Dr. Doyin Salami, Chairman of the federal government Economic Advisory Council, Dr. Doyin Salami, on Thursday stated that Nigeria would lose out in the implementation of the Africa Continental Free Trade Agreement (ACFTA) unless its products could withstand international competition.
This is came even as he said that border closure was not a sustainable strategy and that the nation must take pragmatic steps to reduce the costs of production for its products to be internationally competitive.
Dr. Salami spoke at the meeting on the development of the Secured Agricultural Commodity Transportation and Storage Corridor (SATS-C) in Abuja.
According to him, “It is important to bear in mind this issue of ACFTA and the reason is very simple – upside and downside.
“The upside is the access to larger market and that is only available if we, as a country, are prepared. As I am looking at it, Nigeria needs to be careful. If we are not careful, our output may even diminish on the back of ACFTA.
“Why? Because other countries with better and lower production costs will take advantage of our market which will become a disincentives to our farming community. Shutting borders does work to a point but it is not a long-term sustainable venture. Routes to market and infrastructure that drive trade are very important.”
He noted that agriculture accounted for more than 20 per cent of the GDP, with more than 30 per cent of the population are engaged in agriculture but that only a small percentage of those involved in the sector had access to market.
According him, “Opportunities are there but the structural challenges are where we need to pay attention. Our export of agriculture produce is very small compared to our import”, making the nation a bet importer.
The Economist said that some people might be surprised at his comments, as the Chairman of the Presidential Economic Advisory Council, but that his position was the fact.
In his remarks, the Managing Director of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc), Mr. Aliyu Abdulhameed, said that the SAT-C was desined in line with its mandate to fix broken agricultural value chains and increase the flow of finance into the sector.
He said that a fully operational SATS-C policy could directly lead to a 5% increase in the agriculture sector’s contribution to national GDP by halving annual post-harvest losses of $12 Billion.
In addition, the initiative would lower food prices, create over 125,600 direct and indirect jobs, and the heightened possibility of adhering to standards for improved access to export, industrial and consumer markets.
According to him SATS-C had the capacity to increase agriculture sector’s contribution to the Gross Domestic Product (GDP) by as much as 5 per cent.
Mr. Abdulhameed said that it would complement and perfect one of NIRSAL’s business models/concepts known as PH-P3 (Primary Production & Harvest, Primary Processing, Primary Transportation and Primary Storage) which would ensure efficient production in the farms and optimum capture of value at harvest by enabling prompt evacuation of produce from farm-gates, and the subsequent haulage of commodities across the country through designated corridors.