It is expedient that Nigeria takes advantage of and maximise the gains of the AFCFTA to improve inter-regional trade and increase its foreign exchange earning.
As the COVID-19 pandemic has negatively impacted crude oil prices, leading to significant decline in government revenues and foreign exchange earnings, it has become expedient now more than ever before to diversify and create new trade opportunities for Nigerians.
This was part of the remarks by the Central Bank of Nigeria Governor, Godwin Emefiele, at the Zenith Bank’s 2021 Export Seminar held on Monday.
Emefiele said while the Nigerian economy was able to exit recession in the 4th quarter of 2020 owing to significant interventions by the monetary and fiscal authorities, full recovery would require greater contributions from the private sector through facilitation of the growth of non-oil exports.
In this regard, the CBN governor said that AFCFTA offers significant opportunities for the Nigerian private sector to expand into new markets, and seek new export opportunities, particularly in the area of Manufacturing, ICT, Agriculture and Financial services.
“Full implementation of the AFCFTA is expected to give Nigerian firms preferential access to markets in Africa worth $504.17 billion in goods and $162 billion in services. I believe that we should seize this opportunity to ensure that Nigeria serves as a significant hub for international and domestic manufacturing companies seeking to serve the West, Central and East African Markets,” he noted.
Emefiele noted that Nigeria’s young, technology-savvy population has been leveraging technological applications to improve service delivery in many areas to consumers, but AFCFTA can provide an opportunity for these young talented Nigerians to expand their services across the African region.
To help support creation of jobs and improve foreign exchange inflows, he suggested the development of trade portals that could support instant sales of goods manufactured in Nigeria to consumers in other parts of Africa.
He said further: “At the CBN we have taken considerable steps to improve the productive capacity of businesses, which would enable them take advantage of export opportunities in Africa. Our intervention programs in the agriculture and manufacturing sectors are helping to enable businesses expand their scale of production, which is meeting growing domestic demand for goods, but also providing goods for the export market.
“In addition, we have set up a N500-billion non-oil export stimulation facility with the Nigerian Export Import Bank (NEXIM). This initiative will also help to enable greater exports of processed agriculture commodities into other markets in Africa and in the global market.”
To maximise the gains of AFCFTA, Emefiele said it is also important to improve the business environment in Nigeria.
In this regard, he said the CBN through its Trade Monitoring System portal is helping to reduce the time it takes to complete the export documentation process, as faster turnaround time could help to reduce delivery time for goods destined for exports, and enable businesses expand their output.
He said the bank is also working with stakeholders to reposition the Nigerian Commodity Exchange.
Emefiele said that supporting greater trade within Africa would also require the presence of a viable payment settlement system; and that the CBN is currently working with key stakeholders in the African continent to improve the underlying payment infrastructure to support greater intra-regional trade, through the Pan African Payments and Settlement System.
“This initiative will enable payments in our local currency for goods in other African countries and vice versa, without the need for a third-party currency. This initiative will help to reduce the cost of cross-border trade, improve convertibility of the Naira, and increase trade opportunities for Nigerian businesses in Africa,” he said.
He enjoined exporters to repatriate their export proceeds as required by law.
“The CBN guarantees that exporters will have unfettered access to their export proceeds and we do expect that exporters would reciprocate the good gestures of the Bank by repatriating their export proceeds to improve foreign exchange inflows into the country.”