Nigeria and the impact of AfCFTA: Two years after

AfCFTA in Nigeria

Nigeria and the impact of AfCFTA: Two years after

Article by: Bosede Giwa-Osagie and Jerry Obanyero

The African Continental Free Trade Area [“AfCFTA”] was founded in 2018, with trade commencing on January 1, 2021. As the second-largest free-trade area after the World Trade Organization, with 44 signatories among the 55 member states of the African Union, the fundamental objectives of the AfCFTA are to remove trade barriers and restrictions among the member countries [“state parties”][1] and enhance free trade, movement of business professionals, and investments among state parties. More so, pursuant to the agreement, the AfCFTA is meant to boost socio-economic development, lessen the rate of poverty, and ensure the economic competitiveness of Africa in the world. The United Nations Economic Commission for Africa [UNECA][2] believed that the implementation of the agreement could boost intra-African trade by 52% by 2022 and bridge the gap with intraregional trade quotas now defining Asia (51%), North America (54%), and Europe (67%).

On December 5, 2020, Nigeria became the 34th party to the AfCFTA agreement after formally ratifying it. Being the largest economy in Africa, with an estimated population of 211.4 million people in 2022, according to Trading Economics, Nigeria’s formal commitment to the AfCFTA has elicited interest among stakeholders and raised hope in Africa, galvanising the prospects the AfCFTA provides in an economy of $2.5 trillion and in setting a new agenda for African development[3].

There is no doubt that the AfCFTA provides a huge opportunity for Nigeria’s economic prosperity, especially in job creation, poverty reduction, attracting investments, and boosting its trade relationships with other countries. However, two years after it came into full force, Nigeria is yet to maximise the full benefits of the AfCFTA. This setback is not unrelated to the coronavirus pandemic, disagreements over trade protocols, and a lack of political will.

Like many countries, Nigeria was severely affected by the coronavirus pandemic[4]. The lockdown, which was enforced for most of 2020 as a measure to curtail the spread of the deadly virus, affected businesses, especially the manufacturing sector. There were difficulties accessing raw materials and new and existing markets for finished goods, which slowed production and compelled the
West African countries seek other alternatives, with huge losses for the manufacturers and investors. There was also an apprehension that the country had no sufficient medical infrastructure required to arrest the situation at its borders, including a lack of test kits, ventilators, protective gloves and gowns, facemasks, and equipped facilities to house suspected or confirmed cases. Although Nigeria ratified the AfCFTA Agreement in December 2020, it closed its land borders, particularly Idiroko in Ogun State, Jibiya in Katsina State, Kambai in Kebbi State and Ikom in Akwa Ibom State throughout 2021 and only reopened same on April 22, 2022, following the directive of President Mohammadu Buhari, who believes that under AfCFTA, Africa could double its intra-African trade by 2030, reduce dependence on imports and thereby increase job creation within the continent. However, the closure within that period affected adversely the mobility of Nigeria’s import-export transactions with other African countries and could not address the problems that hitherto engineered the closure, which among other things, were to prevent smuggling, especially rice into the country.

Pursuant to the AfCFTA   Agreement, there should be free movement of persons, the right of residence and the right of establishment to allow African nationals to move and work within Africa without any restriction. Unfortunately, no formal agreement is in place for this to materialize, thus hampering the movement of people and goods among party states, particularly Nigerians.

Furthermore, it is observed that the Federal Government of Nigeria has not, as it were, exhibited sufficient political will towards the full implementation of the AfCFTA. For example, despite the AfCFTA agreement, Nigeria’s trading with other African countries shrunk. Nigeria’s trade declined by 33.8% in trade balance with the continent from Naira 2.8 trillion in 2019 to Naira 1.86 trillion in 2021.
The decline is also reflected in the percentage of Nigeria’s trade with Africa compared to the rest of the world which fell from 13.91% in 2019 to 7.45% in 2021. Private sector operators attributed[5] the decline in Nigeria’s trade balance with the rest of Africa to supply chain disruptions, and scarcity of forex required for the importation of critical inputs for production which ultimately led to the high cost of production and thereby made the country’s exports uncompetitive.

Furthermore, Nigeria trades with Asia and Europe more than any other country. According to data from the World’s Top Exporters[6], Nigeria exported US$47.6 billion in goods worldwide in 2021.
The amount reflects a 16% increase since 2017 and a 42.6% progression from 2020 to 2021. Some of Nigeria’s biggest trading partners are India, Spain, and France, which bought over a third (34.5%) of total Nigerian exported products in 2021, measured in dollars. In all, 39.8% of Nigeria’s exports by value were delivered to European countries, while 34% were sold to importers in Asia. Other big trading partners include the Netherlands with $2.9 billion [6%] worth of imports, Canada with $2.2 billion [4.5%], the United States with $2 billion [4.4%], Italy with $1.91 billion [4%], Indonesia $1.87 billion [3.9%] and China $1.86 billion [3.9%]. Unfortunately, trading with African countries remains low, apart from Cote D’Ivoire where imports stood at $1.3 billion [2.8%].[7] Negotiations on the Rules of Origin [RoO], fundamental to improving local production, are about 87.65% complete, with the remaining 10% working on textiles and 2% on automobiles. Also, the United Nations Conference on Trade and Development [UNCTAD] stressed that the total removal of tariffs pursuant to the establishment of AfCFTA could boost the gross domestic product [GDP] of every African country by 3%, and in addition, a well-structured RoO could greatly impact intra-African trade[8].

Notwithstanding the above-highlighted challenges, Nigeria is making inroads in ensuring that the AfCFTA becomes operational in the country. In a Presidential Policy Dialogue organised by the Lagos State Chamber of Commerce and Industry [LCCI][9], the Vice President, Prof. Yemi Osinbajo, confirmed that some level of progress had been made. The National Action Committee on AfCFTA has been set up to coordinate the implementation. The Committee has couched a national implementation strategy with particular interventions to propel the mission and strategic objectives of AfCFTA.

In conclusion, it is believed that with the efforts made so far by the Federal Government and with plans underway to domesticate the AfCFTA, Nigeria will soon enjoy the full benefits of the AfCFTA. It is also believed that the newly constructed Lekki Deep Sea Port in Lagos, will facilitate transhipment and cargo handling in transit for other destinations, with the Chinese Ambassador[10] to Nigeria calling the project a “game changer.” This it is hoped, will bring about good results for Nigeria.






[1] World Bank Group. (2023, February 7). Free Trade Deal Boosts Africa’s Economic Development. World Bank.

[2] UNECA: Intra-regional trade can reduce conflicts in Africa. (2023, January 11). Africa Renewal.

[3] Nigeria becomes 34th country to ratify AfCFTA agreement | United Nations Economic Commission for Africa. (n.d.).

[4] COVID-19 and Africa: Socio-economic implications and policy responses. (2020, May 7). OECD. Retrieved February 16, 2023, from

[5] One year after, AfCFTA is still in limbo. (2022, January 13). The Guardian. Retrieved February 3, 2023, from

[6] Workman, D. (n.d.). Nigeria’s Top Trading Partners.

[7] id.

[8] AfCFTA support programme to eliminate non-tariff barriers, increase regulatory transparency and promote industrial diversification. (2022, July 28). UNCTAD.

[9] Ekanem, I. (2020, August 5). Osibanjo, Others for LCCI’s Presidential Policy Dialogue – THISDAYLIVE.

[10] Sanni, S. (2023, January 24). Nigeria opens “game changer” billion-dollar deep seaport. Reuters.


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