WED, JULY 03 2019-theG&BJournal-Aurelien Mali, a vice president and sovereign analyst at Moody’s says, as the largest African economy, Nigeria’s membership of the African Continental Free Trade Area will play a key part in the trade bloc reaching its maximum potential.
‘’However, important structural challenges remain. Power generation and logistics infrastructure are weak in most countries in the trade area, both of which play a crucial role in supporting trade and manufacturing in Africa.”
The Moody’s analyst commentary follows news from the presidency that it is ready to go with the rest of the continent on the Africa Free Trade Zone arrangement. His take on the structural challenges also is a reflection of the numerous challenges confronting the country which is struggling to get a much more credible rating from Moody’s.
Moody’s has a stable outlook on Nigeria and assigned a B rating on the government of Nigeria in June this year. The credit rating agency warned at the time that Nigeria’s B2 issuer rating could be downgraded if it concluded that the sovereign’s exposure to a financing shock had materially increased, perhaps because of continued erosion of debt affordability or a material deterioration in the government’s balance sheet in some other respect; or materially weaker medium-term growth, for example as a result of delays in implementing key structural reforms, especially in the oil sector, or continued militancy in the Niger Delta, which undermine the level of oil production over the medium-term.
The Presidency indicated yesterday on its Tweeter feed that Nigeria will be signing African Continental Free Trade Area agreement following months of debate and consultation with stakeholders and manufacturers in the country who raised concerns about the implications for the sector.
President Buhari also expressed strong doubts about the Free Trade Area agreement fearing that it would allow neighbouring countries to flood Nigeria with low priced goods.
The Presidency said that Nigeria will sign the AfCFTA Agreement at the upcoming Extraordinary Summit of the African Union in Niamey, Niger.
The Presidential Committee on the Impact and Readiness Assessment of the Agreement Establishing the AfCFTA submitted its report to President Muhammadu Buhari on Thursday June 27, 2019.
The Committee was inaugurated on October 22 2018 to consider the national security implications of AfCFTA especially with the movements of persons, review smuggling trends, including the potential escalation of smuggling and abuse of the rules of origin and address specific questions such as how AfCFTA provisions interact with legacy bilateral/multilateral trade agreements.
The Committee was also to look into the potential impact on government revenue, coherence between fiscal policy, structural and monetary policies, impact on Nigeria businesses-domestically and regionally, for both trade in goods and trade in services.
According to the Presidency, it undertook extensive AfCFTA stakeholder sensitization and consultations involving 34 groups and associations, engaged 3017 persons, adopted and signed 5 communiqués and 12 private sector groups submitted inputs.
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