Leading African chief executive officers have tipped Nigeria as the choice destination of their exports, while South Africa was selected as the choice source of their imports, a new survey has revealed. Other countries listed as destinations of their exports alongside Nigeria include Kenya, South Africa, Ghana, and Uganda.
Apart from South Africa, Kenya, Nigeria, Ghana and Egypt topped the list of countries where they will import from, implying that African CEOs are more confident exporting to and importing from Anglophone African countries.
The annual survey, of which this is the third edition, was conducted by the Pan-African Private Sector Trade and Investment Committee (PAFTRAC) between March and June 2022. The survey gauged the sentiments of 800 randomly selected CEOs based in Africa with regards to the effect of African Continental Free Trade Area(AfCFTA) on intra-African trade. AfCFTA was launched in 2021 with a view to integrating African economies through trade.
With a combined GDP of $1.49 trillion, the six aforementioned African countries accounted for 55.2 percent of Africa’s GDP, and 35.5 percent of its population in 2021.
“The large markets such as Nigeria, Kenya, South Africa and Ghana, lead the way as might be expected. This replicates the results of our 2021 survey, although the proportion of companies exporting to Nigeria has increased from 19% to 25% over the past year.
“As with exports, the main Anglophone markets are the main source of imports for the companies we surveyed. Kenya performs particularly well, cited by 28% of participants, marginally behind South Africa in first place. Ghana and Nigeria complete the top four. The next three biggest sources of imports are closely bunched together with 11-12%”, the report states.
The survey reveals that 93 percent of the respondents are confident that AfCFTA will boost intra African trade. It further shows that 67 percent of the senior executives see AfCFTA having a very positive impact on their companies just as 81 percent indicate that AfCFTA will open up new markets to export goods and services.
Read also: Beyond ECOWAS, 18 months of AfCFTA yet to show in Nigeria’s exports
“The report sheds light on the private sector’s perspectives on Africa’s current and future economic and trade environment, particularly in the context of the start of trading under the AfCFTA and post-pandemic recovery. The positive sentiment expressed by survey respondents demonstrates the potential of the AfCFTA and the eagerness of Africa’s private sector to take advantage of the market access opportunities it offers”, Patrick Utomi, chairperson of PAFTRAC, said.
By geographic locations of the respondents, 18.1 percent were from northern Africa; 10.5 percent from Southern Africa; 5.6 percent from Central Africa; 32.4 percent from East Africa, and 33.4 percent from West Africa.
Regarding how long the companies that participated in the survey have been in existence, the survey reveals that 10.8 percent of them are less than a year old; 40.2 percent are between 1 and 5 five years old; 18.4 percent are between 5 and 10 years old; 14.4 percent are between 10 and 20 years old, while 16.2 percent are more than 20 years old. On average, the small enterprises employ between 1 and 5 workers, while the well-established firms employ between 151 and 500 workers.
In terms of revenue, they make between $50,000 and $250 million per annum on the average, and are from sectors such as agriculture/agro processing, 22.6 percent; manufacturing, 10 percent; education, 8.2 percent; banking and financial services, 8.2 percent; ICT, 6.5 percent; consumer goods, 5.7 percent; energy and renewables, 5.4 percent; healthcare, 4.7 percent, and others, 28.7 percent.
“Yes, I share the views of the respondents to the survey that AfCFTA will be a game changer for intra-African trade. But there are some hurdles to be crossed before its benefits can be realised. First, member states have to agree to eliminate tariffs on goods produced by them. Also, every form of protectionism has to be removed by all the member states. It is after this that the benefits of the initiative can be harnessed”, Moses Ojo, a Lagos-based economic analyst, said.
Meanwhile, Nigeria first quarter 2022 foreign trade data showed that not much has been achieved in intra Africa trade. The country’s export data by economic regions showed that only 6.2 percent of Nigeria’s total exports were sold to African clients in the first three months of this year, compared with 15.5 percent in the comparable period in 2021. Nigeria exported 1.5 percent of agricultural goods to African countries in Q1 2022 as against 2.2 percent in Q1 2021.
Of the total raw materials exported by Nigeria in Q1’22, only 5.8 percent had African countries as their destinations. This was in contrast to 7.8 percent in Q1 2021 that went to other African countries. Also, 41.1 percent of solid minerals were sold to African customers in Q1’22 as against 44.6 percent in Q1’21. The country sold 64 percent of manufactured goods to African countries in Q1’22 compared with 72 percent in Q1’21. Again, 4.6 percent of Nigeria’s crude oil was sold to African countries in Q1’22 in contrast to 13.2 percent in Q1’21.
On the import side, 2.6 percent of all Nigeria’s imports came from other African countries in Q1 ’22 as against 2.7 percent in Q1′ 21. In either Q1’21 or Q1’22, only 1.9 percent of all Nigeria’s imports came from other African countries. It should be noted that 3.3 percent of all Nigeria’s imports of agricultural goods were from Africa in Q1’22 as against 3.4 percent in Q1’21.
The data also showed that 10.5 percent of raw materials imports came from the African region in Q1 ’22 as against 8.7 percent in Q1′ 21, and 0.6 percent of Nigeria’s imports of other oil products came from the African region in both quarters.
