Nigeria has fallen behind its regional counterparts in harnessing the full potential of intra-African trade, despite signing the African Continental Free Trade Area (AfCFTA) agreement in 2019.
As intra-African trade remains sluggish, a key factor contributing to the stagnation is the limited information available to manufacturers and the bureaucratic hurdles hindering their participation in the ambitious trade pact.
And although the first practical trade activity under the AfCFTA regime was held in September 2022, neighbouring Rwanda, Cameroon, Egypt, Ghana, Kenya, Mauritius, Tanzania, and Tunisia are already operating without Nigeria, having met the minimum requirements for trade under the Agreement.
“So far, the practical implementation of AfCFTA started in September 2022, with the export of coffee products from Rwanda to Ghana; and export of Exide Battery from Kenya to Ghana, under the Guided Trade Initiative (GTI) within the eight state parties that have met the minimum requirements for trade under the Agreement,” said Odiri Erewa-Meggison, Ag. chairman, MAN Export Promotion Group.
“These countries are already operating on the GTI without Nigeria,” she added, during her opening speech at the two-day capacity-building training for members of the Manufacturers Association of Nigeria Export Promotion Group (MANEG).
The training themed ‘Exporting under the AfCFTA’ is aimed at building the capacity of MANEG members, to enable them to take advantage of the potential trade benefits AfCFTA offers.
The United Nations Economic Commission for Africa, in 2018, estimated that AfCFTA would increase intra-Africa trade by 52 percent by 2022, but this target has yet to be achieved.
Read also: Trade between UK and Nigeria rises by 78.2% in one year
Franca Achimugu, coordinator, strategy & planning, AfCFTA Nigeria Secretariat has said the government of Nigeria will have to set in more initiatives that will encourage people to produce for Nigeria, as export is more economically viable and will before long, have many manufacturers looking its way.
“It’s going to be a lot of disservice to Nigeria if we do not saturate our domestic market and we head for other markets, because in the whole of Africa, we are the ones that have the population, and that means latent demand, and that means that other countries are looking at us to send their products here,” Achimugu said.
But, “people cannot be told where to sell their products.”
The AfCFTA, which came into effect a few years ago, aimed to create a single market for goods and services across the continent, facilitating the free movement of people and capital and bolstering Africa’s position in the global economy. The agreement was expected to create a market of over 1.3 billion people and a combined GDP of approximately $3.4 trillion.
However, factors like lack of adequate infrastructure and connectivity across borders, bureaucratic hurdles, and customs delays have slowed the pace of trade integration for Nigeria, leading to increased costs and reduced competitiveness for businesses within the country.
Moreover, regulatory barriers and non-tariff barriers continue to impede the seamless exchange of goods and services across borders. Differences in standards, rules, and regulations among African nations have made it challenging for businesses in Nigeria to access new markets and establish trade relationships with their peers.
Furthermore, some experts argue that Nigeria needs to adopt a more proactive and strategic approach to tap into the vast opportunities presented by the AfCFTA. This includes diversifying the country’s export base, promoting domestic industries, and investing in innovative sectors to remain competitive in the rapidly evolving global market.
In contrast, neighbouring countries have made significant strides in taking advantage of AfCFTA’s benefits. Several nations have seen a rise in cross-border investments and trade partnerships, leveraging the agreement to expand their market reach and increase economic growth.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
