Nigeria exports hair products in first AfCFTA shipment to Kenya

…Amid delays due to poor documentation

Lucky Fibres, a subsidiary of the Tolaram Group, exported hair products in Nigeria’s first African Continental Free Trade Area (AfCFTA) shipment to Kenya.

Lucky Fibres is a Lagos-based manufacturer which produces hair products, rugs, and carpets.

The company’s shipment was however delayed due to poor documentation and inability to properly describe or account for the items.

Abdullahi Maiwada, national public relations officer, Nigeria Customs Service (NCS), told BusinessDay in an exclusive interview that the issue led to a 24-hour delay in the release of the shipment.

“The only challenge experienced is the poor documentation on the declaration by the exporter. The products to be exported were not properly described and the quantities were not accounted for. This caused a delay of release of the shipment by 24hrs,” he said.

He however stated that the issue was eventually resolved when the export documents were modified to meet the required standards, ensuring that the shipment could proceed.

“The issue was addressed by ensuring that the export document was modified to standards.”

Speaking on how the Customs ensures that AfCFTA shipments meet the required standards and regulations, both locally and in destination countries like Kenya, Maiwada said the comptroller general of customs (CGC) has deployed senior officers to AfCFTA desks nationwide to ensure compliance.

Launched in 2021, the AfCFTA is a trade agreement aimed at creating a single continental market for goods and services across 54 of the 55 African Union (AU) member states. It is said to be one of the largest free trade areas in the world in terms of the number of participating countries.

Though this was Nigeria’s first export to Kenya under the AfCFTA, it was the second export done under the AfCFTA in general.

Benefits of AfCFTA

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“One major benefit of the African continental free trade area agreement is the opportunity to access a bigger market. We are talking about a market of 1.5 billion people. That’s a very huge opportunity because the AfCFTA protocol will collapse practically all the barriers, tariff and non-tariff barriers,” said Muda Yusuf, chief executive of Centre for the Promotion of Private Enterprise (CPPE).

Yusuf highlighted that under the AfCFTA, businesses can scale and become more competitive by leveraging innovation and improved logistics, while government support through a stable macroeconomic environment is crucial for fostering growth and investor confidence.

“For businesses with capacity, this is an opportunity to further scale and become more competitive. They will enjoy economies of scale, reduce unit costs, and be able to compete within the sub-region, the continent, and even globally.

“For businesses to take advantage of this, they need to be creative, innovative, and fine-tune their logistics, leveraging technology for better marketing and delivery. But more importantly, the government must create a stable macroeconomic environment, with stable exchange rates, low inflation, and reduced uncertainty to inspire investor confidence.”

He noted that for the AfCFTA to succeed, governments must improve physical connectivity, enhance payment systems to allow trade in local currencies, and remove non-tariff barriers.

“Government, including those across the continent, must improve connectivity through roads, rail, aviation, and sea, as effective trade and economic integration in Africa cannot occur with poor linkages. This connectivity is crucial for countries to fully benefit from the African Continental Free Trade Area.

“The payment system also needs improvement. The African Exim Bank is working to ensure seamless transactions within AfCFTA, allowing countries to trade in their own currencies.”

Nigeria’s Trade with Kenya

Paul Alaje, chief economist at SPM Professionals, said, “The export to Kenya will boost trade relationship between both countries, given that Nigeria is in the west, and Kenya in the east. It’ll also create more jobs, which is a good development, as this will help boost economic productivity for both countries.”

Alaje said the Ministry of Trade and Investment must start a support scheme for mini, micro, and small businesses to enable Nigerian businesses to compete globally.

He said, “We need to intensify awareness level, facilitate grants and support for manufacturers. We need to create a business environment that allows for growth. That is when Nigerians can compete both locally and internationally. For me, the economic impact is huge, when the environment is right.

“Even though digital tools are good, they cannot replace critical infrastructures. So, the government has a huge responsibility.”