In a significant development for African regional integration, Nigeria recently gazetted and transmitted its ECOWAS schedule of tariff offers for goods traded in Africa to the African Continental Free Trade Area (AfCFTA) Secretariat.
A gazette is an official statement announcing trade commitments that guide businesses, organisations, and citizens.
This move represents a pivotal moment in the continent’s journey towards economic cooperation and shared prosperity. African nations are collectively seeking to reshape their economic destinies through pan-African trade.
Let’s examine the importance of this move within the broader context of African regional integration and the potential of a unified African market.
Key Context About AfCFTA
Before we go further, let’s get some context about the AfCFTA.
The African Continental Free Trade Area represents the world’s largest free trade area, according to the number of participating countries since the formation of the WTO. It aims to create a single market for goods and services across Africa.
The Afcfta was launched in 2021 to help deepen economic integration across the continent. One way to do this is through tariff reductions among member nations. It also involves covering policies around trade facilitation and services.
With this agreement, Africa has a scalable framework that can help actualise the continent’s economic potential. This means that businesses in Africa can make the most of the market opportunity spread across the continent.
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Background story: Nigeria and AfCFTA
Nigeria’s relationship with AfCFTA started off as complex. Initially, Africa’s largest economy showed reluctance to sign the agreement, citing concerns about potential threats to local industries and the risk of becoming a dumping ground for foreign products.
This hesitation reflects the delicate balance between embracing regional integration and protecting domestic economic interests. However, in July 2019, Nigeria eventually signed the agreement, recognising the long-term benefits of participating.
Moreover, the Economic Community of West African States (ECOWAS), of which Nigeria is a key member, represents one of Africa’s most established regional Economic Communities. Since its formation in 1975, ECOWAS has been working towards economic integration, making it a critical building block in the larger AfCFTA framework.
The relationship between these regional bodies and the continental free trade area is crucial to aligning the regions towards a common goal.
As Africa’s largest economy by nominal GDP, Nigeria represents a crucial market for the success of any pan-African economic initiative. Moreover, Nigeria’s move will most likely cause a domino effect and trigger similar actions from other African nations. This could accelerate the implementation timeline for AfCFTA across the continent and provide significant economic benefits.
Understanding Tariff Schedules
Nigeria has now submitted tariff schedules, constituting the foundation of trade agreements. These detailed documents translate high-level political commitments into precise trade policies.
These schedules detail which products will see reduced tariffs and over what timeline, translating policy commitments into actionable trade terms. Although it provides a framework, the AfCFTA is largely theoretical without actions such as tariff concessions and policy changes.
The significance of tariff schedules in international trade cannot be overstated. They provide the practical mechanism that transforms theoretical trade policies into economic reality.
A comprehensive tariff schedule typically includes:
- Baseline tariff rates: The starting point duties before reductions begin.
- Reduction commitments: The pace and extent of duty reductions over time
- Product categorisation: Different treatment for sensitive vs. non-sensitive goods
- Rules of origin: Criteria determining which products qualify for preferential treatment
- Safeguard mechanisms: Provisions allowing temporary protection if imports surge
When a country publishes its tariff schedule, it signals several essential developments.
First, it demonstrates a concrete commitment beyond diplomatic signatures. Second, it provides transparency and predictability for the business community. Thirdly, it creates accountability, as trading partners can monitor compliance with promised reductions. Finally, it often triggers a domino effect, encouraging other participating nations to finalise their commitments.
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African Regional Integration: The Big Picture
Regional economic integration typically progresses through several stages: from preferential trade agreements to free trade areas, customs unions, common markets, and financial and monetary unions.
Currently, Africa hosts eight recognised Regional Economic Communities (RECS), including ECOWAS in West Africa, the East African Community (EAC), and the Southern African Development Community (SADC). These RECS have achieved varying levels of integration. Some, like the EAC, are progressing toward customs unions and common markets, while others remain primarily at the preferential trade agreement stage.
Africa’s integration efforts have historically been fragmented, with multiple overlapping regional bodies making inconsistent progress along this spectrum. AfCFTA represents an attempt to harmonise disparate efforts into a coherent continental framework.
The continent can draw inspiration from the European Union’s integration journey, which has created the world’s largest single market.
Economic Impact of African Regional Integration
The potential economic gains from the successful implementation of AfCFTA are substantial.
According to World Bank estimates, full implementation could boost regional income by 7% ($450 billion) by 2035, lift 30 million people out of extreme poverty, and increase wages for both skilled and unskilled workers.
A more integrated African market of 1.3 billion people will create previously unavailable opportunities of scale for African manufacturers. Over time, this will make African goods more competitive both regionally and globally.
Additionally, regional integration through AfCFTA allows Africa to develop regional value chains that can eventually link to global value chains. This is a better approach than having individual countries try to break into highly competitive global markets alone.
Regional integration also offers unprecedented opportunities for small and medium enterprises (SMES) to expand beyond limited domestic markets. By creating new trade corridors, Africans can develop new intra-African supply chains.
Lastly, and perhaps most importantly, a more integrated African market has the potential to attract greater investment, both from within Africa and internationally. Investors who previously hesitated to enter relatively small national markets may find a unified African market a much more compelling proposition, leading to job creation and technology transfer.
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What are the Next Steps for African Regional Integration?
While Nigeria’s tariff submission marks essential progress, significant work remains to make AfCFTA’s promise a reality across the continent. The immediate focus is on completing negotiations on rules of origin and determining which products will receive preferential treatment under the agreement.
Other efforts include:
- Continuous infrastructure development resulting from public-private partnerships.
- Digital integration and the supporting frameworks to harmonise digital regulations and e-commerce.
- Addressing Investment protocols, competition policy and intellectual property rights
- Robust research networks and policy dialogues to document what works
Conclusion
African regional integration would help the continent in many ways, including;
- Creating markets of sufficient scale to support industrialisation.
- Enabling the formation of regional value chains that can eventually link to global production networks.
- Facilitating knowledge transfer and technological diffusion across borders.
- Providing the framework for cooperative approaches to transnational challenges, from infrastructure development to policy changes and so on..
At Matta, we are not just observing this transformation but actively driving it by providing solutions that help the continent overcome its historical fragmentation, creating a more integrated and competitive economic space.
