
He said it was worthy of note that Small and Medium-sized Enterprises (SMEs) are the backbone of many developing economies.
According to him, they are important contributors to employment, output growth and trade expansion.
“On Jan. 1, 2021, the implementation of the African Continental Free Trade Area agreement (AfCFTA) commenced after it came into force on May 30, 2019.
“This represented the biggest global trade area with a market of 1.2 billion people and a projected cumulative GDP of $3.4 trillion since the creation of the World Trade Organisation (WTO) in 1995.
“Its primary objective is to deepen African economic integration through a single market for goods and services and promote industrial development through diversification and regional value chain development.
“Ultimately, it aimed at providing great opportunities to enhance industrialisation in Africa by removing tariffs on and other barriers to trade, goods and services as well as increase intra-African investment outcomes.
“While the AfCFTA has great potential to support economic development on the continent, some enterprises may not be able to take advantage of the agreement.
“Or compete with an influx of new competitors from other countries within the free trade area, because of internal inefficiencies within businesses or suboptimal business environments.
“These potential challenges for businesses sparked some opposition to the AfCFTA in Nigeria and led Nigeria to be the one of the last countries to sign the agreement on July 9, 2019,” Rafsanjani said.
Quoting the National Bureau of Statistics (NBS) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), he said that SMEs in Nigeria, accounts for about 96 per cent of registered Nigerian businesses.
“It employs about 75 per cent of the national labour force and contributes 48 per cent to the country’s Gross Domestic Product (GDP),” the executive director said.
He said that the Federal Government was currently at the third phase, being the implementation phase of the AfCFTA.
“On its part, it uhas made concerted efforts toward positioning SMEs to harness the numerous benefits of the AfCFTA on implementation through formalisation and engagements with the public sector agencies to strengthen the capacity of SMEs to harness available opportunities,” Rafsanjani said.
He said that in spite of the sensitisation and consultation campaigns in all the geopolitical zones, there was a seeming lack of mass enlightenment on the AfCFTA with just about 30 groups and 2,317 natural people sensitised and consulted on AfCFTA by the Nigerian Office for Trade Negotiations (NOTN).
This, the executive director said, has the institutional framework and foundation for Nigeria’s trade policy infrastructure implementation.
A 2020 survey of 1,804 MSMEs across Nigeria by the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) showed that more than 50 per cent of those surveyed were most concerned about the threat posed by importing cheaper goods competing with local products due to the AfCFTA, while only 20 per cent were aware of the existence of the AfCFTA.
Rafsanjani said that impact of the AfCFTA could not be determined by the government policies alone, but also by how much the private sector leverages the abundant opportunities available in the free trade area in Africa.
He said without an active strategy to ensure that MSMEs were aware of the AfCFTA and put in a position to capitalise on the agreement, the AfCFTA’s positive impact on the Nigerian economy would remain minimal.
“It is to this end that the Civil Society Legislative Advocacy Centre (CISLAC)/Transparency International-Nigeria, in collaboration with the Chartered Institute of Taxation of Nigeria (CITN) and with support from Oxfam in Nigeria convened this one-day sensitisation and consultation engagement on products’ standardisation and available opportunities.
“It is benefit of the AfCFTA, toward promoting competitiveness and export value-addition within the African market for sustainable growth and development of SMEs and the Nigerian economy.
“Thus, it is our hope that this engagement will provide the platform for frank conversations and insightful deliberations that will deepen public understanding and build the capacity of SMEs to leverage the inherent opportunities and benefits of the AfCFTA toward the overall objective,” he said.
Speaking, Adesina Adedayo, the 15th President, Chartered Institute of Taxation of Nigeria (CITN), said that the programme was intended to provide in clear and simple terms without any ambiguity the nitty-gritty of this agreement.
Adedayo said that the programme would also assess its implementation so far and address issues that might have arisen in the course of implementation.
“As you are aware, AfCFTA was established primarily with the objective of deepening African economic integration through a single market for goods and services and to promote industrial development through diversification and regional value chain development.
“President Muhammadu Buhari signed the AfCFTA on July 7, 2019 after considering effects of the agreement on the country’s economy and due consultations with relevant stakeholders.
“The advantages of this agreement are quite enormous,” he said.
According to him, it has the potential of contributing greatly to the movement of capital and natural persons, facilitating investments across borders by laying the foundation for the establishment of a continental customs union at a later stage.
“As the theme of this programme focuses on MSMEs, it is expedient to note the enormous benefits, which awaits Medium, Small and Micro Enterprises (MSMEs) from AfCFTA.
“MSMEs remain critical constituents of the Nigerian economy as they represent 96 per cent of Nigerian businesses and contribute 75 per cent to national employment.
“MSMEs will benefit from access to new markets and the economic transformation that competition promotes.
“As it is with trending critical issues such as this, there have been concerns about the effect AfCFTA would have on the Nigerian economy.
“These concerns can be addressed positively by the government putting in place safeguards to ensure vulnerable industries are protected.
“These safeguards include: improving transport infrastructure and enforcing policies which would see a reduction in the cost of production with much considerations and easier access to credit facilities by the MSMEs.
“This would in turn make goods export competitive and promote rapid growth in industrialisation which in return boost our nation’s economy.
“It is gratifying to note that government is currently addressing issues around the transport sector with huge investments in the rail sector, rehabilitation and reconstruction of key arterial roads across the country.
“The Road Infrastructure Tax Credit Scheme is one of such novel initiatives introduced by government which deserves commendation,” he said.
Adedayo assured participants that the institute would not relent and continue to engage relevant stakeholders toward addressing bottlenecks and ambiguities in the tax system that impact negatively on the sustenance and viability of businesses.
