Business
AfCFTA Fund won’t deliver exports without reforms — Freight forwarders
By Cynthia Alo
The Africa Association of Professional Freight Forwarders and Logistics of Nigeria, APFFLON, has warned that Nigeria may fail to reap the benefits of the African Continental Free Trade Area, AfCFTA, despite the Federal Government’s approval of a proposed $1 billion credit facility aimed at supporting exporters and businesses.
The association said that although access to finance is important, funding alone cannot solve the challenges undermining the competitiveness of Nigerian products in African markets.
In a statement yesterday, National President of APFFLON, Otunba Frank Ogunojemite, noted that poor infrastructure, high production costs, multiple taxes, foreign exchange difficulties, excessive port charges and cumbersome export procedures are making it difficult for manufacturers and exporters to compete with their counterparts across the continent.
He said unless these obstacles are removed, Nigeria risks becoming a destination for goods produced by other African countries instead of emerging as a major exporter under the continental trade agreement.
The group, however, commended the Federal Government for approving the proposed facility, describing it as a positive step towards helping businesses tap opportunities created by AfCFTA, but insisted that the country must first address structural problems affecting trade and production before committing huge resources to financing programmes.
Ogunojemite said: “While access to finance is important, funding alone cannot solve the fundamental challenges affecting Nigerian businesses. Before providing large-scale AfCFTA credit support, government must first create an enabling environment that allows local industries to compete effectively with their counterparts across Africa.”
He noted that many manufacturers and small and medium-scale enterprises are already battling harsh operating conditions and may be unable to benefit from the credit scheme if the business environment remains unfriendly.
According to him, several factors that hindered the success of previous trade agreements in Africa have remained unresolved.
These, he said, include inadequate power supply, poor transport infrastructure, foreign exchange constraints, multiple taxation, high port charges and regulatory bottlenecks.
To enable Nigerian businesses to take full advantage of AfCFTA opportunities, the association urged the government to reduce port charges and eliminate unnecessary trade barriers.
He also called for full implementation of the National Single Window project, improvement in road, rail, port and border infrastructure, as well as simplification of export documentation and cargo clearance procedures.
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