BY BAMIDELE FAMOOFO
Since the implementation of AfCFTA, Nigeria’s total intra-regional trade has increased by 12.38% while the Continent’s intra-regional imports (30.91%) rose at a faster pace relative to intraregional exports (5.98%).
Nigeria’s intra-regional trade is expected to increase further in 2022, due to ongoing efforts of the fiscal and monetary authorities to improve the domestic production. For instance, the CBN recently launched a “100 for 100 Policy on Production and Productivity” which is expected to provide funding to local firms in order to bolster their output levels. However, insecurity, lack of inadequate infrastructure are major risks to intraregional trade in the medium term.
A report from Financial Derivatives Company Limited indicated that Nigeria’s low productive capacity and rising export to other regions particularly Asia and Europe reduced the volume of commodities to other African countries.
It noted that Asia remains Nigeria’s top export destination, accounting for about 36.28% of the country’s total exports (about three times Nigeria’s intra-regional export share of 11.50%).
The AfCFTA is an attempt by African nations to boost intra-African regional trade, which is currently estimated at 15% of total trade in the continent. The implementation of AfCFTA started in January across African countries that signed and ratified the agreement. The Nigerian government signed the agreement on July 7, 2019.
