AfCFTA: Legal, Trade,Business Experts Examine Dispute Resolutions For Non-State Parties

Ahead of the implementation of the African Continental Free Trade Agreement, the Nigerian Institute of Chartered Arbitrators held a roundtable discussion on Friday, July 30, 2021 in collaboration with the Nigerian Chambers of Commerce Dispute Resolution Center and the National Action Committee for African Continental Free Trade Agreement.

The discussion focused largely on the dispute resolution mechanisms involving non-state parties, implications of the current dispute resolution arrangement, the concerns of non-state parties and the domestication of AfCFTA in Nigeria.

At the virtual conference, experts from business community, government, trade and law examined the Africa intra-trade agreement which has been described as one that could break the cycle of poverty on the continent.

The main objective of the AfCFTA is to boost intra-African trade through the creation of a single continental market for goods and services. It is also aimed to lay a solid foundation for greater level in intra-regional investment.

Speaking on the disputes settlement system under AfCTA, Professor Jonathan Aremu, a Professor of International Economic Relations, at Covenant University as well as a Consultant to ECOWAS pointed out that “Article 1 under the agreement defines dispute as a disagreement between State Parties.

“This implies by way of interpretation that only countries can institute actions before the dispute settlement body to resolve any disputes that arise under the AfCFTA. That goes to show that the Dispute Settlement Mechanism (DSM) of the AfCFTA leans more towards a state to state dispute settlement system” he said.

Aremu further stated that by giving only States the capacity to bring actions under the agreement, non-state parties(private entities) are eliminated from the equation. “The main challenge here is that, in reality, the majority of the trading in goods and services as well as other economic activities in AfCFTA are not done by States but by private persons. So this leaves aggrieved persons or companies to find recourse by petitioning their participating home State to take action on their behalf,” he said.

Although many have questioned the stall in domesticating the AfCFTA, the Nigerian Office of Trade Negotiations responded at the summit by revealing that it was working to put the framework in place as well as addressing the legal issues regarding the implementation of the agreement. This it said has given other bodies and associations the opportunity to dig out some lacunas of the agreement.

There are no clear rules yet in the dispute settlement bodies and no defined procedures as to what happens when disputes arise. Although arbitration has been gaining momentum in dispute resolution, Dr Ken Ukaoha, Secretariat President at National Association of Nigerian Traders raised a salient point stating that “arbitration is good for dispute settlement but the AfCTA Arbitration centers are located in places not in proxy to the parties”.

Dr Ken Ukaoha further stated that more needs to be done in terms of investment negotiations so that it not only favors Nigeria, but ensures that private entities and their rights are properly protected.

According to the data shared during the virtual conference, there are over six million SME’s in the country and less than fifty percent of them understand what AfCFTA is all about.

Dr Otunba Pedro, Chairman, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) therefore urged that efforts should be made to create awareness for the SMEs to know about AfCFTA. “We must do more to build their capacity to compete internationally and properly function in the market,” he said.

Like Professor Jonathan Aremu said “In Business as in life, even in AfCFTA, you don’t get what you deserve; you get what you negotiate”.

Trading under the African Continental Free Trade Area (AfCFTA) officially commenced in January 2021, and although Nigeria ratified her membership in November 2020, there have been concerns and debates in Nigeria around the issue of domestication of the AfCFTA.

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