AfCFTA zero-tariff unprofitable without diversified exports – Experts

Economic experts have warned that the Federal Government can only take full advantage of the African Continental Free Trade Area zero-tariff window by rapidly industrialising and producing more export-ready goods for African markets.

Their call follows Nigeria’s recent gazetting of the Provisional Schedule of Tariff Concessions, becoming the 23rd AfCFTA state party to do so.

Also, President Bola Tinubu recently signed and submitted the Economic Community of West African States Schedule of Tariff Offers, which removes import tariffs on 90 per cent of goods traded within Africa under the AfCFTA agreement.

Stakeholders argue that the development presents a unique opportunity for Nigeria to grow its non-oil exports, boost intra-African trade, and diversify its economy away from crude oil dependence.

The former President of the Chartered Institute of Bankers of Nigeria, Prof Segun Ajibola, in a phone interview with The PUNCH, welcomed Nigeria’s gazetting of the waiver of tariffs among African countries.

However, he stated that it would only translate into benefits if the country had sufficient exportable goods, stating, “If the tariff is successfully waived among African countries, it will now be a challenge to each African country to develop something to export to others.”

Ajibola explained that Nigeria could benefit immensely from the policy if it focused on non-oil sectors such as agriculture, manufacturing, and the creative industries.

“We produce food and other agricultural products like cocoa, rubber, and cotton. We have solid minerals. These are non-oil exports that can enjoy zero tariffs. It’s a win-win situation, but we must do more to take advantage of that policy,” he said.

He noted that many Nigerian manufacturers already have products ready for export and can leverage the AfCFTA incentives almost immediately, while addressing concerns about how Nigerian exports suffer quality and branding gaps, which reduce their competitiveness.

“There are items that are exportable within a very short space of time. Manufacturers like Dangote, Nestlé, Nigerian Breweries, and Guinness already produce regularly. Some products don’t even have issues with quality. We can start taking advantage immediately,” he added.

Meanwhile, economist and former Vice-Chancellor of the University of Uyo, Prof Akpan Ekpo, warned that Nigeria and other ECOWAS countries may not gain much from the tariff removal in the short term if they continue to export only raw materials.

“There is no ECOWAS country that is industrialised. We all export the same raw materials. I do not see any gain from the tariff removal,” Ekpo lamented. “Then you say we trade among ourselves; import and export among ourselves? We have to ask, what are we trading, importing, and exporting?”

Ekpo stressed that real gains from AfCFTA would only come when African countries, particularly Nigeria, shift from exporting unprocessed commodities to producing manufactured goods and services.

“If we want to benefit from tariff removal, we must start exporting manufactured goods and services,” the economist stressed. “Right now, Nigeria exports crude oil and raw cassava. Ghana exports raw cocoa. Sierra Leone exports unprocessed diamonds. There is no value added. So, whether you remove tariffs or not, in the short term, you don’t gain anything.”

He called on Nigeria to use the opportunity to build a productive, industrialised economy, noting, “We need to industrialise. When we do that, then we can begin to enjoy the benefits of tariff removal under AfCFTA.”

The AfCFTA Secretariat on April 14 confirmed on X that Nigeria had become the 23rd country to gazette its PSTC, a move it said provides certainty for businesses, confirming Nigeria’s commitment to granting preferential tariff treatment to eligible imports.

Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, also hailed the development in a statement, describing it as a big win for Nigerian trade.

“This strengthens our role in shaping the future of African trade and unlocks new opportunities for businesses and exporters,” she stated.

Under the AfCFTA, African countries are expected to remove tariffs on 90 per cent of goods, promote free access to commodities, goods, and services across the continent, and deepen economic integration.