The impact of conformity of standards on intra-African trade and the Nigerian economy 

The African continent presents huge potential for growth and the recently introduced African Continental Free Trade Area (AfCFTA) agreement promises to underpin trade facilitation and economic expansion with be the largest free trade area since the formation of the World Trade Organization in 1995.

The longest journey starts with a single step. Government, public bodies, private institutions, and investors are having conversations with a pointed focus on compliance standards, verification of conformities and regulatory alignment to encourage import and export in a safe manner.

Africa’s current population of 1.5 billion people, expected to increase to 2.5 billion by 2050, demands the need for goods and services for domestic consumption and international trade to achieve sustainable economic growth and improve living standards.  The forecast for Africa estimates the fastest urban growth rate globally according to the Organization for Economic Cooperation and Development (OECD), with cities touted to become home to some additional 950 million people. With most of this happening in small and medium-sized towns, great opportunities are envisaged and with this comes the need for food protection, much needed infrastructure development and essential services, all wrapped up in a green environment that is sustainable and transparent.

Hailed as a game changer for import and export

The AfCFTA has been hailed as a ‘game changer’ to intra-African trade, pivotal to boosting the economy because of its unification and solidifying of all the African countries into one binding agreement, making it historic and a first of its kind. The agreement is expected to change the face of the import and export landscape, already making an impact since it was brokered and signed in 2018.

As the AfCFTA becomes a part of the daily business environment, governments and businesses need to be aware of product standards and regulations to protect traders and society. The necessity for a safe environment for the export of goods within countries in Africa; and the regulatory and compliance alignment required for promoting “made in Africa” goods for export to international markets, have spurred on the recent collaboration between Afreximbank and the world leader in testing, inspection and certification, the independent entity Bureau Veritas, to launch the African Quality Assurance Centre (AQAC) in Ogun State, Nigeria.

The state-of-the-art testing facility ensures standards of final products for export comply with global standards across all sectors of the market, including the food chain; therefore, also serving as a health and safety benefit for the predicated urban growth. Aligned to international compliance regulations, the laboratory, through testing, ensures that “made in Africa” products are accepted internationally. Addressing the trade imbalance between import and export, the facility is making consistent inroads at balancing the playing fields.

According to Ohioze Unuigbe, Sales Director for Government Services, Africa for Bureau Veritas, and an instrumental player in the development of AQAC with Afreximbank: “Nigeria and more globally Africa have a razor-sharp focus on conformity and compliance of goods, which is helping to accelerate safe and secure trade with Nigeria and between countries in Africa and indeed to the rest of the world. We are in a very exciting phase in the maturation of the African trading landscape, and we just need to ensure we have the right regulations in place to drive compliance. Our collaboration with Afreximbank has resulted in a one-of-a-kind, modern testing facility which is going to bear great fruits for the protection and facilitation of intra-African and export trade with the continent and globally.” AQAC has also sparked the need for training and building local technical knowledge, further boosting skills, enhancing prosperity, and encouraging job creation. It is expected that further AQAC laboratories will be rolled out in due course which in turn will ensure ease of logistics and quality control across regions.

Bureau Veritas plays a key role in facilitating intra-African trade, helping support their clients to achieve market access for the made-in-Africa products, whilst also facilitating and promoting relationships with International Financial Institutions, including Afreximbank. With recent investments into laboratories to ensure compliance standards and the pre-Export Verification of Conformity programs in place, Bureau Veritas, together with its stakeholders, is determined to enhance inter-country exporting within Africa and is taking the lead on this very important topic.

Powerful influence of SONCAP on the economy

In 2005, the Nigerian government introduced the Standards Organization of Nigeria Conformity Assessment Program (SONCAP), a pre-shipment verification of conformity to standards for imported products.  The program addresses the concern of unsafe products entering the country and the subsequent risks to public health and safety. SONCAP provides a level playing field in terms of quality for both regulated and locally manufactured products to prevent unfair competition. Products arriving at Nigerian entry points; ports, airports, or land borders without a SONCAP Certificate are rejected at the entry point and the Customs release will be refused. “To date the program has made a positive impact on products being regulated and importers are being held accountable for their goods, thereby improving the quality of products currently reaching the country,” adds Unuigbe.

“It is of vital importance that we view compliance holistically as a continent rather than through the lens of one nation. The European Union is strong because they collaborate on standards and compliance regulations. Bureau Veritas runs verification of compliance programs globally and so we can play a pivotal role in supporting any nation comparing their programs to best practice or refining their regulations. The recently launched TIC Council Africa with Bertrand Martin, SVP Africa Bureau Veritas will not only serve as a catalyst to shaping the African trade landscape but will also, ensure an eagle eye is kept on conformance and compliance across Africa,” he asserts.

The impact of standardization on the economy

Harmonization of standards and regulatory compliance are essential to unlocking the Nigerian and African economies, whilst also serving as an inhibitor of sub-standard product importation. Currently 45% of expired drugs end up in Africa due to lack of standards regulations, which in turn negatively impacts public health and safety. Standardization of products will alleviate many of these challenges in the long term, thus reducing the impact on weighty health budgets.

The African Quality Assurance Centre will further support the Nigerian economy by ensuring the correct pricing of commodities is obtained based on the quality of the goods, which is achievable only by testing. As a country rich in raw materials that are currently being exported for processing, this will make a positive dent on the economy and Gross Domestic Product. 

Governments need to create an enabling environment for investors, which becomes more attractive to foreign direct investment if harmonization of standards exists. The Nigerian market is an import-driven market highlighting the need for strong regulations to protect consumers. The need for an independent testing, inspections, and certifications body to ensure compliance with a harmonized regulatory system and international standards is essential to creating an environment of trust and transparency; where government, businesses, investors, and consumers all benefit in a safe manner.

A new Trade Supermarket for Africa

Afreximbank plays a unique and pivotal role in intra-African trade and the African economy. Their positive impact on trade has been well documented, as already witnessed by much interest from companies for funding to process raw materials from natural resources prior to export.  

Afreximbank, has strategically championed the progress of trade and are now perceived as the “Trade Supermarket for Africa”, boosting the economy, and acting as a “one-stop-shop” for financial needs for the continent whilst also supporting regional integration on the continent. Proposing a pan-African solution of international finance that will benefit every country on the continent.

In its drive to promote infrastructural development, Bureau Veritas certifications, testing and inspection certificates of quality are recognized and readily accepted internationally, making them an indispensable player in the relationships between Afreximbank, Africa and the AfCFTA. Afreximbank and Bureau Veritas together bring trust to the entire process, further encouraging much needed foreign direct investment to the continent.  

Key drivers of the economy and regional integration

Many countries on the continent are in dire need of coverage of key infrastructures such as transport, energy, ICT, energy, infrastructure, and transboundary water resources.

One of the critical areas in the spotlight for the Nigerian government is food security. With an economy offering huge potential for growth  AfCFTA and AQAC play a pivotal role in the Agricultural sector, one of the fastest growing areas of the market. Quality testing and conformance will further enhance food security, which is also dependent on infrastructure development as an essential driver for progress and has the potential to be an enabler of sustainable and inclusive economic growth. The African economy demands reliable infrastructure to connect supply chains and transport goods and services effectively across borders via regional corridors, central to successful intra-African trade.

The need for regional integration is core to the success of the AfCFTA in Africa, which will help create a new ecosystem for trade. As this gains momentum, an enabling environment for the private sector to invest on the continent will be created which will further boost economic success.

Sustainability, going green, conformity and compliance

Africa currently enjoys one of the lowest contributors to green-house emissions and has contributed the least to global warming. As and when much-needed infrastructural development is rolled out, sustainable green solutions that are inclusive and resilient are being implemented to address the infrastructure deficit.

Africa’s rich natural resources and the world’s largest free trade area, incorporating seamless regional corridors and harmonious compliance regulations, will set the stage for positive growth in intra-Africa trade.

By Ohioze Unuigbe

Ohioze Unuigbe is the Government Services Sales Director – Africa, responsible for developing and rolling out the Bureau Veritas Government Services International Trade (GSIT) strategy and activities in Africa, driving excellence and innovation on the continent. Prior to his current role, he spent six years as Chief District Executive of Bureau Veritas Nigeria, spearheading operations and serving on several Boards. 

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