Nigeria is the economic powerhouse of Africa. As the largest economy of the continent at US$ 440,777 (in 2021, using the World Bank’s atlas method for calculations) and the most populous country at 211 million (in 2021), it has a significant potential and critical role to play in economic revival of the entire continent. Undoubtedly, Nigeria can provide an added momentum to the process, with its growing middle class, expanding labour force and market opportunities.

In the last 20 years, Nigeria’s economic growth has mostly been positive, peaking at an impressive 15.3% in 2002, with periods of mild recession in 2016 (-1.6%) and 2020 (-1.8%). The country has witnessed a steady decrease in poverty since 1995, however, the poverty ratio remains high at 39.1% (2018) of the population living below the poverty line of $1.90 a day. Performance varies markedly between the northern and southern regions. While the poverty level stands at around 30% in the South, it hovers above 60% in the North, with states, such as Zamfara and Sokoto, with poverty rates above 80% (in 2020). Human capital underdevelopment is also prevalent in these high poverty regions, signalling a connection between poor education, poor health access and poverty. This is reflected in the disparities in Human Development Index, with Lagos at 0.686 (2019) – a medium human development and comparable to that of Morocco, and Yobe, Sokoto and Kebbi states at 0.368, 0.340 and 0.339, respectively – a low human development and comparable to that of Somalia.

Pressing Economic Challenges
When we look at the overall performance of the Nigerian economy, it becomes apparent that there are structural and institutional challenges that need to be addressed. Nigeria’s economy is oil dependent with 90% of exports is attributable to fossil fuels. Although brings substantial revenue to the State, this makes the country excessively vulnerable towards external economic shocks in the form of the fluctuation of the international price of oil and, secondly, inhibits the country’s ability to diversify its economy, create new employment opportunities and advance structural economic transformation to reduce poverty. At the same time, the services account for 46% of GDP (in 2020),
though largely dominated by the informal sector, which limits state revenue and negatively affects proliferation of decent jobs. Agriculture continues to be important, contributing about 24% of GDP, but it is concentrated around subsistence farming. Poor productivity in the service and agricultural sectors inhibits strong and inclusive growth as well as structural economic transformation. The oil sector which accounted for 8.8% of the GDP between 2010-2020, contributed about 60% of the government revenue in the same period. Recent revenue shortfalls have increased deficit, raising public debt from 27.6% of GDP in 2019 to 35% in 2021. With the COVID-19 pandemic, the revenue
problem is aggravated, and fiscal sustainability is emerging as a major concern to the long-term growth.

A closer look at some aspects of Nigeria’s economic development and related indicators reveals pressing challenges. First, the largest economy in the continent ranks 18th in Africa in terms of per capita income. This is not only the result of sheer population size but an indication of the prosperity (or lack thereof) of the population and contributions of citizens to the national wealth. By enhancing productivity of labour, through training and technological catch up, the GDP per capita of Nigeria could be improved. Second, being extractive sector-driven economy, Nigeria has inherent rigidities in terms of absorbing labour in the national economy. This is because, extractive sectors by their nature are capital intensive and generate relatively small employment opportunities. Third, as the Nigerian economy is dependent on natural capital and export of raw or unprocessed commodities, it is subject to the vagaries of external shocks- be they economic, political or health related. Due to the COVID-19 pandemic, Nigeria’s economy is expected to face the most severe recession in decades: GDP dropped by nearly 4% in 2020 and the recovery for 2021 and 2022 has remained sluggish, particularly when compared with the growth rate of the population. As a result, the gains in poverty reduction achieved after several decades have started to reverse. Some estimate puts that extreme poverty is expected to increase with the number of poor likely to grow by 15-20 million by the end 2022. Finally, as with most economies of Africa, these are the results of weak economy-wide productive capacities and lack of structural economic transformation.

PCI of Nigeria or where does Nigeria stand in its productive capacity development?

Using UNCTAD’s innovative productive Capacities Index (PCI), it is possible to measure Nigeria’s performance and capacity to grow and develop. With its eight components – Natural capital, Human capital, Energy, Private sector, Institutions, Structural change, ICT and Transport – the PCI draws a broad multidimensional picture of countries’ domestic capacities. Nigeria’s PCI estimates revealed serious gaps and limitations which need to be urgently addressed. On the overall composite index Nigeria’s score was at 21.65 in 2018 (prior to the COVID-19 pandemic), and it positions the country at 185th place in the world and 44th in Africa – which is not reflective of its economic might and national aspirations. With the exception of Natural Capital and Private Sector components, Nigeria fares low in other key components, such as Human Capital, Energy, Transport, ICT, Institutions, which are critically important for accelerating inclusive and sustainable growth as well as kick-starting the process of structural economic transformation.

What is the way forward?
The development challenges Nigeria faces call for a new policy approach and the formulation and implementation of new generation development policies centred on the fostering of productive capacities. This should signal a shift away from short-term, sector and project specific interventions. The analysis of Nigeria’s PCI clearly indicates an urgent need to refocus policy interventions and national development strategies towards fostering domestic productive capacities, which will enable structural transformation and economic diversification. Furthermore, they will ensure that the country participates in value added segments of the global economy, rather than serves as a commodity supplier.

Building domestic economy-wide productive capacities requires special attention to be paid to building institutions which will govern the rules of economic conduct. This is needed to make it attractive for business to invest, develop and operate. For this, improvements in the quality of human capital are also necessary, and only possible through the implementation of an adequate educational policy able to cater for the needs of the market and one which anticipates changes and shifts in the assortment of output of the national economy. Lastly, a focus on infrastructure development - that is transport, energy, and ICT -is imperative, as it facilitates economic interactions. The challenges are significant, the opportunities available, and the success within reach.

About the authors

_{Mr. Paul Akiwumi, Director, Division for Africa, LDCs and Special Programmes, UNCTAD}

_{Dr. Chukwuka Onyekwena, Executive Director, Centre for the Study of the Economies of Africa, Abuja, Nigeria}

This article was first published on Businessday

Migration from Africa commonly evokes the image of a continent fleeing its own home. Many Africans leave to go to other places within and outside the continent in what can seem like a massive exodus. While Africa’s migration remains overwhelmingly intra-continental, evidence shows that there has been an acceleration in emigration to other continental regions. Since 1990, the number of migrants of African descent living outside of the region has more than doubled, with Europe as the most pronounced destination. In 2015, over 16 million Africans had migrated to another African country other than their countries of origin, and an additional 16 million migrated to a different region.

Economic or trade unions all have something in common; to form a sizable market that can position its member states in a vantage standpoint needed to influence trade negotiations or expand the economic prosperity of its people through joint policy.  Economic unions or blocs are not necessarily formed to increase population size, promote consumerism or extend geographical space. They aim at enhancing market efficiency, promoting healthy competition, attracting foreign direct investment, expanding trade, promoting the economic interest of member states.

Instituted through the Lagos Treaty on the 28^th of May 1975, the Economic Community of West African States (ECOWAS) now has 15 members, occupies a geographical area of about 5,114,162 km² and market size of over 350 million people. With a combined GDP of approximately US$716.7 billion, ECOWAS possesses the required tools to improve West Africa economy. Forty-three (43) years down the line, some successes have been recorded, but yet the pace of influence and development have been slow. But we strongly believe that ECOWAS could be a catalytic entity for the emancipation of West Africa countries in the committee of Nations.

Custom, Manufacturing Capacity and Trade

Although within a trade bloc, the joint promotion of the regional welfare is emphasized, yet the member states with strong producing capacity tend to recoup most benefit.  While this is so, it could promote intense competition among member states thereby ensuring surplus output, varieties of good and services, and reduced prices for consumers. The ultimate result of these chains of actions will be expanded exports and foreign exchange inflow for member states. In 2016, the combined export value of ECOWAS was about US$101.4 billion, far below the export value of individual countries such as Turkey ($157.3 billion), Malaysia ($188.2billion) and some hosts.

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ECOWAS, 2016

While, it would have been expected that the member states trade more with each other, but the intra-trade trend shows that ECOWAS members trade less with each other, recording a yearly average of US$ 12.9 billion worth of goods and services from 2011 to 2016. There still exist some levels of barriers in trading with each other, an indication that the Economic/Trade Union did not result to Customs Union.  In addition to these, ECOWAS export to the outside world has been unstable and tumbling downward at a geometric pace, losing an average of US $10.5 billion every year and about the US $ 55.4 billion every two years. Examining the bloc’ s trade partners shows that about 83.7 percent of ECOWAS exports are to Europe and the Americas, about 16 percent en route to Asia and Oceania, with only 0.3% to the Middle East. The export composition still reflects the dominance of primary goods with little or no value addition.  All these are signals that the manufacturing capacity of the ECOWAS states are still lagging behind and the bloc needs a workable export strategy to create the needed prosperity and jobs among its member.

The Prosperity Joystick

ECOWAS states are not yet fully integrated economically. The bloc needs to focus more on economic integration through the following:

• Capital and Talent mobility: Despite the attainment of the ECOWAS passport, the inability to implement a vibrant custom and immigration union has been hampering free mobility among member states. The borders of member states are heavily armed with tank and armoury such that people and goods spending hours for documentation and It should be noted that without joint policing across the border, the free flow may not be fully achieved. This can be improved upon.
• Monetary integration: The existence of money brings in liquidity and easy flow of trade. With the US dollar as a third party currency, the full actualization of stress-free trade among members may not be completely achieved. But, the introduction of ECOWAS currency will necessitate joint monetary coordination and harmonization of macroeconomic policy among members.
• Friendly Investment Policy and Joint Trade Strategy: ECOWAS could facilitate FDI into West Africa and can support member states with research-based trade strategy, for instance, on the need to expand trade to the Middle-East region. This should also be considered for quick implementation" alt="" width="700" height="416" />

Morocco could be the Game Changer

The willingness of Morroco to join the union despite its geographical located in the North shows the presence of a pull “incentive-like” factor in ECOWAS not fully explored by the old members; the large market, massive labour or trade advantage. The country formally belongs to the Arab Maghreb Union (UAM) but has disagreements with the bloc, especially Algeria. In the past decade, Morocco trade with ECOWAS member states had grown up to US$ 1 billion in 2016. Nigeria, Côte d’Ivoire, Senegal, and Mauritania happen to be the biggest importers of Morocco goods such as foodstuffs, machinery and chemical goods. With a strong domestic manufacturing base, Morocco stands the chance of replacing some part of ECOWAS importations from Europe and Americas, while addressing its wider current account and trade deficit, in addition to improving its unstable economic growth. As the Manufacturers Association of Nigeria (MAN) continues to oppose the admission of Morocco into ECOWAS, such moves will not add to Nigeria’s productive capacity. Even as Morocco’s admittance will promote competitiveness, Nigeria will, therefore, need to reform its productive base to able to enjoy the benefit of the membership of any trade bloc it belongs to now or in the future.

In conclusion, as the economic pie grows big, everyone stands will have a bigger share. As the productive capacity of member states increases and trade activities with each other expands, more business opportunities will spring up, jobs and income in the region will increase. With the growing population in West Africa, this is partly what the ECOWAS needs to tame the Africa-Europe migration/refugee challenges and as well as achieve the sustainable development goals (SDGs).

This article seeks to highlight the costs of plastic pollution as well as to provide targeted and actionable recommendations for different stakeholders, especially in the African context.

Plastic pollution has become one of the most pressing environmental concerns globally, having become the fulcrate of recent global policy debates bordering on marine pollution and environmental sustainability. At the United Nations Environment Assembly in Nairobi in 2017[Download File">1], over 200 nations signed a resolution which seeks to eliminate plastic pollution in the seas, reaffirming the UN Sustainable Development Goal 14 “to conserve and sustainably use the oceans, seas and marine resources for sustainable development”. Evidence indicate that plastic pollution poses serious threat to marine species and has adverse consequences for public health and environmental sustainability. Every year, 500 billion plastic bags are used around the world, 13 million tonnes of plastic leak into the ocean, 100, 000 marine animals are killed by plastics, and 83 percent of tap water are found to contain plastic particles --according to statistics by the African Development Bank (AfDB) Download File">[2].

As plastic remains in the environment for centuries, the trillions of plastic pieces accumulating in water bodies form part of a global pollution issue that affects all coastal countries especially in Africa.Download File">[3]. Eighty percent of the continent's Gross Domestic Product is concentrated in just 11 African countries that have prominent coastlines (Nigeria, South Africa, Algeria, Angola, Egypt Morocco, Sudan, Tunisia, Kenya, Ghana and Libya) Download File">[4]. With the present and projected unprecedented population growth and urbanization in Africa, especially in the coastal zones, Africa’s growing middle class is increasingly creating larger consumer markets for plastic goods with supermarkets replacing informal shops and markets. An additional 1.3 billion people [equivalent to 3.5 million per month] is projected to be added in Africa by 2050, and urbanization are expected in the Download File">coastal zone with an estimated 49 million more people in low elevation coastal flood plains by 2060  Download File">[5].

While plastics are extremely useful and serve a variety of purposes, adequate plastic waste collection and recycling systems are lacking in many African countries. As a consequence, discarded plastics often ends up in the environment, where it can cause health and other problems for marine and land animals including humans, as well as climate change. Both micro-plastics pieces (between 2 to 5 millimeters) and macro-plastics (above 20 millimeters) often find their way into the soil and water bodies where they endangers animals, and can wind up in the food chain with health consequences Download PDF">[6]. When macro-plastics entangle marine animals, mobility is impeded leading to starvation and increasing susceptibility to predators. Furthermore, when smaller marine creatures such as plankton are poisoned due to plastic ingestion, it also poses health problems for the larger animals that depend on them for food, including humans. As such, those who enjoy seafood are especially exposed to the harmful effects of plastic pollution: A study by scientists from the University of Ghent, Belgium find that shellfish lovers are eating up to 11, 000 plastic fragments in their seafood each year Download File">[7].

Plastic pollution also has other adverse implications for land and its inhabitants. A study carried out in five continents in 2017 by the University Of Minnesota School Of Public Health revealed that 83 percent of tap water samples taken around the world contained plastic pollutants Download File">[8]. This presents health challenges even for vegan and those who do not eat seafood. Furthermore, the breaking down of plastics both in its production and decomposition release methane --a greenhouse gas that contributes to global warming. In addition, the incineration of plastic in the open air, leads to air pollution that can contribute to respiratory problems when inhaled by animals and humans.

Plastic pollution also poses significant economic costs: not only is the cost of cleaning up plastic debris from seas expensive Download File">[9], excessive pollution can negatively impact tourism and thus the macro-economy. Plastic pollution spread across countries, creating a regional problem with high costs for economically important sectors such as tourism and fishing.

Way Forward

Although momentum on beating plastic pollution has grown in recent years, international efforts to limit plastic pollution have so far witnessed limited success in addressing the problem. Although the majority of plastic wastes do not originate from the ocean, most the international efforts have concentrated on the oceans. To fill this gap and to address the regional and transnational problem of plastic pollution, negotiations on a regional plastics treaty is necessary. A regional plastic treaty that tackles plastic pollution where it originates; fosters innovation for more sustainable plastics; and supports countries within the region in enhancing their domestic waste collection and recycling systems is vital. Given that collaborative efforts are necessary to achieve significant and desired impact, the regional community such as African Union, Economic Community of West African States can also create directives aimed at eradicating plastic pollution in the continent.

Nevertheless, individuals and non-governmental organizations including civil society, research, private organizations as well as religious institutions and traditional groups also have key roles to play. For individuals, indiscriminate disposal of plastics on the streets, gutters and public places should be deliberately avoided. National and sub-national governments of African countries would need to provide incentives and penalty to ensure behavioral change and discourage indiscriminate disposal of plastics.

For both individuals and organizations, collecting and supplying plastic bottles for recycling is needful to encourage re-use and help reduce the scale of plastic production. Particularly, research organizations (think tanks and universities) should embark on policy-oriented and behavioral research on plastic use reduction and waste mitigation in order to generate local evidence that can inform government policies. Civil society organization can leverage the research for necessary advocacy toward policy-making and implementation. Again, national and sub-national governments need to create the incentive structure to stimulate such behavioral change.

For governments at all levels, there is need to implement more environmental-friendly policies and initiatives, especially relating to plastic pollution. For instance, at state level, the government of Lagos state, Nigeria has set a pace on environmental conservation through its Lagos Waste Management Authority (LAWMA). In addition to education residents on waste management, LAWMA recovers reusable recyclable materials from landfills sites which are then manually sorted and delivered to companies for incorporation in their production line Download File">[10]. Kenya also sets a noteworthy example on the eradication of plastic pollution through its ban on plastic bags. The ban came into effect in August 2017 and charges people who indiscriminately dispose plastics a fine of $40, 000 fine or risk imprisonment of up to 4 years Download PDF">[11]. Going forward, national governments should work with their state and local governments to localize such noteworthy waste management initiatives.

Plastic pollution is a global threat to environmental sustainability, public health and economic development, concerted efforts between individuals, think-tanks and civil society organization, national and regional governments as well as the international community is needed for effective management and mitigation of the effects of plastic pollution.

The Presidents of forty-four (44) African countries just recently signed the agreement for the creation of African Continental Free Trade Area (AfCFTA). The success of AfCFTA will make it the biggest trade agreement since the formation of the World Trade Organization in 1995. By reducing barriers to trade, such as removing import duties and non-tariff barriers, the AfCFTA is expected to boost intra-African trade given its potential of bringing over 1.2bn people together into the same market. According to the African Development Bank (AfDB), the AfCFTA “will stimulate intra-African trade by up to $35 billion per year, creating a 52 per cent increase in trade by 2022;Download File"> and a vital $10 billion decrease in imports from outside Africa.”

However, despite the expected benefits from AfCFTA, nine other African countries, including Nigeria and South Africa have delayed assent to the treaty. In Nigeria, various concerns have been raised which includes the exposure of the already struggling local manufacturing sector to undue competition. According to the Manufacturers Association of Nigeria (MAN), the agreement will lead to job losses and increase unemployment. In addition, due to the poor export capacity in the non-oil sector and low industry capacity, stakeholders suggest that there is a need to review trade agreements and policies at this time at because most of the developed countries grew by closing down their borders for a while. A brief discussion of some major factors that affect the scale of free trade effects is provided below.

Size of the Market: Enlarging a trade bloc increases the size of the market, to which all countries have easy access; this also implies that the importance of the size of the domestic market of individual decreases, which favors the small countries. Let’s take the three key players in this debate; consumers, producers, and exporters. Consumers in smaller countries would always gain from mutual trade liberalization because they would not only have access to cheaper goods and products of high quality, but also to more variety. Exporters in the smaller countries would also benefit from the trade liberalization, as they gain access to larger markets and more competitive inputs. This means that with cheap labor in smaller countries, lowering import restrictions allows farmers, builders, and factory owners to access production inputs and resources, therefore increasing their production capacity.  Producers in the smaller country present a mixed picture, with the more productive ones gaining and the less efficient losing. When foreign competition increases, it exerts pressure on producers to become more efficient and increase productivity. Firms unable to improve productivity could be pushed out of the market. However, this can be counterbalanced by other firms that benefit through availability of better and cheaper inputs, which helps them Download File">become more competitive both at home and abroad.

Supply-Side Constraints: Supply-side constraints include not only government policies but also the country’s physical and institutional infrastructure, its human resources and all the other elements determining the short-term flexibility of an economy. The extent to which countries can benefit from improved market access depends on their ability to supply goods and services to export markets and to compete effectively.  The weak capacity of participating countries to shift resources into the production of goods and services for which the free trade area (FTA) created new demand could lead to adverse effect on the economy.  The lack of an enabling environment in participating countries creates difficulties in withstanding competition, makes them vulnerable to price variations and to collusive behavior of larger firms and price setting. In addition, they are in a weaker position to search for information, enforce contracts and property rights and to protect themselves from protectionist tendencies.

This implies that market access by itself is not sufficient to promote growth in countries facing supply side constraints. In such cases, market access has to be complemented by measures to relax supply-side constraints Therefore, it is important for all parties’ economies to be well-informed and able to respond to new opportunities that come with FTA. Unless a free trade agreement has indirect supply-increasing effects (such as might flow from greater investment), binding constraints to an increase in trade may remain in the form of limits to how far and how quickly a partner can increase production.

Tariff Provision: The extent to which an FTA actually changes tariff policy is an important factor that could influence the effect of free trade. Existing literature suggest that smaller, deferred tariff cuts will reduce the trade effect directly, and that the smaller the tariff cut the less likely it is that firms will bother with any additional red tape required to access FTA provisions. Therefore, extent to which an FTA will result in effective policy change (and hence produce a significant impact) depends partly on the relative importance of the tariff barriers that it cuts and the non-tariff barriers that are outside its scope.

In conclusion, analyzing the conditions for benefiting from a free trade agreement allows governments to display stronger leadership and readiness for the transition process. For key sectors where there are concerns about large job displacements, the liberalization process can be gradually phased in over a credible and finite time frame. On the other hand, to take full advantage of market access (and also better withstand enhanced import competition), policies to enhance competitiveness can be implemented as priority. Policy makers can use their political capital to take bolder steps that deepen mutual economic cooperation and help accelerate shared prosperity. Lastly, the smaller the tariff cut within an FTA the less likely it is that firms will find it commercially worthwhile to tackle non-tariff barriers.