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The intra-African trade still remains low

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By Nicole

Two years after the AFCFTA, the single continental market has been delayed.

It is said that the Implementation of the single continental market has been delayed for two years after the world’s largest free trade area became operational on January 1, 2021, with much fanfare. There are a number of causes for this, including the COVID-19 pandemic, a lack of agreement on the rules of origin for some product lines, and the failure of 10 out of the 54 signatories to ratify it. Despite the fact that some African countries have begun trading a small amount of goods under the African Continental Free Trade Area (AFCFTA) agreement through the pilot phase, trade is still hampered by logistical and tariff issues, with the preference still going to trading partners outside the continent.

The AFCFTA agreement stipulates that cross-border taxes on 90% of imports should be eliminated at the latest by 2030, however many tariffs will be phased out far faster. Tariffs are just one of several obstacles to trade in Africa, though. Given that three-quarters of Africa’s goods are transported on roads, which are sometimes not well-built, logistics is another significant obstacle. The African Development Bank claims that this raises the cost of logistics on the continent, which can increase the price of African commodities by up to 75%.

Nigeria and Africa’s trade in goods in about five years stood at N15.85T.

According to figures from the National Bureau of Statistics (NBS), Nigeria’s trade in goods with the rest of Africa in the last five years was N15.85 trillion. The data is for 2018 through September of current year. The amount represents 9.3% of the nation’s overall international commerce during that time, highlighting the meagre level of intra-African trade. The value of commerce between the nation and the Economic Community of West African States (ECOWAS) members averaged N1.42 trillion each year over that time, totaling N7.09 trillion or 4.2% of all trade during that time.

Nigeria’s foreign commerce during that time was estimated to be worth N170.27 trillion, with exports accounting for somewhat more, 52.6% of the nominal value. According to the historical pattern, Nigeria dominated regional commerce throughout the period under study. Exports totaled N12.76 trillion, or 80.5 percent, of the N15.85 trillion in regional commerce, while imports were a pitiful N3.09 trillion. Additionally, 7.5% of the trade value in the period came from commodities imported via official methods from other ECOWAS nations. The value was N528.6 billion, but the country’s exports to its neighbours increased by a factor of more than 12. (N6.36 trillion).

African Regional Integration Index does not push the single market.

The NBS numbers support the low intra-regional commerce, which is modest, Anaemic at best, and largely regressive. For instance, the amount increased by approximately 80% in 2019 to N5.03 trillion before declining by 44.7% the following year. The value of commerce between the largest regional economy and other African nations somewhat increased last year (6.6 per cent). The valuation was N2.28 trillion as of September, which brings the annualized projection to N3.04 trillion, or roughly 2.5% more than last year’s performance.

Foreigners are reportedly allowed to move around the continent more easily than Africans themselves, according to the African Regional Integration Index, which does not reflect past attempts to advance the single market and free movement agenda. With a score of 0.383 on average, trade integration across the African continent is ranked towards the bottom of the scale. It also notes that average import taxes and average non-tariff trade barriers are higher in Africa. The organized private sector is concerned since Nigeria has not yet finalized its tariff schedule or revealed the rules and implementation plan for the trade agreement.

Country must pay attention to trade facilitation rules and regulations.

Francis Anatogu, the secretary of the National Action Committee on the AFCFTA, had stated that all was prepared for Nigeria to start trading under the agreement. According to Anatogu, Nigeria must focus on trade facilitation, institutional coordination between the Federal Government and the private sector, policy, infrastructure, trade information, free movement of people and goods, and finance. However, he emphasized the need to increase the amount of domestic transactions while also encouraging and helping companies to tap into the African markets. In order for the nation to benefit from the AFCFTA, he also emphasized the necessity to entice foreign investment.


Related Link

AFTCA: Website

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Admin
9 months ago

The intra-African trade still remains low – Two years after the AFCFTA, the single continental market has been delayed. – Express your point of view.

Abusi
Abusi
Member
9 months ago

We can help improve our Intra- African trade. It can help facilitate trade between African countries. It will thus be in interest of the Africa continent.

Tonerol10
Tonerol10
Member
9 months ago

The intra-African trade still remains low. We have to look for a way to improve and make it better.

Iyanu12345ogg
Iyanu12345ogg
Member
9 months ago

We can help improve our Intra- African trade. It can help facilitate trade between African countries. It will thus be in interest of the Africa continent.

Haykaylyon26
Haykaylyon26
Member
9 months ago

Improvement need to be made on the intra African trade for things to go smooth in our country, as the trade is low is affecting us. We need to made a strong intra African trade so we can benefit us

Ultra0711
Ultra0711
Member
9 months ago

With the situation on ground it’s clearly obvious that more needs tone done to enhance and boost the Intra- African trade.

Kazeem1
Kazeem1
Member
9 months ago

After the world’s largest free trade area was announced to go live last year, the implementation of the single continental market has been pushed back two years.

Adesanyaj72
Adesanyaj72
Member
9 months ago

While the African Continental Free Trade Area accord has seen a minor amount of trade between some African countries during its pilot phase, many more African countries are still waiting to join.

theApr
theApr
Member
9 months ago

According to the African Development Bank, this drives up the cost of logistics on the continent, which can push up the cost of African goods by as much as 75%.

Adeolastan
Adeolastan
Member
9 months ago

The intra- Africa trade will still remain low because of many factor and one of it is the issue of currency.No how Africa trade can grow with this because all that continent across the globe except Africa have single currency for proper tradem

Chibuzor
Chibuzor
Member
9 months ago

Tariffs are just one of several barriers to commerce in Africa, and as a result, they have a significant impact on the situation.

Hassan Isa
Hassan Isa
Member
9 months ago

The fact that three-quarters of Africa’s goods are transported on roads, which are not always in good repair, is another important impediment in the region’s logistical system.

Godsewill Ifeanyi
Godsewill Ifeanyi
Member
9 months ago

According to the National Bureau of Statistics data, intraregional commerce is relatively low, anemic at best, and generally regressive. This commerce is minimal.

Taiwoo
Taiwoo
Member
9 months ago

Considering Nigeria has not yet completed its tariff schedule or disclosed the regulations and implementation strategy for the trade agreement, the organized private sector is worried about the country’s lack of preparedness.

Nwachukwu Kingsley
Nwachukwu Kingsley
Member
9 months ago

The necessity of increasing the volume of transactions on a domestic level while simultaneously promoting and assisting businesses in their efforts to enter African markets.

Remi1
Remi1
Member
9 months ago

The historical record indicates that throughout the research period, Nigeria dominated regional trade. Of the N15.85 trillion in regional trade, exports accounted for N12.76 trillion, or 80.5 percent, while imports were a pathetic N3.09 trillion.

SarahDiv
SarahDiv
Member
9 months ago

To make AFCFTA come to full really, taxation should be look into. If it is possible to reduce it, then we are sure of bringing the dream to reality.

DimOla
DimOla
Member
9 months ago

To prevent further delay in AFCFTA every country should work on their policies and their taxation system.