AfCFTA, mechanism for local industrialisation, says LADOL MD …Warns against turning Africa dumping ground
Managing Director/CEO of LADOL, Dr. Amy Jadesimi has thrown her weight behind President Muhammadu Buhari over Nigeria’s signing of the Africa Continental Free Trade Agreement AfCFTA, saying the continental agreement should be utilised as a mechanism to promote local industrialisation not only in the country, but also in Africa as a whole.
She however insists that everything must be done to ensure that the continent was not turned into a dumping ground for cheap products manufactured in China, US or Europe, as the agreement must offer incentives to boost Africa’s manufacturing sector.
Recall that after more than one year of delay, Nigeria had last month signed the continent-wide trade agreement, supercharging a pact that supporters including the LADOL-boss believe could transform business across Africa. The agreement aims to remove 90 per cent of tariffs to create a single market with free movement of goods and services.
Speaking with Financial Times on what the agreement means for Nigeria and Africa’s trade, and how it must work to benefit the people and economies of African nations, Dr. Jadesimi, said the deal remains an important milestone for Africa.
She also presented her insightful view on the agreement, insisting that there is need for a continental-focused solution designed to make the trade agreement a mechanism for tangible economic growth focusing on local industrialisation, job creation and development.
“As Africa’s largest economy, most-populous country, biggest crude producer and cultural powerhouse, Nigeria has long been seen as essential to any pan-African deal, which has had broad support among business leaders across the continent. But President Muhammadu Buhari, a protectionist at heart, heeded calls from his country’s labour and manufacturing trade groups to study the deal’s effects before signing.
“We need a continental-focused solution that is developed by the African Union, and targets making the trade agreement a mechanism for local industrialisation.
“That should be the aim of this trade agreement, rather than just something broad and high level about economic growth or prosperity; those things won’t come if, underlying all of this, we do not create jobs and lift our economies through industrialisation” she said.
Supporters also argue that the AfCFTA has the potential to spur economic growth in a bloc of nations with a combined Gross Domestic Product GDP of more than $3tn, creating the world’s largest free trade zone.
But skeptics such as Jadesimi however argue that a major challenge remains that any such pact must offer incentives to boost Africa’s manufacturing sector or it will fail; a development that could turn the continent into a dumping ground for cheap Chinese, US or European goods.
They also question how under-resourced governments, newly deprived of that tariff revenue will be able to afford to upgrade poor infrastructure.
“Are we going to create an entirely new paradigm for trade, that is Africa-centric, that is controlled by African countries, and that would be dis-incentive to foreign companies and countries outside of the continent from importing, are we going to do that?” she questions. “That’s going to be really tricky.”
Experts also believe that the agreement must contend with history of regional trade agreements that have largely flopped and done little to bolster trade integration/ The AfCFTA will therefore need to be harmonised with eight such regional pacts.
They have also argued that beyond the issue of whether the cost of an open market outweighs the benefits to specific countries, there is also the question of whether it is possible for Africa to overcome its structural challenges to trade.
The African Union summit in Niger in July was a landmark moment for the pact whose roots stretch back decades. Although the deal officially came into force on May 30, 2019, the implementation of any final agreement is at least three years away and specifics on everything from rules of origin to intellectual property must be agreed between a diverse group of largely fragmented economies.
Dr. Jadesimi CEO of LADOL, a $500 million Industrial Free Zone., holds MBA from Stanford University, MA (OXON) and BMBCh from Oxford University). She was a Commissioner for Business & Sustainable Development Commission. Amy got financial training at Goldman Sachs & Stanford Graduate School of Business & medical training at Oxford University. Her accolades include being voted the Young CEO of the Year (2018) by the African Leadership Forum, an Archbishop Tutu Fellow, working to reduce maternal mortality, Young Global Leader (WEF), Rising Talent (Women’s Forum for Economy and Society), 20 Youngest Power Women in Africa (Forbes), Top 25 Africans to Watch (Financial Times), named as one of the 2018 Most Influential People of African Descent (Under 40) Worldwide, in support of the United Nations International Decade for People of African Descent (UN IDPAD), named as one of 50 Influential Women in Business by The Africa Report, Jeune Afrique and the Africa CEO Forum and she is a member Advisory Board of Prince’s Trust International and contributor to Forbes, among several others.
On the other hand, LADOL is the largest private indigenous free zone in Nigeria and a strategic special economic zone, built in a secure island, inside the Port of Lagos. The company has proven it is the ideal location in which to execute the largest global industrial projects. Local and international companies can engineer, manufacture and train in this safe sustainable ecosystem. LADOL will create 50,000 direct and indirect jobs across a range of industries. Having reduced by half the cost of petroleum sector service provision and positively disrupted this sector, the developers are focused on creating a circular economy within the zone and attracting non-petroleum sector companies into the zone, starting with agriculture and technology.