Despite AfCFTA, Nigeria’s intra-African trade dips to N842.6b YoY
By Jeph Ajobaju, Chief Copy Editor
Nigeria’s intra-African trade value dipped 11.95 per cent year-on-year (YoY) from N956.93 billion in the first quarter of 2022 (Q1 2022) to N842.6 billion in Q1 2023, despite operation of the African Continental Free Trade Area (AfCFTA) since 2021.
AfCFTA seeks to facilitate a free flow of goods and services across Africa and boost the trading position of the continent in the global market.
AfCFTA projects 52.3 per cent expansion in continental trade by 2025, according to the International Monetary Fund (IMF).
However, more than two years after the commencement of AfCFTA Nigeria’s trade value with other African countries in relation to its total foreign trade remains low.
The National Bureau of Statistics (NBS) report on Foreign Trade in Goods Statistics for Q1 2023 shows that at N842.6 billion, Nigeria intra-African trade was 6.99 per cent of its total foreign trade (N12.047 trillion) in Q1 2023.
This is against 7.4 per cent contribution to total foreign trade (N13.001 trillion) in Q1 2022.
Nigeria’s trade with other African countries also declined 24.87 per cent from N1.122 trillion in Q4 2022 to N842.6 billion in Q1 2023.
But Nigeria exported more than it imported, with exports rising from N444.418 billion in Q1 2022 to N665.10 billion in Q1 2023 while imports slashed from N512.513 billion to N177.50 billion.
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Decline in trade volume
Trade volume has also slashed since 2021 when AfCFTA took off, according to reporting by Vanguard.
Nigeria’s intra-African trade as a proportion of total foreign trade in 2022 was 11.03 per cent; it dropped to 7.46 per cent in 2021 and to 6.5 per cent in 2022.
Okiki Oladipo, Senior Analyst, Parthian Partners, said despite the potential of AfCFTA, implementation remains an eyesore given the state of infrastructure among African countries and economic ties.
“When agreements like this that cut across both Anglophone and Francophone countries become a thing, there are usually many barriers to be pulled down. Thus, African nations have struggled with optimising the agreement,” he explained.
“For Nigeria to be better positioned to milk the benefit, there is a need to promote industrialisation in the country vis-a-vis fixing infrastructure that would aid optimal production cost.
“When this is done, Nigeria will become an export hub into other African countries, meeting the local content requirement while also exporting at a competitive price.”