Africa’s richest man Aliko Dangote reveals why Nigeria should not sign the AfCFTA

Africa’s Business Tycoon, Aliko Dangote reveals why he is not in support of the Africa Continental Free Trade Agreement (AfCFTA). This was made known during the Ibrahim Governance Weekend which took place in Abidjan, Côte d’Ivoire.

While chatting with the convener of the event, Mo Ibrahim, about the AfCFTA, Dangote decried that Benin Republic which is 28km from the Dangote Cement Factory at Ibese in Ogun State, Nigeria, doesn’t allow his cement into their country but rather prefers to import from China. According to him, Africa needs to make the regional markets work first before going into the AfCFTA. Benin and Nigeria are both members of the Economic Community of West African States (ECOWAS).

In May 1979, member states of the bloc adopted a protocol which stipulated the right of ECOWAS citizens to enter, reside and establish economic activities in the territory of other member states. Given that this has not been achieved, Dangote’s doubts about the readiness of the continent for the AfCFTA is not misplaced.

“The AfCFTA is a very good thing but my issue is even if we sign what about the implementation. We are very good at designing programmes but the implementation is key,” Dangote said during the 2019 Ibrahim Governance Weekend in Abidjan, Côte d’Ivoire.

It would be recalled that Africa’s richest man had been accused of being the reason why Nigerian Government made a last minute decision of not signing the agreement but he refuted the claim.

Dangote further agreed that the AfCFTA would help the continent, however, “the continent needs to make sure that the regional markets are working very well”. He authoritatively said that once these issues are sorted, Nigeria would sign the next day. Dangote also said that political will is needed to sign most of these agreements.

“We have to really protect our region because a lot of people who are pushing for this AfCFTA are looking for the weaker countries to push their product into Africa,” said Dangote.

Surprisingly, people think that Dangote is against the agreement because he is scared of the competition from other countries that have lesser production costs than that of Nigeria.

“His current model in cement involves pricing very differently across the continent. In Nigeria, he charges the highest possible price and uses that to fund price cuts in places like Kenya and Tanzania where he’s trying to win market share. The AfCFTA will stop him from being able to do that as Nigeria will need to open up and it will erode his margins in Nigeria,” economic analyst Feyi Fawehinmi commented on why Dangote is against the agreement.

In March 2018, more than 40 African countries signed the landmark trade agreement to commit countries to remove tariffs on 90 percent of goods, as well as allow free access to commodities, goods, and services across the continent. If successfully implemented, the agreement would create a single African market with more than one billion consumers and a GDP of more than $3 trillion. However, for the agreement to come into force, at least 22 countries needed to ratify it and this has now been achieved, with Gambia’s parliament approving the ratification.