Nigeria Economic Update (Issue 45)

The Federal Executive Council has ratified Nigeria’s membership of the African Continental Free Trade Area (AfCFTA) agreement ahead of the December 5, 2020 deadline.¹ The AfCFTA, which comes into effect on the 1st of January 2021, aims to create a single market for goods and services in Africa that can potentially increase consumer and business spending to over $6.7 trillion by 2030.² Nigeria with its substantial market, large labour force and the economy is likely to be a major beneficiary of the agreement. However, the Nigerian government in some instances has taken an anti-trade policy stance such as the closure of land borders with Benin, Niger, and Cameroon in order to curb the smuggling of food products, and the new import prohibition on Maize. As such, the government will have to improve its preparedness towards implementing the AfCFTA by identifying and achieving quick wins to enhance trade across borders. Another important policy objective is increasing the awareness of the AfCFTA among local businesses in order that they leverage on the increased market access.