Discover how Nigeria’s intra-Africa trade has soared by 195% in Q2 2024, highlighting the impact and potential of the AfCFTA on regional trade.
In an impressive turn, Nigeria’s intra-Africa trade marked a substantial 195% year-on-year growth in the second quarter of 2024. This surge stems largely from the country’s increased market access under the African Continental Free Trade Area (AfCFTA), which aims to enhance economic integration across the continent.
Key Trade Metrics and Insights
Nigeria’s intra-Africa trade climbed to N2.911 trillion, accounting for 9.13% of its total foreign trade, which stood at N31.9 trillion in Q2’24. This represents a significant increase from the 7.73% contribution during the same period in the previous year. Quarter-on-quarter analysis further indicates a 10.3% rise in trade with other African nations, moving from N2.639 trillion in Q1’24 to N2.911 trillion in Q2’24.
Contributing Factors to Trade Enhancement
David Adonri, Vice Chairman at Highcap Securities, attributes this growth not to an increase in exports but to a significant rise in imports needed to satisfy consumer goods shortages. “The increase in intra-African trade by Nigeria may not be due to export by Nigeria but escalation of imports to meet shortage in consumer goods,” Adonri explains, noting that “opening of borders facilitated the jump in imports.”
Benefits from AfCFTA Implementation
Contrary to the import-driven growth narrative, Mercy Okon, a Senior Analyst at Parthian Partners, points to the benefits accruing from AfCFTA’s implementation. “Nigerian companies like Dangote Cement, Nigerian Breweries, Flour Mills of Nigeria Plc, and Guinness Nigeria have already benefited from the increased market access and reduced tariffs,” she stated, emphasizing the trade pact’s role in boosting Nigeria’s trade position.
Major Sectors
Analysis of the commodities involved in this trade spike reveals that petroleum oils and oils obtained from bituminous minerals dominated, valued at N1.991 trillion or 84.53% of total exports to Africa. Floating or submersible drilling or production platforms (N81.69 billion or 3.47%), electrical energy (N63.28 billion or 2.69%), vessels and other floating structures for breaking up (N37.02 billion or 1.57%) were the main commodities exported to African countries in the quarter under review.
As Nigeria continues to navigate the complexities of regional trade, the increased activity under AfCFTA presents both opportunities and challenges. The economic landscape is poised for further changes as companies adapt to new market realities and governmental policies evolve to support sustainable growth in intra-African trade.
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