Worried by the effects of COVID-19 on economies within the continent, analysts and auditing firms have stressed the need for Nigeria to be self-sufficient by ensuring fiscal sustainability to achieve the gains of the African Continental Free Trade Area Agreement (AfCFTA).
Indeed, COVID-19 has shown that self-sustenance matters, and is important mostly for food security, education, healthcare and logistical services. One of the objectives of the AfCFTA is to make Africa self-reliant in these sectors, while signatories to the agreement need to develop a framework and set realistic implementation plans to improve on them irrespective of regional integration.
PricewaterhouseCoopers Limited (Pwc Nigeria), in its latest report titled, “COVID-19 and the African Continental Free Trade Area Agreement,” said rather than closing borders that can send a negative signal to the progress of the agreement, governments can reduce human flows while keeping the borders open to key goods and services required for national development and economic sustainability.
In this case, the report tasked border management agencies to ensure movement across boundaries met the business and economic criteria set by the Nigerian government. This will signal continued belief in the importance of economic activities and trade in the provision of goods and services that people need to continue their daily lives.
According to the report, this will require quick and timely decision making supported by accurate and credible data available to policy makers. Such management information systems (MIS) should include economic, social, environmental, health, cultural, governance and technology data that are key requirements for effective competition within the AfCFTA.
“Countries like Nigeria need to consider fiscal sustainability in terms of focusing efforts in key areas where the country has biggest impact such as rails, ports in order to optimise the country’s resources. This could be achieved through public and private sector collaborative efforts.
“One important question Nigeria must ask in these uncertain times is how its digital economic strategy – National Digital Economy Policy and Strategy (2020-2030) proposed by the Ministry of Communication and Digital Economy, and the Smart Nigeria Digital Economy Project proposed by the Nigerian government can sustain economic interactions and development in the face of a pandemic.”
The report believes the AfCFTA will be competitive, where countries like Egypt with three active digital strategies – (National E-Commerce Strategy, Strategy for Social Responsibility in ICT, and Digital Arabic Content Strategy), would have an edge over others in the market with weak or no digital framework to support trade in goods and service within the continent.
Going into the AfCFTA post-COVID-19, Nigeria and other African economies requires building a digital economy to foster production of higher quality goods and services at reduced cost. This will open new channels for value addition and broader structural change.
To sustain this process, the report said there is a need to develop and/or upgrade the digital infrastructure, digital financial services, digital entrepreneurship, and digital skills that are thematic pillars of the Digital Economy for Africa (DE4A)15 to encourage trading digitally across individuals, SMEs and governments.