Nigeria courts AfCFTA to boost insurance sector, but commitment concerns linger

Nigeria has set its sights on the African Continental Free Trade Area (AfCFTA) as leverage to expand its insurance industry across the continent.

However, full commitment from the country remains a work in progress, with concerns raised on both sides over commitments and outcomes.

Olusegun Omosehin, commissioner for insurance, speaking at a workshop themed “Unlocking Opportunities: AfCFTA and the Nigerian Insurance Industry” in Lagos over the weekend, stressed the immense potential that AfCFTA holds for the sector.

“The AfCFTA is expected to create the largest free trade area in the world, boosting economic growth, trade, investment, and economic integration,” he said. “For the Nigerian insurance industry, this is an opportunity to expand our horizons, continually innovate, and position ourselves for the successful maximisation of the benefits.”

With AfCFTA creating a single market of over 1.3 billion people and a combined GDP of about $3 trillion, he emphasised that financial services, particularly insurance, stand to benefit from increased financial integration and cross-border operations with access to new markets.

“By removing trade barriers, we can develop cross-border insurance products, attract foreign investment, and promote economic development, including coverage for businesses operating in multiple African countries, which can enhance the attractiveness of Nigerian insurers to multinational clients,” he said.

An influx of capital means a supported insurance sector with provision of necessary funds for innovation, technology adoption, and capacity building in the industry.

Supporting this vision, the Nigerian Insurance Industry Committee on AfCFTA, led by Ekeoma Ezeibe, has been working to prepare the sector.

Since its launch in February, the committee has engaged stakeholders, attended consultative meetings, and intensified enlightenment campaigns.

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“We have entered a new phase of enlightenment for operators in our industry,” Ezeibe said. “That is why in the past few weeks, you must have seen our enlightenment materials across different industry platforms, flagged off with a special message from the commissioner for insurance.”

While the insurance sector is gearing up for AfCFTA’s benefits, Nigeria’s full commitment to the trade pact remains uncertain.

Speaking during a session at the same event, Wamkele Mene, secretary-general of AfCFTA, represented by Emily Mburu-Ndori, director of trade in services, investment, IPR, and digital trade, revealed that 24 countries have fully committed to the agreement, but Nigeria is yet to do so.

“Nigeria is still yet to give full commitment, although it is in the process because we already have an offer from Nigeria, but it is not yet a commitment,” Mburu-Ndoria said.

“The concern is, will Nigeria and its ECOWAS counterparts want to go alone? However, we are looking forward to a commitment from Nigeria as the country has more to gain from this agreement.”

Nigeria’s delay is largely linked to concerns over market access, regulatory alignment, and the potential impact on local businesses. There are concerns of local competition with foreign businesses enjoying reduced cost of operation due to bigger imports and no local presence.

To ease hesitation, she reassured stakeholders that Nigeria’s financial sector is well-positioned to compete under AfCFTA. “There is no need to be scared of competition… Nigerian entities are already dominating on the continent and are more competitive, so it’s an added advantage,” she stated.

Mburu-Ndoria argued that these concerns may be unfounded, noting that Nigeria had already opened its trade and investment space at a global level under the World Trade Organisation (WTO) in 1995, so it can only replicate what it has at the global level or improve on it when it comes to AfCFTA.

“AfCFTA is not here to replace ECOWAS agreements but to ensure Nigeria and its ECOWAS counterparts can penetrate markets where they previously had limited access,” she said.