Nigeria, according to a 2020 African Trade Report, accounts for only 7 percent of intra African trade.
That figure falls 43 points behind South Africa whose economy contributes 40 percent to trading numbers between African nations.
In the 2021 Macroeconomic Outlook by the Nigerian Economic Summit Group (NESG), a private sector-led think tank, Nigeria has less advantage in the African Continental Free Trade Area (AfCFTA).
The group stated that Nigeria is a resource-based economy and not diversified with an “improved transport infrastructure”.
It noted that Nigeria, Egypt, and Algeria combined contributed 50 percent to the continent’s GDP but only account for 11 percent to the intra African trade.
The report said, “Evidence has shown that African economies that are more diversified and have improved transport infrastructure, would benefit more from the trade pact than others that are resource-based and agricultural dependent.
“Putting this in context, South Africa currently accounts for 40 per cent of intra-African manufacturing imports. On the other hand, resource-based countries, such as, Algeria, Egypt and Nigeria – which collectively account for approximately 50 per cent of Africa’s GDP – contribute only 11 per cent to intra-African trade.
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“Another bone of contention is the issue of ‘rules of origin’, which constitutes a significant risk factor. This implies that protectionism practices by some countries could constitute a setback for the establishment of the ambitious single market for Africa. But there are several reasons to be optimistic.
“Nigeria could reap more gains through export diversification away from crude oil, as manufacturing exports currently account for an average of nine per cent of the country’s total exports.
“This suggests that efforts should be directed at strengthening domestic value chains, particularly the agro-allied industrial base.
“To achieve this, there is a need to attract private capital, most especially, FDI, that would allow for knowledge and technological transfers.
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“Finding a lasting solution to the Apapa gridlock by creating similar ports in other regions of the country, so as to ensure speedy clearance of consignments needs to be prioritised.
“Nigeria also needs to set standards for locally-made goods to enhance their attractiveness in the regional market.
“The Nigerian government as a matter of urgency needs to operate an efficient and corruption-free land border system, so as to guide against the importation of low-cost sub-standard products into the country.
“It is only when these and many more reforms are implemented that Nigeria can begin to reap the benefits of the trade deal.”
