Nigeria accounts for only a paltry 1% in the value of African imports, a development which does not bode well for the largest economy in sub-Sahara Africa.
The above submission was made by scores of experts who spoke with journalists on the sidelines of the Intra African Trade Fair in Abuja recently.
According to these experts, there is need for improved intra-African trade engagement among the African Union. This becomes inevitable because Nigeria accounts for only a paltry 1% in the value of African imports.
Curiously, with Nigeria’s export potentials, Asia and North America present the greatest potential markets within the African sub-regions featuring among the 10 markets.
The Executive Director, Nigerian Export Promotion Council NEPC, Olusegun Awolowo disclosed this during the Intra African Trade Fair in Abuja, stating that a thorough look at Africa’s products demand from around the world shows Nigeria is suitably positioned to replace supplies from other regions of the world on some key products.
“It has been discovered that four of Africa’s high demand products are among Nigeria’s 11 priority products identified to diversify our export base under our Zero Oil Plan. These export potential products signify investment opportunities along value chains for each sector,” he said.
Thankfully, the NEPC boss said, “The IATF will serve as a platform for advancing Africa’s trade agenda. We are confident that this engagement session will generate sufficient interests and mobilise Nigerian companies to not only participate at the IATF, but to do so in a really significant manner. We should aim to make Nigerian products the first products of choice for African markets and the first step is to engage. This is just the beginning. Over the next few months, we will be engaging broadly with relevant government partners and the organised private sector to ensure that Nigeria showcases its best and maximises the IATF 2018 platform for enhanced trade relations.”
Echoing similar sentiments, the Vice President, Prof. Yemi Osinbajo lamented the low level of trade between Nigeria and other countries in Africa and expressed optimism that the government would in the short term correct the trade imbalance.
The administration of President Muhammadu Buhari, Osinbajo noted, understands the importance of trade in creating jobs and attracting investments, hence the government is determined to increase the level of Nigeria’s trade in the region.
“The South African share of intra-African trade as a percentage of the total African trade is 25 percent or $32bn, while Nigeria share of intra-African trade as a percentage of the total is only 5.5percent or $7.1bn. Despite the volume of informal trade which may not have been captured, we realise the need to seize this opportunity of this trade fair to promote Nigeria-African trade. I would like to assure you that Nigeria will participate effectively at the trade fair and use it effectively as an opportunity to showcase its trade and investment opportunities which are indeed very vast.”
Expectedly, the President of the African Export-Import Bank (Afreximbank), Dr. Benedict Oramah has said that the African Continental Free Trade Agreement (AFCFTA) has the potential to boost intra-African trade by 53 percent if import duties were eliminated as well as reducing non-tariff barriers. The AFCFTA will progressively eliminate tariffs on intra-Africa trade and make it easier for businesses to trade within the continent.
“We have realised that sustainable economic growth on the continent cannot be achieved quickly without participation from both the private and public sectors. The private sector has a crucial role to play in making regional integration work for Africa, because though trade agreements are signed by governments, it is the private sector that understands the constraints facing enterprises and it is in a position to take advantage of the opportunities created by such agreements and regional trade initiatives.”
On her part, the Managing Director, Intra-Trade Initiative Kanayo Awani said the trade fair seeks to promote foreign direct investment in the continent.
She said, trade between African countries has the greatest potential for building sustainable economic development and integration, according to African Economic Outlook 2017, a flagship report of the African Development Bank released in Ahmedabad during the 52nd Annual General Meetings, which commenced last Monday in the Indian city.
Citing data produced by its economists and peer institutions, the report said trade among African countries expanded from 10% in 2000 to about 16% in 2014, reflecting the continent’s recent economic upturns.
Africa’s GDP and its internal trade expanded fourfold over the past two decades, according to the report, which suggests that that intra-African trade is more resilient than exchanges with other regions of the world, largely because manufactured goods are less susceptible to price shocks which affect primary products that constitute over 50% of trade between the continent and other countries.
The report also cited low manufacturing and processing capacity as a major limiting factor for trade among African countries. Intra-African trade in manufacturing declined from 18% in 2005 to about 15% between 2010 and 2015. Most of Africa’s primary exports undergo little processing before they are re-exported, the report argues, citing cocoa beans from Côte d’Ivoire and Ghana and crude oil and petroleum products from Nigeria as examples. “Petroleum exports from Africa to the rest of the world stood at $85 billion, yet Africa’s fuel imports from outside the continent ranged between $63 billion and $84 billion from 2010 to 2015,” it reads.
“From 2007 to 2015, the continent’s light manufactured goods imports tripled to reach US $260 billion. Africa’s prospects for greater regional trade are also highlighted by its consumer market of nearly one billion people, the rising number of affluent consumers and the increasing mobility of investment capital,” the AEO says.
It further notes that global economic developments such as the creation the Trans-Pacific Partnership and Africa’s Continental Free Trade Area (CFTA) were likely to strengthen the continent’s appeal as a global trading partner. Similarly, Brexit, Britain’s exit from the European Union would rather strengthen Africa’s trade ties with Europe that weaken it.
