The Governor of the Central Bank of Nigeria(CBN), Mr. Godwin Emefiele, has said that full implementation of the African Continental Free Trade Agreement (AfCFTA), is expected to give Nigerian firms preferential access to markets in Africa worth $504.17billion in goods and $162bn in services, making it a total of $666.17 billion.
This is just as he noted, that the AfCFTA offers significant opportunities for the Nigerian private sector to expand into new markets, and seek new export opportunities, particularly in the area of Manufacturing, ICT, Agriculture and Financial services, given the country’s growing advantage in these areas relative to her counterparts in other parts of Africa.
The CBN Governor who said this Tuesday, during his remarks at Zenith Bank’s 2021 Export Seminar, disclosed that supporting greater trade within Africa as well as with the global community is vital to the CBN’s objectives of enabling greater economic growth and creating employment opportunities for the growing population in Nigeria.
He stressed that trade enables specialization, economies of scale and also provides significant rewards to those who are innovative, as they can sell their goods and services to an expanded market, and urged Nigerians to seize the opportunity presented by AfCFTA to ensure that Nigeria serves as a significant hub for international and domestic manufacturing companies seeking to serve the West, Central and East African Markets.
The CBN Governor pointed out that COVID-19 pandemic and its resulting implications on crude oil prices in 2020, which led to a significant decline in government revenues, as well as in Nigeria’s foreign exchange earnings, served to strengthen the case that the country must diversify her economy and create new trade opportunities for Nigerians, as part of her recovery efforts.
He stated that although the Nigerian economy was fortunate to have emerged out of the recession in the 4th quarter of 2020, following two quarters of negative growth, however, a strong and well-balanced recovery will require additional contributions from the private sector in supporting greater growth of the non-oil exports.
Emefiele who noted that Nigeria has a very young, energetic, technological savvy population that have been leveraging technological applications to improve service delivery in the areas of finance, logistics and agriculture to consumers in Nigeria, expressed belief that the AfCFTA will provide an opportunity for these young talented Nigerians to expand their services across the African region.
The CBN helmsman stated also that improving the business environment in Nigeria is vital if the country is to harness the gains from the AfCFTA, adding that the Central Bank through its Trade Monitoring System portal (TRMS) is also helping to reduce the time it takes to complete the export documentation process, as faster turnaround time could help to reduce delivery time for goods destined for exports, and enable businesses expand their output.
While noting that supporting greater trade within Africa would also require the presence of a viable payment settlement system, he added that the CBN is working with key stakeholders in the African continent, particularly the AfreximBank to improve the underlying payment infrastructure to support greater intra-regional trade, through the Pan African Payments and Settlement System(PAPSS).
“This initiative will enable payments in our local currency for goods in other African countries and vice versa, without the need for a third-party currency. This initiative will help to reduce the cost of cross border trade, improve convertibility of the Naira, and increase trade opportunities for Nigerian businesses in Africa”, he said.
However, he pointed out that although Nigeria stands to gain from expanded trade, it is important to pay attention to the cost that expanded trade through the AfCFTA could have on local businesses and communities, adding that smuggling of goods produced in non-African countries into Nigeria, and abuse of rules of origin have often resulted in significant job losses and displacements of workers in key sectors of the economy such as agriculture and manufacturing.
“It is vital that Nigeria works with the governing body of the AfCFTA in addressing these concerns, as it has profound implications on unemployment and security in the country”, he disclosed.
