AfCFTA: Nigeria Imports to Rise by 251% -Report

  • AfCFTA: Nigeria Imports to Rise by 251% -Report

A research conducted by the Centre for Trade and Development Initiatives, University of Ibadan, showed the newly signed African Continental Free Trade Area agreement could increase Nigeria’s import by at least 251 percent in the next 15 years.

The research was based on goods currently attracting 20 percent import duty.

Findings from the research showed Nigeria had the lowest import penetration from other African nations in Africa. Therefore, the inability to penetrate Nigeria, Africa’s largest market, has created interests among African nations, the report stated.

“This obviously makes the country an export target for many African countries in the AfCFTA. Nigeria is trailed by South Africa, Tanzania, Cameroun and Egypt in the same level recording about 30 per cent import penetration,” it stated.

The report categorically stated, “A three-phase liberalisation tariff rates from five per cent, 10 per cent, and 20 per cent to zero will likely generate higher surge of imported manufactured goods to the tune of about 159.5 per cent, 183 per cent and 251.4 per cent, respectively on the average during the 15-year period. The import growths would be higher if there were no room for exclusion.”

The research endorsed by the Manufacturers Association of Nigeria sought to investigate the likely impact of AfCFTA on the manufacturing sector.

It also explained that “Import will surge in all the manufacturing sectoral groups and by extension the77 subsectors in the third phase of the liberalisation. Particularly, tariff cuts would trigger increases in import for food, beverages and tobacco, 91 per cent; chemical and pharmaceutical products, 180.7 per cent; plastic and rubber products, 111.6 per cent; wood and wood products, 96.2 per cent; textile, apparel and footwear, 55.2 per cent; non-metallic, 67.2 per cent; electrical and electronics, 218.2 per cent; and motor vehicles and Assembly, 2000 per cent.”

The research concluded that because of the high manufacturing cost in Nigeria compared to the continental average, the trade agreement would have a negative impact on the sector.

It stated, “The change in domestic outputs of manufacturing sector is negative and ranges from -10.00 per cent to -0.228 per cent; thus indicating that operators in the sector may close shop.

“Investment and employment in all industries will fall in the third phase (2029-2033) implementation of AfCFTA.”

The research is in line with Investors King analysis that the AfCFTA agreement will turn Nigeria to dumping ground of African products given Nigeria’s current challenges.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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