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In light of Nigeria's previous commitment to the World Trade Organisation (WTO) global trade agreement, which permits foreign investors to fully own firms in the country, the nation is now facing challenges at the continental level. Consequently, Nigeria plans to utilize regulatory measures to establish conditions for foreign investors.
The WTO global trade agreement, to which Nigeria has been committed since 1995, is now becoming a hindrance in the African Continental Free Trade Area (AfCFTA), since it cannot offer terms below what was previously agreed upon internationally. Initially, Nigeria intended to prevent complete foreign ownership under AfCFTA to maximize its benefits.
However, the government later realized that it must adhere to the commitments made at the global level within the continental trade agreement, which has delayed Nigeria's engagement with AfCFTA. Recently, there appears to be some flexibility, particularly in the financial services sector, as discussions continue on how sector regulators can restrict the influx of foreign investors.
Failing to regulate could risk turning Nigeria into a dumping ground for manufacturers from across the continent and could undermine local content regulations, resulting in minimal contributions to the country's Gross Domestic Product (GDP).
Considering regulatory alternatives is seen as a way to navigate the complexities of previous trade agreements and enhance Nigeria's prospects under AfCFTA.
During a workshop titled ‘Preparing Insurance Brokers For The Take-Off Of the African Continental Free Trade Area (AfCTFA)’ organized by the Nigerian Insurance Industry Committee on AfCFTA (NII-AfCFTA) in Yaba, Lagos, Ekeoma Ezeibe, chairperson of the committee, revealed that the WTO Protocol signed in 1995 likely opened parts of Nigeria's insurance sector to 100 percent foreign ownership.
This means that Nigerian operators may not be able to negotiate their way out of the situation, regardless of how open other countries are to foreign investment in their insurance sectors.
She pointed out that the principle of reciprocity may not provide insurance practitioners with adequate coverage. Therefore, she urged regulators, especially the National Insurance Commission (NAICOM), to leverage regulatory tools to address the inconsistencies in earlier trade agreements and open up more opportunities for Nigeria in AfCFTA.
Emily Mburu-Ndoria, director of Trade in Service, Investment, IPR and Digital Trade at the AfCFTA secretariat, stated that while every nation's domestic regulations will take precedence under AfCFTA, there would be mutual recognition among nations.
She emphasized that the agreement would not hinder member countries from maintaining their regulations but aims to enhance them to align with international best practices, encouraging Nigerian insurance brokers to prepare for the significant advantages the agreement offers.
President of the Nigerian Council of Registered Insurance Brokers (NCRIB), Babatunde Oguntade, advised brokers to ready themselves for the opportunities arising from AfCFTA by enhancing their skills and fostering collaborations.
The insurance commissioner,Olusegun Omosehin, remarked that AfCFTA presents noteworthy opportunities for the Nigerian insurance industry to broaden its reach across Africa.
He acknowledged the challenges posed, including heightened competition, regulatory complexity, and the necessity for increased professionalism.
Represented by deputy commissioner Dr. Usman Jankara, he highlighted that insurance brokers' skills and professionalism are crucial for driving growth in the sector.
He outlined essential areas for improvement among insurance brokers for the successful implementation of AfCFTA, including capacity building, professionalism, digital transformation, regional market comprehension, and collaboration.
He assured that the commission is committed to ensuring that Nigerian brokers are not at a disadvantage within the AfCFTA framework, emphasizing the need for brokers to enhance their value, professionalism, and service delivery to maintain relevance.
“The Commission will provide the necessary support and guidance; however, it ultimately falls on you, the brokers, to take decisive actions to remain competitive and relevant. This is why the Commission has intensified its ongoing oversight and regulation of insurance brokers, including the recent mandate for the development of Manuals, Codes of Ethics, and Standard Operating Procedures,” he stated.
