According to an article in the ThisDay newspaper, stakeholders in the agribusiness expressed concern that the absence of a normalization policy for the country could deprive Nigeria of the long-awaited benefits of African Continental Free Trade Area (AfCFTA) OK.
Stakeholders lamented that Nigerian SMEs seem unprepared to take advantage of the opportunity presented by the CFTA agreement, as they have yet to adopt current global best practices. The Managing Director, Nigeria Agri-Business Group (NABG), Manzo Maigari, noted that compliance and alignment with the global benchmark in standards and trade is currently lacking among Nigerian businesses. According to him, in modern business and commerce, people must be sure of the quality, sanitation and hygiene of what is sold to them before allowing access to their markets, and that is what Nigerian products lack.
The AfCFTA trade agreement, which became operational on January 1, 2021, creates a borderless market for African products. The agreement requires the immediate removal of tariffs on 90% of goods, while an additional 10% of goods classified as “sensitive goods” would be negotiated later. As of January 2022, 41 countries from the 54 African Union Member States (excluding Eritrea) have deposited their instruments of ratification of the AfCFTA. Specifically for Nigeria, the agreement is expected to open up the African market to the country’s leading manufacturing companies to support export sales while increasing the prospects of attracting foreign direct investment along the manufacturing value chain.
However, despite the implementation of the trade agreement, which was originally intended to allow the elimination of tariffs for the movement of most goods between member countries, countries such as the Republic of Benin imposed a tariff transit of an average of 9 million naira per truck on cargoes bound for Nigeria passing through the country by road. To support the trade agreement, AFREXIM has set up the Pan-African Payments and Settlement System (PAPSS) in collaboration with the AfCFTA Secretariat to facilitate cross-border payments in local currencies between African markets.
Obviously, the quality of the products supplied determines the value you get from the commodity market. This is one of the reasons why Nigerian companies are unable to optimize their revenue streams in the commodity market. In response to the call for quality and standardization, the Director General of the Standards Organization (SON), Farouk A. Salim, stated his agency’s commitment, in collaboration with other agencies such as NAFDAC and EFCC, to support the approximately 40 million small and medium enterprises in Nigeria. Medium-sized companies achieve efficient standardization of their products.
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He also urged the National Assembly to increase penalties for non-compliance with standardization in subsequent amendments to the SON law to force manufacturers and importers to learn how to follow the rules.