Nigeria’s intra-African trade has failed to meet expectations despite the introduction of the African Continental Free Trade Area (AfCFTA). In the first quarter of 2023 (Q1’23), the trade value experienced a significant decline of 11.95%, dropping to N842.6 billion from N956.93 billion in Q1’22.
The AfCFTA aims to facilitate the free movement of goods and services across African borders, enhancing the continent’s trading position globally. According to the International Monetary Fund (IMF), it is projected to boost regional trade by 52.3% by 2025.
However, Nigeria’s trade value with other African countries remains disproportionately low compared to its total foreign trade, even three years after the implementation of the AfCFTA. The latest report from the National Bureau of Statistics (NBS) on Foreign Trade in Goods Statistics for Q1’23 reveals that Nigeria’s intra-African trade accounted for just 6.99% of its total foreign trade (N12.047 trillion) during that period. This is a decrease from the 7.4% contribution recorded in Q1’22 when the total foreign trade was N13.001 trillion.
On a quarter-on-quarter basis, Nigeria’s trade value with other African countries experienced a significant decline of 24.87%, falling to N842.6 billion in Q1’23 from N1.122 trillion in Q4’22.
Analyzing the trade data further, it is evident that Nigeria’s exports outweighed its imports. The export value increased to N665.10 billion in Q1’23 from N444.418 billion in Q1’22, while imports decreased to N177.50 billion in Q1’23 from N512.513 billion in the corresponding period of 2022.
Examining the trend over the years, the trade volume has been consistently declining since the commencement of the AfCFTA in 2021. In 2020, Nigeria’s intra-African trade accounted for 11.03% of its total foreign trade, which decreased to 7.46% in 2021 and further plummeted to 6.5% in 2022.
Okiki Oladipo, a Senior Analyst at Parthian Partners, commented on the situation, highlighting the challenges of implementing the AfCFTA agreement. He emphasized the need for Nigeria to prioritize industrialization and address infrastructure issues to enhance production efficiency and reap the benefits of the agreement.
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