The African Continental Free Trade Area (AfCFTA) has the potential to transform the African continent by connecting 54 countries with a combined population of 1.3 billion and GDP of $3.4tn.
However, in order to reap the benefits of this landmark trade agreement, non-tariff barriers and hurdles affecting cross-border goods crossings must be addressed, according to a new report by the World Bank Group.
The report, titled “Can African trade integration be a game changer?”, highlights the challenges that the AfCFTA faces and stresses the need for African businesses to see the opportunities it presents.
The report suggests that the agreement has the potential to bring significant economic and social benefits in the form of faster economic growth, higher incomes, and less poverty.
To achieve these benefits, the World Bank emphasises the need to tackle non-tariff barriers and hurdles affecting cross-border crossings of goods. It also stresses the importance of reducing barriers to trade in services, as each country has its own regulations covering industries such as logistics and transport, financial services, tourism, and communications, Investors King reports.
The report suggests that the signing of the agreement is just the first step and that it will take much more to unlock its potential gains in trade, investment, and jobs. African nations will need to support the AfCFTA Permanent Secretariat, which is charged with administering the agreement, and domestic laws and regulations will need to be harmonised with the agreement’s protocols on investment, intellectual property rights, competition, and digital trade.
Stakeholders must encourage progressive liberalisation of cross-border trade and investment policies in line with AfCFTA protocols to establish the groundwork for regional value chains in Africa. The report also advises member states to strengthen cross-border trade and investment in services by facilitating trade in digital services, removing FDI restrictions, and liberalising the movement of workers.
In addition to ministries of trade, other government agencies in each country should also become familiar with the AfCFTA and learn the key role they may be called to play in its implementation on the ground. The report suggests that the African private sector, including SMEs that could benefit from AfCFTA, should become more familiar with the different chapters of the treaty and learn how the topics addressed – such as the liberalisation of trade in services – can be leveraged to boost their businesses.
The World Bank Group’s report highlights the immense potential of the AfCFTA to transform the African continent by promoting trade, investment, and job creation. However, for this potential to be realised, non-tariff barriers and hurdles affecting cross-border goods crossings must be addressed.
African nations must work together with the private sector and civil society to ensure that the promise of the AfCFTA can finally be a game changer for Africa and reap its many benefits for its people.
Nigeria’s GDP Grows by 3.46% in Q4 2023, Driven by Services
Nigeria’s Gross Domestic Product (GDP) grew by 3.46% in the fourth quarter (Q4) of 2023 on the back of robust performance of the services sector, according to data released by the National Bureau of Statistics (NBS).
The GDP expansion though slightly lower than the 3.52% recorded in the same period of 2022, reflects a positive trajectory for the Nigerian economy amid ongoing challenges.
The growth rate surpassed the 2.54% recorded in the preceding quarter, indicating a rebound in economic activity.
The services sector emerged as the key driver of growth expanding by 3.98% and contributing 56.55% to the overall GDP.
This sector’s resilience underscores its pivotal role in Nigeria’s economic landscape, encompassing diverse industries such as telecommunications, finance, and real estate.
Also, the agriculture sector experienced growth, expanding by 2.10% compared to the same period in 2022.
Meanwhile, the industry sector recorded a notable improvement, growing by 3.86%, a stark contrast to the -0.94% contraction observed in the fourth quarter of 2022.
On an annual basis, Nigeria’s GDP expanded by 2.74% in 2023 compared to 3.10% in the previous year, reflecting sustained but moderated growth.
The positive trajectory in GDP growth reflects resilience in the face of various economic challenges.
However, sustaining and accelerating growth will require continued efforts to address structural bottlenecks, foster investment, and promote inclusive economic policies across sectors.
Nigeria’s Oil Sector Growth
During the fourth quarter of 2023, Nigeria’s oil sector posted a real growth rate of 12.11% year-on-year, signifying a significant improvement from previous periods.
This was driven by the surge in average daily oil production to 1.55 million barrels per day (mbpd), a positive shift in the sector’s performance.
Despite challenges such as global market fluctuations and production constraints, the oil sector contributed 4.70% to the nation’s total real GDP in Q4 2023.
Nigeria’s Non-Oil Sector
Nigeria’s non-oil sector sustained growth momentum, posting a 3.07% real growth rate in Q4 2023.
This growth was primarily attributed to key industries including finance, telecommunications, agriculture, manufacturing, and construction.
Accounting for 95.30% of the nation’s GDP in the same quarter, the non-oil sector continues to drive economic diversification efforts and reduce dependence on oil revenues.
Despite facing challenges, such as infrastructure deficits and regulatory bottlenecks, the sector’s resilience underscores its pivotal role in fostering sustainable economic development and inclusive growth agendas.
Senate Rejects Ministry of Power’s Proposed Electricity Tariff Hikes
The Nigerian Senate has firmly opposed the Ministry of Power’s proposed electricity tariff hikes, emphasizing the need to alleviate the burden on citizens amidst prevailing economic hardships.
The rejection comes as a response to the Ministry’s consideration of increasing electricity tariffs and removing subsidies in the face of escalating economic challenges across the nation.
During a recent plenary session, Senator Aminu Abbas moved a motion urging the Senate to retain electricity subsidies to mitigate the impact of rising living costs on Nigerians.
The motion garnered unanimous support, with senators expressing concerns over the implications of tariff hikes on an already financially strained populace.
The Senate’s resolution also directed the Committee on Power to conduct a comprehensive investigation into the N2 trillion required for electricity subsidy payments, outstanding debts within the sector, and the state of metering nationwide.
This decision reflects the Senate’s commitment to ensuring transparency and accountability in the power sector’s financial management.
The rejection underscores the Senate’s stance against policies that could exacerbate the financial burdens faced by Nigerian citizens.
The move aligns with the Senate’s broader efforts to prioritize the welfare of the populace and advocate for measures that promote economic stability and affordability.
Nigerian Oil Transporters End Two-Day Operation Suspension After Government Intervention
After a two-day suspension of operations by the Nigerian Association of Road Transport Owners (NARTO), oil transporters have resumed operations following government intervention.
The suspension had caused fuel queues in many states and the Federal Capital Territory, raising concerns among motorists.
The resolution came after talks mediated by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, in Abuja.
Representatives from NARTO, government officials, and stakeholders from the downstream oil sector were present at the meeting.
The agreement reached includes an adjustment in the freight rate for petroleum transporters and a commitment to address other concerns raised by NARTO members.
The decision to resume operations aims to alleviate the challenges faced by Nigerians in accessing petroleum products.
Yusuf Othman, the President of NARTO, confirmed the end of the suspension, urging members to return to work.
The association had initially suspended operations due to the high operational costs, particularly the escalating price of diesel needed to power their trucks for product transportation across the nation.
With operations now back on track, it is hoped that the resumption will help stabilize fuel distribution and prevent further scarcity, ensuring smoother access to petroleum products for consumers across Nigeria.
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