12th Annual Legal Practitioners Conference Themed: “Bringing Down The Barriers, The Law As A Vehicle For Intra-African Trade”

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SPEECH BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA, AT THE 12Th ANNUAL LEGAL PRACTITIONERS CONFERENCE WITH THEME, “BRINGING DOWN THE BARRIERS: THE LAW AS A VEHICLE FOR INTRA-AFRICAN TRADE”, ON WEDNESDAY, JUNE 27, 2018.

PROTOCOLS

The President once asked me whether there was anything that lawyers thought they could not explain and I said, ‘ frankly, it never crossed my mind that I thought we could explain everything‘. He said he thought as much, that we lawyers just assume that there is nothing we cannot explain. We may take it for granted but without putting too fine a point on it, there is no doubt that the Rule of Law – encompassing the sanctity of contracts, respect for property rights, the privacy of legal and judicial intervention as a safeguard against everyday arbitrariness, the existence of a common set of principles by which all of us; non-state actors, state actors are subject – are really the foundation of any notion of civilized existence and of course, trade and commerce; and our business, especially commercial lawyers literally makes us important interlocutors not just of commerce but of civilized existence generally.

The theme of this Conference, “Bringing Down the Barriers: The Law as a Vehicle for Intra-African Trade” and its focus especially on the Continental Free Trade Agreement is a very timely one. The African Continental Free Trade Agreement (AfCFTA) and its Protocols on Trade in Goods, Trade in Services and Rules and Procedure on the Settlement of Disputes presents a real opportunity for Nigeria to leverage its distinct position to expand its reach in trade, commerce and services across Africa.

But, let me first state the obvious, the establishment of a Continental Free Trade Area is a complex process, with carefully laid out steps and stages and there are many points and stops along the way. Those begin, of course, with the conception and adoption of the idea for further consideration by Member States and we have gone past that point. We all sort of agreed Nigeria was very much a part of the conceptualization and once the idea was agreed, members begin to explore and establish the outlines of the proposed engagement, leading up to the preparation of, and negotiations on, the terms of the Framework Agreement.

In this regard, you would probably recall that Nigeria participated fully especially in the negotiations; in fact, we led the negotiations leading up to the Framework Agreement. After that, the next stage, the negotiation of specific terms to set out the modalities and implementation of the Protocols on Trade in Goods and Services. At this stage, each country brings on its peculiar features and is allowed as you know to enter reservations, while reviewing and assenting to the general terms. This is an on-going process to which Nigeria will subscribe. I want to emphasize that it is a process that Nigeria takes seriously and we will subscribe once we are satisfied that the full scope and consequences of the free trade proposal makes sense for us and especially our commercial entities.

There has been a lot of concerns generated by Nigeria’s cautious approach to signing the Framework Agreement. There is, however, no cause for alarm. As already disclosed, this delay is simply to allow for closer and wider consultations with all major stakeholders, especially businesses that will be most affected by the consequences of the agreement when we ultimately sign. At this stage, stakeholders must be allowed to express their hopes and fears in a most comprehensive manner as possible. If you notice, South Africa which is the second largest economy in Africa has also technically not signed the framework agreement considering the caveats that they entered. They were there at the ceremony but if you look at all the caveats that they entered, it is very clear that they like us also want to take their time to look at the issues very closely. We are Africa’s largest economy; the commercial attractiveness of our huge market is a no-brainer. And naturally, our brothers in the region are keen to maximize the opportunities, we then surely should have a bit more work to do.

Clearly, the population, resources, geographical area and other theoretical trade indicators of the continent highlight the tremendous potential that exists if we can crack the various barriers that hinder intra-African trade. However, although this assertion makes easy sense in theory, the reality of doing business in Africa poses its own peculiar challenges.

Free trade assumes a competitive playing field that is fair. Africa’s trading terrain, as it stands, is complex, to say the least. Today, a significant proportion of African natural resources are exported in raw form to Europe, Asia and the Americas. At the same time, many goods consumed in sub-Saharan Africa, in particular, are not manufactured in Africa but actually imported in their finished form from the same industrialised nations that buy our natural resources. And I am trying to explain why this is important in the way we are trying to approach the Free Trade Concept and the properties of the Free Trade. Because of these phenomena, it means that much of the cross-border trade that occurs in Africa is in finished goods and materials imported from outside Africa.

Although the large countries like Nigeria, with our very high population, have adopted economic policies that focus on inclusive economic growth through backward integration and import substitutions, many of our smaller low population African counterparts still support, formally or informally, an economic programme of exporting raw natural resources and importing 100% of their consumables.

These import-oriented nations have bilateral understandings with export-focused industrialised nations. The bilateral trades enable the smaller African nations to import excessive volumes at subsidised rates, which products make their way, through legal or illegal channels, into large population nations like Nigeria. The technical term for this is “transhipment.” However, the real description, especially where it is illegal and detrimental to a nation’s economic and security agenda is “dumping.” This excessive dumping of subsidised, and sometimes substandard goods, from outside Africa. We in Nigeria see it as an attack on Nigeria’s backward integration and inclusive economic growth policy.

Due to the prevalence of dumping on the continent and the potential for its escalation, one could argue that the “free trade” in Africa may not necessarily be “fair.” Our vision for intra-Africa trade is for the free movement in “made in Africa goods;” goods made by Africans using a significant proportion of African raw materials NOT just free movement of goods “’packaged’ or ‘rebranded’ in Africa.”

Our decision to delay the signing of the AfCFTA and to extend consultation is to ensure that our participation does not adversely impact the progress that we have made to date. We have to ensure that the theories assumed are adjusted, if needed, to the realities that the Nigerian businesses face especially when it comes to dumping and also in some instances, smuggling.

For instance, Nigeria is the only country; and this is the smuggling of rice as an example of dumping. Nigeria is the only country in West Africa where parboiled rice is consumed in significant quantities. Now, the Beninoise consume white rice (not parboiled rice).

Nigeria’s population is about 17X Benin’s population & Nigerians typically consume an average of 15X more rice than Benin Republic mostly in the form of parboiled rice.

But all the records show that since 2013 when Nigeria imposed a technical ban on rice by raising tariffs & later restrictions in access to FOREX for rice imports, Benin has been importing progressively more parboiled rice than Nigeria.

Nonetheless already, wide-ranging nation-wide, sector-wide and industry-wide consultations are on-going to determine how best the Framework and the Protocols will deliver the best results for stakeholders. At the last count, 27 Groups have been consulted in dedicated meetings, with Consultative Forums in about 6 geopolitical zones of the country; and of course, the NBA is one of the very important groups that we have been talking to. And the deliberations at this Conference of course, very important in helping to shape the forts and ideas around what to do and how to approach the negotiations that are prior to signing; not just the framework but all of the protocols of the agreement.

On our part as government, we take quite seriously our duty to focus on expanding Nigeria’s economic influence and our reach regionally and beyond, while also ensuring that domestic front is nurtured into a stimulating and enabling environment for business and investment. This conference is an important one and I believe not just because it focuses on the matters that concern Nigeria but also because it emphasizes our importance in Africa and the importance of our profession as a legal profession in Nigeria on the entire African continent. And this is why the outcome of this particular deliberation will be very important for us as a government and also, for several of those countries that depend on us and Nigeria’s direction; and Nigeria’s steer for making their own decisions.

I wish you very fruitful deliberations and look forward to receiving the recommendations of the Conference.

Thank you and God bless you.