Market News
Exporters decry Africa’s low trade performance despite AfCFTA - PUNCH
Exporters and stakeholders have raised concerns about the difficulties of trading within Africa, describing the logistics and policy barriers as more challenging than exporting to other continents, despite the proximity.
According to the National Bureau of Statistics report on Foreign Trade in Goods for the third quarter of 2024, exports to Africa accounted for a mere 12.13 per cent (N2,486tn) of Nigeria’s total exports, significantly trailing behind Europe (N9.23tn or 45.07 per cent) and Asia (N5.18tn or 25.31 per cent).
Meanwhile, exports to countries under the Economic Community of West African States stood at N1.54tn, with major destinations including Ivory Coast (N662.71bn), South Africa (N621.68bn), and Togo (N574.93bn), as opposed to Spain (N2.27tn), which was the top export location with 11.07 per cent of total exports.
Other non-African countries that topped exports included the United States of America (N1.67tn or 8.25 per cent), France (N1.59tn or 7.75 per cent), the Netherlands (N1.43tn or 7 per cent), and Italy (N1.37tn or 6.72 per cent).
According to the NBS, “The five (non-African) countries collectively accounted for 40.79 per cent of the value of total exports in Q3, 2024,” as opposed to the continent of Africa’s 12.13 per cent.
The PUNCH spoke with exporters, especially small and medium enterprises, who underscored the challenges that result in lower trade with African countries as against other continents, despite the African Continental Free Trade Area.
The Chief Executive Officer of Dasun Integrated Farms Limited, Bosun Solarin, bemoaned the logistics challenges plaguing intra-African trade. She said, “You can even get some things to Europe or the US cheaper than you will to other countries in Africa. I’ve sent goods to Liverpool in the UK in 24 hours, but it can take seven working days to Ghana.
The cost is so much, and the delays at borders are frustrating.”
Solarin also shared her experience travelling by road from Dakar to Lagos, highlighting poor infrastructure and border delays, noting, “The stretch of trucks from Senegal to Mali and then to Ivory Coast was disheartening. While sending goods by road might seem economical, the risks and inefficiencies often outweigh the benefits.”
Similarly, the Creative Director of JeriHouse of Design, Olaronke Olajide, described her ordeal trying to export to Mozambique. “It’s easier to send products to the UK or the US than within Africa. When I attempted to send something to Mozambique, it felt like a war zone. Ultimately, the item never even got there,” Olajide lamented.
SMEs fail to export more to African countries as sectoral insights revealed the most traded commodities were not representative of the goods traded more by small businesses and exporters.
The NBS data showed that Nigeria’s top exports to Africa were dominated by petroleum oils (N1.86tn or 74.99 per cent), with natural gas and electrical energy trailing far behind. In contrast, data from the Nigeria AfCFTA Coordination Office highlighted that women and youth exporters, who dominate Nigeria’s micro, small, and medium enterprises, focus on ready-to-wear clothing, shea butter, spices, and palm oil—products often excluded from large-scale trade agreements.
Olajide expressed frustration, noting the gap between the MSME sector and mainstream exports: “We are the backbone of local production, but it feels like our products don’t feature prominently in official trade discussions.”
In a phone interview with The PUNCH, the local export authority elaborated on the trade barriers. Deputy Director of Market Access at the Nigerian Export Promotion Council, Peter Njoku, attributed some challenges to non-tariff barriers and currency issues, explaining that “Many African countries have different currencies, and there’s no single currency for trade like the dollar or euro in other regions.”
He emphasised the complexities of regulations, noting, “While those trading with other countries have specific rules and guidelines that, once you meet those up, you go on and trade, in Africa, there are some specific rules that you are not aware of, which makes trade more challenging.
“When there are things you don’t know, and when you enter, they now start coming up. It makes it more difficult to appraise where the rules are specified.”
Njoku advocated for quicker AfCFTA implementation, stressing the need for a common currency to facilitate seamless transactions.
Exporters unanimously called for improved trade policies, reduced logistical bottlenecks, and better support for MSMEs within the AfCFTA framework. “We need a system that prioritises both large- and small-scale exporters, especially those producing goods locally. If trading within Africa remains this cumbersome, we might continue looking outward, even when opportunities lie next door,” stated Solarin.
With Nigeria’s total exports accounting for 58.27% of its total trade, stakeholders believe that addressing these challenges could significantly boost the country’s trade performance within Africa.
