More sectors that may gain most from the full activation of the African Continental Free Trade Area (AfCFTA) Agreement signed last Sunday in Niamey, Niger Republic by all heads of government of the African Union (AU) are still emerging. Latest is the electricity generation companies (GenCos) in Nigeria.
However, it is not yet clear if the Transmission Company of Nigeria (TCN) will create a window that will allow indigenous Gencos to trade their products across Africa when instances are rife that Nigerians are yet to be well saturated with power supplies.
Analysts say based on the background that power remains a strategic and sensitive product, exporting power under AfCFTA may need further enabling legislation to free Gencos for international trading under the new continental trade liberalization driven by the African Union (AU).
From all indications, Gencos may prefer selling electricity to other African economies where chances of debt pile up will not be an issue as it is now amongst several electricity distribution companies (Discos).
In a statement issued by Gencos under their umbrella body; the Association of Power Generation Companies (APGC), it said “due diligence conducted prior to the agreement and the corresponding cohesion with several interest groups has assured the operators of a conducive operational environment’.
The Executive Secretary of APGC, Mrs. Joy Ogaji, revealed that “The GenCos are confident that AfCFTA will boost intra-Africa trade from the current 16 per cent to about 60 per cent besides increased trade.”
While noting that “There are other potential benefits of the agreements to the economy in particular and Nigerians in general,” she averred that “Under the agreement, there will be no quota system; trade will be conducted according to trading capacity; exports of goods and services will be cheaper, leading to more competitive pricing.”
According to her, “Nigerians will now enjoy easier entry (and exit) from other markets, with the cumulative result of all these benefits being a significant boost in trade, and the economy”.
