The enthusiasm that greeted the take-off of the African Continental Free Trade Area (AfCFTA) on 1 January 2021 has yet to be justified as the proportion of Nigeria’s foreign trade with the rest of Africa remains virtually the same nearly three years after the operationalization of the agreement, the latest foreign trade data from the National Bureau of Statistics (NBS) have shown.
Nigeria’s total foreign trade for the first three quarters of 2023, comprising imports and exports, amounted to N19.74 trillion, according to the NBS. A breakdown of this figure showed that Nigeria traded N660.22 billion with the rest of Africa; N2.63 trillion with the Americas; N7.86 trillion with Europe; N8.51 trillion with Asia, and N72.33 billion with countries in Oceania.
When each continent’s trade with Nigeria is weighed relative to Nigeria’s total trade, Africa accounted for just 3.3 percent of Nigeria’s foreign trade from January to September 2023; the Americas accounted for 13.3 percent; Europe, 39.8 percent; Asia, 43.1 percent, while Oceania accounted for 0.4 percent.
In 2020, Africa accounted for 3.2 percent of Nigeria’s foreign trade; the Americas accounted for 12.4 percent; Europe, 36.7 percent; Asia, 47 percent, while on the periphery was Oceania which accounted for 0.7 percent of Nigeria’s international trade.
AfCFTA was established in 2018 but commenced operations in January 2021 among 54 out of the 55 countries on the African continent. Further, 44 countries have deposited their instrument of ratification while only four have ratified the protocol on the movement of people.
As a free trade agreement, it is meant to enhance free movement of goods and services among African countries, leading to the uplifting of 30 million Africans out of poverty with income across Africa expected to be boosted by $450 billion.
“But some form of looking inward could solve Nigeria’s economic woes. Viable options would be improving the value addition of top agricultural traded products like cashew and cocoa, as well as mineral resources like steel. More importantly, Nigeria needs to show its political will, improve access, and encourage local businesses, particularly SMEs, to participate in the AfCFTA by removing non-tariff barriers,” FDC, a Lagos-based think tank cum investment house, said in a note to investors.
In Africa, Nigeria’s trading partners include countries within the West African subregion, and Ethiopia in East Africa, South Africa in Southern Africa, as well as Cameroon in Central Africa, among others.
With ECOWAS, Nigeria traded N75.02 billion worth of goods in 2020; N82.48 billion in 2021; N136.03 billion in 2022, and N135.54 billion from January to September 2023.
Foreign trade transactions with other African countries amounted to N331.86 billion in 2020; N468.83 billion in 2021; N602.22 billion in 2022, and N524.68 billion from January to September 2023.
Trade with the United States of America (USA) was worth N1.03 trillion in 2020; N1.27 trillion in 2021; N1.42 trillion in 2022, and N599.53 billion from January to September 2023.
Canada traded N135.36 billion worth of goods and services with Nigeria in 2020; N188.41 billion in 2021; N180.49 billion in 2022, and N215.82 billion from January to September 2023.
In Europe, the Netherlands is Nigeria’s largest trading partner. In 2020, Orange country recorded N1.16 trillion worth of foreign trading activities with Nigeria, followed by N2.14 trillion in 2021; N2.65 trillion in 2022, and in the first nine months of this year, Nigeria’s total trade with that country amounted to N1.08 trillion.
Germany is the second largest trading partner in the EU. It recorded N395.3 billion worth of trade with Nigeria in 2020; N509.76 billion in 2021; N505.73 billion in 2022, and N449.19 billion during the first three quarters of 2023.
The third largest trading partner within the EU oscillates between the United Kingdom and France. In 2020, the UK’s trade with Nigeria was worth N282.15 billion, while France recorded N269.95 billion. However, in 2021, the UK’s trade with Nigeria stood at N326.05 billion, while France traded more, recording N469.71 billion worth of foreign trade with Nigeria.
In 2022, France’s trade with Nigeria was worth N671 billion, while the UK traded N574.40 billion. During the first nine months of this year, the UK’s trade with Nigeria was worth N462.47 billion, while that of France was worth N402.58 billion.
In Asia, China remains Nigeria’s largest trading partner. The Asian giant traded N3.23 trillion worth of trade with Nigeria in 2020; N5.16 trillion in 2021; N5.81 trillion in 2022, and N4.54 trillion from January to September 2023.
India, Nigeria’s second largest trading partner in Asia, traded N1.10 trillion worth of goods and services withh Nigeria in 2020; N1.84 trillion in 2021; N2.03 trillion in 2022, and N1.65 trillion from January to September 2023.
It should be noted that the average annual exchange rate of the naira to the US dollar has depreciated in the last few years. In the outgoing year, the naira to the greenback averaged N625.83/$. It was N423.30/$ in 2022; N399.14/$ in 2021, and N356.43/$ in 2020.
