AfCFTA: Why Nigeria is not Competing Effectively in Agro Exports


Segun Awolowo

Chinedu Eze

Before COVID-19 and the closure of Nigerian borders with its West African neighbours, the Chief Executive Officer of Nigeria Exports Promotion Council (NEPC), Segun Awolowo, said Nigeria’s informal sector recorded at least N41 billion annually across the West African states.

But since the COVID-19 lockdown and thereafter, cargo freighting has taken a new trajectory and while there is high demand for perishable goods from Nigeria, bureaucratic hindrances, lack of sincerity and corruption imbedded in the agencies in charge of approving cargo for export, have ensured that Nigeria lagged behind other nations, especially in Africa.

This explains why Nigeria may not take advantage of the African Free Trade Area (AfCFTA), which eliminates tariffs on intra-Africa trade, making it easier for businesses to trade within Africa and benefit from their own growing market; introduce regulatory measures such as sanitary standards and eliminating non-tariff barriers to trade.

The Managing Director and CEO of ABX World Limited, Captain John Okakpu who noted that AfCFTA has the potential to lift millions of people out of poverty and end food insecurity on the continent, said Nigeria has not been positioned as the ‘real’ stakeholder for agro-export under this agreement.

He said that Nigeria’s participation and gain from AfCFTA in the agricultural value chain, depends on the effectiveness and implementation of government policies, especially in the agricultural sector.

He said that AfCFTA would form a $3.4 trillion economic bloc, which Nigeria cannot afford to be out of.
According to him, available reports show that trade between African nations in agricultural products as a percentage of Africa’s total agricultural trade remains below 20 per cent long, one of the lowest in any region.

Total trade between African nations was only two per cent in the period 2015–2017, compared with 67 per cent in trade between European countries, 61 per cent in Asian countries, and 47 per cent in the Americas, according to United Nations Conference on Trade and Development (UNCTAD).

“Now, AfCFTA intends to change the narrative. It has created the world’s largest free trade area, representing the 1.2 billion consumer market, and mandates states to remove tariffs and non-tariffs in order to boost shipments and services between nations, and boost economic growth in doing so,” Okakpu said.

He also observed: “If you look at the trend, Africa exports agricultural products such as tomatoes, onions, vegetables, cocoa, coffee, cotton, yam tobacco and spices to the nations of the world to earn significant foreign exchange. But the continent imports important foods such as cereals, vegetable oils, dairy products and meat in large quantities. Now, our neighbouring countries have positioned themselves to benefit from AfCFTA by building robust logistics and cost-effective export systems.

Okakpu chaired a 28-member Nigeria Agro Set-Up Committee inaugurated by the Federal Ministry of Industry, Trade and Investment (FMITI), with a mandate to reinvigorate broad national agricultural activities across the country.

With that wealth of experience, he noted that capacity building for farmers, regulators and top government officials is another major factor that must be considered for the country to get her acts together.
He said that the most basic of agro export requirements is the knowledge of Good Agricultural Practices (GAP), which is completely missing in Nigeria.

“In addition to other benefits, it teaches and equips farmers on standard Farming Bookkeeping which helps farmers know, track and compare total costs of farm inputs and inflows from sales and in so doing help to maximize their profitability.
“As it is now we will continue exporting our products to the world market through another country and definitely will get worse under AfCFTA. For every N1 we are going to make, those countries our products are transiting will be making N10. There’s no shortcut here or lobbying, it’s grassroots, that grassroots are the farmers with Certifications/Traceability of their farms and products.

“That notwithstanding, knowledge of GAP enables farmers to increase their yields per hectare by employing latest, world class and more efficient farming techniques. Similarly, farmers who have Global GAP certifications and training are automatically linked to off-takers who buy off their agricultural farm produce right from the farm gate at international market rates thus saving most farmers from losses derived from low sales and prices that ultimately lead to loan defaults,” he said.
Okakpu remarked that the regulators and other government officials also need to be informed on why “cost should be reduced; on why farmers deserve cost-effective interest loans; why the logistics value chain must be rejigged if we are going to benefit from AfCFTA.”

It has become evident that Nigerian perishables are being rejected and as reports indicate, the continued rejection of Nigeria’s food exports in foreign countries showed that Nigerian government workers are simply not doing their work.

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Publish date : 2021-11-25 21:18:30

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