Stakeholders in African and international trade has urged the need for Nigeria to boost its non-oil sectors and adopt value addition practices in order to effectively utilise the African Continental Free Trade Area (AfCFTA) agreement and enjoy the benefits it has to offer
The stakeholders spoke at the sixth edition of Zenith Bank’s International Trade webinar on Tuesday, themed “Nigeria’s economic prosperity: The role of intra -regional trade and non-oil export initiatives.”
Benedict Oramah, president, African Export-Import Bank (Afreximbank) said the trade agreement was a turning point for Nigeria to revive its economy and position for growth.
AfCFTA, he argued, presents an opportunity to upscale dynamic and critical sectors, while the wider market remains a fertile ground for business owners especially the Small, Medium scale enterprises (SMEs)
Oramah noted that opportunities exist in various sectors like the $65 billion light manufacturing sector in intra African trade, as China, a major player gradually shifts from light manufacturing, giving room for African players to compete.
“If Nigeria can capture 15 percent of that $65 billion light manufacturing market, it will boost non-oil performance by 200 percent and also create one million jobs,” Oramah said.
Other than light manufacturing, Oramah noted that Nigeria’s informal sector, particularly the entertainment, creative and cultural industry have massive potential to become the second largest export revenue earner if the sector is properly utilised and organised as it is the largest in Africa.
He also advised the need to improve branding of locally made products which will foster proper distribution and sale of made in Nigeria goods.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) said that the outbreak of the COVID-19 pandemic, its impact on oil prices as well as the drop in the demand for oil have necessitated prompt diversification of the economy to achieve recovery.
He said Nigeria exited recession in the fourth quarter of 2020 due to significant interventions from the monetary and fiscal authorities, but added that a strong and well balanced recovery will require additional input from the private sector in growing the non-oil sector.
He added that the trade agreement was another avenue to accelerate economic growth as it promises a wider market and more business opportunities.
“The trade agreement offers opportunities in sectors like manufacturing, agriculture, ICT, financial services, space which Nigeria can comfortably thrive in. Our non-oil exports if well harnessed can enable greater growth and improve foreign inflows for the Nigerian economy,” he explained.
The CBN governor also announced that a N500 billion non-oil export stimulation intervention has been set up, being managed by the Nigerian Export-Import Bank. He urged Nigerian businesses to take advantage of the facility given at a single-digit interest rate.
Wamkele Mene, secretary-general of the African Continental Free Trade Area (AfCFTA) said Nigeria offers a unique opportunity and market in AfCFTA with its population, natural resources and labour force, but enjoying its benefits will require urgent action for faster economic diversification activities.
In tackling Africa’s industrial deficit, it has become urgent to develop the non-oil sector, adding that it is necessary to reduce reliance on the export of primary products, adding that Africa’s exports generally are found wanting in terms of diversity and quality
“Across Africa, there is potential for increased diversification and development of globally competitive regional value chains, Africa also needs to adopt value addition practice to boost its export profile and enhance the quality of its exports,” he explained.
Ebenezer Onyeagwu, group managing director/CEO, Zenith Bank said the move away from oil globally has prompted the need for Nigeria to fall back to its natural resources to thrive economically.
“It has become crucial at this time to key into the federal government’s diversification plan and boost our non-oil sectors for economic development especially as the trade agreement is being implemented” he said.
