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Nigeria has secured the position of the fourth-largest contributor to intra-Africa trade in 2023, trailing behind South Africa, Cote d’Ivoire, and Egypt, according to a report by the Africa Export-Import Bank.
The Africa Trade Report 2024, titled “Climate Implications of the AfCFTA Implementation,” revealed that Nigeria’s intra-Africa trade decreased by 2.1% in 2023, falling to $8 billion from $8.2 billion in the previous year. This decline led to a marginal reduction in Nigeria’s share of total intra-African trade, which dropped from 4.4% in 2022 to about 4.2% in 2023. Despite this, Nigeria remained the fourth-largest intra-African trading nation. Approximately 5.1% of Nigeria’s exports were directed to African countries, with Cote d’Ivoire, South Africa, and Senegal being the top three destinations for Nigerian exports within the continent. Nigeria’s imports from the rest of Africa remained relatively low, accounting for less than 2.9% of its total imports.
The National Bureau of Statistics’ foreign trade report for the last quarter of 2023 highlighted Nigeria’s top five trading partners for imports. Singapore topped the list with goods valued at N5.09 trillion (36.09%), followed by China with N2.06 trillion (14.61%), Belgium with N1.14 trillion (8.09%), India with N908.59 billion (6.44%), and the United States with N512.99 billion (3.64%). The combined value of imports from these five countries amounted to N9.72 trillion.
In 2023, the value of intra-African trade increased by 3.2%, reaching $192.2 billion, although this was a slowdown compared to the 10.9% growth rate recorded in the previous year. The Afreximbank report estimated the export potential for intra-African trade to have surpassed $69.4 billion in 2023. This projection suggests that the current level of intra-African trade could potentially rise to $261.6 billion, constituting 36% of total intra-African trade, assuming other conditions remain constant.
The report identified key products with significant export potential within Africa, including machinery, electricity, motor vehicles and parts, food products, minerals, beauty products, chemicals, plastic and rubber, ferrous metals, pearls and precious stones, and fertilizers.
The implementation of the African Continental Free Trade Agreement (AfCFTA), which came into force on January 1, 2021, played a crucial role in boosting intra-African trade in 2023. The AfCFTA is a trade agreement based on legally enforceable and reciprocal tariff schedules and concessions, with agreed rules of origin and customs documentation within Africa.
In 2023, three additional countries ratified the agreement, bringing the total to 47. The seven countries yet to ratify it are Benin, Liberia, Libya, Madagascar, Somalia, South Sudan, and Sudan. Eritrea remains the only African Union member state that has not signed the agreement. Significant milestones were achieved in 2023 regarding the Protocol on Trade in Goods, with 48 tariff concessions submitted by countries, representing 87% of African Union membership.
The report also warned that Nigeria faces the risk of losing $30 billion from its gross domestic product due to divestment from fossil fuels. With growing concerns about climate change and the need to reduce fossil fuel usage, Afreximbank expressed worry about the impact, as many African countries depend on fossil fuel sources for basic energy needs and export revenue.
“For major oil-exporting countries, including Algeria, Angola, Equatorial Guinea, Gabon, Nigeria, and the Congo Republic, fossil fuels represent the main source of export earnings and fiscal revenues, job creation, power generation, and powering fossil-intensive industries. For instance, divesting from fossil fuels could reduce GDP by as much as $30 billion in Nigeria, $22 billion in Algeria, $19.3 billion in Angola, and $190 billion for the continent as a whole,” the report stated.
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