Except the Federal Government improves on infrastructure to boost local manufacturing, indications are rife that the signatory to the African Continental Free Trade Agreement (AfCFTA) may further hurt the country to the advantage of others.
Details to this effect emanated during the week from a report by the Chairman, Technical Work Group Presidential Committee on the Impact and Readiness Assessment of the AfCFTA, Desmond Guobadia.
Apart from obvious fears nursed generally that Nigeria might become a dumping ground for substandard goods from other countries within the continent, an already established $13.2 billion export deficit may further worsen if things fail to improve locally.
According to the report, Nigeria has been experiencing u favourable balance of trade in service sector vis-a-vis other African countries.
“For example, in 2017, Nigeria’s import of services, at $18.2 billion, far outweighed exports, at $5 billion, resulting in a huge balance of trade deficit of $13.2 billion.
“On the other hand, Egypt and Morocco experienced trade surplus,” he noted.
The report, which was presented at the Annual Banking and Finance Conference in Abuja, identified service sectors that dominated Nigeria’s export to include transport, travel and other business services.
“For example, in 2017, travel service, which include citizens’ expenditure for business and personal travel on short term trips abroad more than one year for education, health, leisure, etc., amounted to $8.33 billion or 36 per cent of Nigeria’s total trade in services,” the report noted.
It also clarified that in contrast, the financial service sector [including insurance and pension], an area where Nigeria has comparative advantage, contributed a mere $1.7 billion ($1.35 billion imports and $0.36 billion exports) to Nigeria’s total trade in services.
The report, however, observed that there was room for growth as Nigerian banks have a role to play in this regard.
It further identified Nigeria’s export to Africa to include crude oil, (82 per cent), natural gas (4.2 per cent), electrical energy (2.1 per cent), cigarettes (two per cent), vessels (1.8 per cent) and other products (72 per cent).
According to Guobadia, “the major destinations of Nigeria’s goods in Africa are South Africa, Togo, Cote d’Ivoire, Swaziland, and Egypt.
“Nigeria’s top imports from Africa include polypropylene, fertilizers, refined petroleum products, chemicals, apples, frozen fish and palm oil.”
He, however, pointed out that since manufactured products were mainly the focus of Nigeria’s development agenda, AfCFTA, therefore, provides it with the opportunity to realize her economic growth and diversification aspirations based on the African market.
“Aiming to export 10 per cent of Africa’s total import needs from Nigeria would be the equivalent of doubling Nigeria’s total global exports.
“For instance, Africa imports over $1 billion per annum of refined petroleum, iron/steel, plastics, crude oil, gas, ru. Er, fishery, aluminum, cement, leather, soya, auto and parts, textile, chemicals, sugar, rice, oil, palm, fertilizer, cotton, beef, and livestock. These are key products captured in Nigeria’s backward integration agenda,” the report added.
AfCFTA has among its objectives the strengthening of Africa’s regional economic communities, establishment t of a free trade area, common external tariff, and common market, gradual removal of obstacles to free movement of persons, goods, services, capital and the right of residence and establishment.
It also proposes the elimination of duties on 90 per cent of tariff lines in five years and 10 years for the elimination of tariffs on products on the Sensitive List.
The Sensitive List covers specific products whose tariff lines will not be liberalized until after 10 years of implementation of the trade pact while the Exclusive List covers products whose tariff lines will be completely exempted from liberalisation.
Source : newtelegraphng.com
Keywords : Africa, News, Economy, Nigeria, AfCFTA, Export