The Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has disclosed that African Continental Free Trade Agreement (AFCFTA) is expected to give Nigerian firms preferential access to markets in Africa worth $504.17billion in goods and $162billion in services.
In a remark at the Zenith Bank’s 2021 export seminar on Tuesday, CBN Governor said, “We believe that the 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, given our growing advantage in these areas relative to our counterparts in other parts of Africa.
“Full- implementation of the AFCFTA, is expected to give Nigerian firms preferential access to markets in Africa worth $504.17billion in goods & $162billon 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 said that Nigeria with a very young energetic, technological savvy population has been leveraging on technological applications to improve service delivery in the areas of finance, logistics and agriculture to consumers.
He stated that AFCFTA would provide an opportunity for these young talented Nigerians to expand their services across the African region, stressing that the trade agreement aims to support the creation of jobs in Nigeria and improve foreign exchange inflows for the country.
He maintained that Nigerian banks are already playing a significant role in expanding across the African continent.
“I would like to encourage them to also leverage their presence in other parts of Africa, to support Nigerian businesses seeking to expand into new markets in Africa, by providing trade facilities to those with strong potentials for growth,” the CBN governor said.
He noted that the apex bank has established a N500 billion non-oil export stimulation facility as part of intervention programmes in the agriculture and manufacturing sectors to enable businesses to expand their scale of production.
The N500 billion, he explained, is domiciled with the Nigerian Export-Import Bank (NEXIM).
According to him, the intervention was in addition to helping investors to meet growing domestic demand for goods while also providing goods for the export market.
He expressed that improving business environment in Nigeria is also vital if the government, stakeholders are to harness the gains from the AFCFTA.
Speaking on the CBN’s Trade Monitoring System portal (TRMS), he said, the portal aims 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 explained that, “Today, businesses can complete their NXP applications on the TRMS portal in 30 minutes relative to two years ago, where it could take as much as two weeks to complete the process.”
He said the apex bank is also working with stakeholders in repositioning the Nigerian Commodity Exchange, which would help to support greater trade for operators in these vital sectors earlier mentioned.
In his words, “Once the exchange becomes fully operational in the 2nd half of the year, international buyers of raw and processed agricultural commodities will be able to enter into forward contracts with domestic suppliers on the exchange, and they can be assured of not only the quality of the goods sold through the exchange, but on the expected date of delivery.
“We believe these forward contracts will help to support improved productivity for farmers and agro-processors, it will also help to improve access to credit for these entities using the forward contracts as collateral.
“Supporting greater trade within Africa would also require the presence of a viable payment settlement system. In this regard, the CBN is working with key stakeholders in the African continent,particularly the AfreximBank to improve the underlying payment infrastructure to support greater intra-regional trade, through the Pan African Payments and Settlement System(PAPSS).
“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.
“Although Nigeria stands to gain from expanded trade, I believe it is also important that we pay attention to the cost that expanded trade through the AFCFTA could have on local businesses and communities.
“Smuggling of goods produced in non-African countries into Nigeria, and abuse of rules of origin have often resulted in significant job losses and displacements of workers in key sectors of our economy such as agriculture and manufacturing. It is vital that we work with the governing body of the AFCFTA in addressing these concerns, as it has profound implications on unemployment and security in Nigeria.
“We would also like to urge existing exporters, that they endeavor 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.
“In closing, let me once again thank the organizers of this event for their focus on improving Nigeria’s non-oil exports and expanding intra-regional trade. The initiatives being put in place by the CBN would help to ensure that Nigerian businesses are able to take advantage of the growing opportunities in the African Market.
“Ensuring that procedures on rules of origin are strictly adhered to by other African countries would also help to reduce the negative effects that come with the implementation of the AFCFTA. Nevertheless it is vital that we all work together to support increased growth of our non-oil exports as it would help to enable greater economic growth and improve our foreign exchange earnings.
“The CBN remains committed to working with all stakeholders towards achieving these objectives.”