The African Continental Free Trade Area has the potential to increase employment opportunities and incomes

Although Nigeria is yet to fully start implementing and taking advantage of the African Continental Free Trade Area (AfCFTA), the country’s total exports within the continent maintained an upward trend in the last few years, amounting to N7.55 trillion between 2020 and 2022, findings by New Telegraph show. According to the latest data on the country’s foreign trade in goods recently released by the National Bureau of Statistics (NBS), the value of Nigeria’s total exports to other African countries stood at N2.66 trillion in 2022 compared with N2.51trillion and N2.37trillion in 2021 and 2020 respectively.

In March 2018, African heads of state and government, had at an extraordinary summit in Kigali, Rwanda, agreed to establish the AfCFTA. The initiative, which aims to boost intra-African trade, brings together 1.3 billion people in a $3.4 trillion economic bloc, thus making it the largest free-trade area in the world in terms of the number of participating countries since the formation of the World Trade Organization (WTO). Originally scheduled to kick off on July 1, 2020, the Covid-19 crisis, and other factors led to the implementation date for the agreement being shifted to January 1, 2021.

After an initial delay, caused by what it said was the need to critically evaluate the agreement with respect to Nigeria’s national interest and implications for the economy, the Federal Government approved the ratification of the pact on November 4, 2020 and deposited the instrument of ratification on December 15, 2020, thus becoming the 34th State Party to ratify the treaty. Available data indicates that as at February 2023, 46 of the 54 signatories(85.2%) have deposited their instruments of AfCFTA ratification. Commenting on the agreement in 2020, then World Bank Chief Economist for Africa, Albert Zeufack, said:

“The African Continental Free Trade Area has the potential to increase employment opportunities and incomes, helping to expand opportunities for all Africans. “The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive. But successful implementation will be key, including careful monitoring of impacts on all workers—women and men, skilled and unskilled—across all countries and sectors, ensuring the agreement’s full benefit.” Experts point out that while Nigeria is the largest economy on the continent, the bulk of its exports goes to Europe, Asia and America. Indeed, in its foreign trade in goods statistics report for Q4’22 released late last month, the NBS stated: “The value of total export stood atN6,359.61 billion in the fourth quarter of 2022, this accounted for 54.25 per cent of total trade.

The value of exports increased in Q4’22 by 7.17 per cent above the level recorded in Q3’22 and also by 10.28 per cent when compared to the value recorded in Q4’21. “Exports by section revealed that Nigeria exported mainly ‘mineral products’ which amounted to N5,667.22 billion, or 89.11 per cent of total export value; followed by ‘Vehicles, aircraft and parts thereof; vessels etc.’, which were valued atN199.29billion (or 3.13% of the value of total exports) and ‘Products of the chemical and allied industries’ worth N169.27 billion (2.66% of the value of total exports).” The report further said: “Exports trade by region in Q4’22 shows that Nigeria exported most products to Europe with goods valued at N2,796.41billion or 43.97 per cent of total exports, followed by exports to Asia valued at N1,429.02billion (22.47% of total exports), exports to America was valued at N1,150.20 billion, (18.09% of total exports) while export to other African countries stood at N942.13 billion or 14.81 per cent of total exports of which N553.79 billion worth of goods were exported to ECOWAS countries.

“Nigeria’s exports trading partners revealed that Spain was Nigeria’s top export destination during the quarter under review with the highest volume of export trade valued at N617.17 billion representing 9.70 per cent of total exports.