‘FG’s $1bn AfCFTA Fund May Fail Without Structural Reforms’

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LAGOS – Stakeholders in Nigeria’s maritime, lo­gistics and blue economy sectors have warned that the Federal Government’s proposed $1 billion African Continental Free Trade Area (AfCFTA) Adjustment Credit Facility will achieve little unless longstanding structural challenges un­dermining Nigeria’s competitiveness are urgently addressed.

While commending the initiative as a positive step towards supporting exporters and businesses seeking to ex­pand production under the continental free trade agreement, industry experts insist that access to finance alone can­not unlock the enormous opportunities offered by AfCFTA.

According to them, persistent chal­lenges—including the depreciating nai­ra, widespread insecurity, poor transport infrastructure, high production costs, multiple taxation, foreign ex­change constraints, cumbersome export procedures, excessive port charges and inefficient border op­erations—remain the major ob­stacles preventing Nigeria from fully benefiting from the African single market.

The Federal Government recently unveiled the $1 billion AfCFTA Adjustment Credit Fa­cility to assist businesses in ex­panding production, improving competitiveness and overcoming financing constraints associated with export documentation, cer­tification and market access.

The facility is expected to bridge funding gaps facing ex­porters and strengthen Nigeria’s participation in intra-African trade.

However, stakeholders argue that the programme fails to ad­dress the deeper structural prob­lems that continue to weaken Nigeria’s competitiveness under the AfCFTA framework.

They warned that unless ur­gent reforms are implemented, Nigeria risks becoming a major destination for goods produced by other African countries in­stead of emerging as a leading manufacturing and export hub.

The Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APF­FLON) commended the Federal Government for introducing the credit facility but stressed that fixing the operating environment should take precedence over ex­panding access to finance.

In a statement, APFFLON President, Otunba Frank Oguno­jemite, said although AfCFTA of­fers enormous opportunities for economic growth and regional integration, Nigeria’s ability to maximise those benefits depends largely on the competitiveness of local industries and the efficiency of its trade facilitation systems.

He noted that many of the problems that undermined pre­vious African trade agreements remain unresolved.

According to him, poor infra­structure, inadequate electricity supply, multiple taxation, foreign exchange shortages, high port charges, cumbersome export documentation and regulatory bottlenecks continue to frustrate manufacturers, exporters, freight forwarders, logistics operators and small businesses engaged in international trade.

The association further ex­pressed concern that many local manufacturers and Small and Medium Enterprises (SMEs) are already struggling under the current economic climate and may be unable to take advantage of AfCFTA opportunities despite the availability of credit.

“While access to finance is important, funding alone cannot solve the fundamental challeng­es affecting Nigerian business­es. Before providing large-scale AfCFTA credit support, govern­ment must first create an en­abling environment that allows local industries to compete effec­tively with their counterparts across Africa,” APFFLON stated.

The association called on the Federal Government to reduce port charges, eliminate unnec­essary trade bottlenecks, fully implement the National Single Window, modernise road, rail, port and border infrastructure, simplify export documentation, improve access to foreign ex­change, provide tax incentives for manufacturers and strengthen coordination among trade-relat­ed government agencies.

It also advocated policies that encourage value-added exports and industrial expansion, warn­ing that without comprehensive reforms Nigeria could lose out on the vast opportunities creat­ed by the continental free trade agreement.

Maritime experts echoed sim­ilar concerns, arguing that the continued depreciation of the naira has significantly weakened Nigeria’s competitive position within Africa.

Maritime expert, Ismail Aniemu, said the naira’s sharp decline against the US dollar and several African currencies, including the CFA franc, places Nigerian exporters at a serious disadvantage.

He also identified insecurity as another major obstacle, not­ing that many farmers can no longer cultivate or harvest crops because of attacks by bandits.

According to him, agricul­tural products expected to drive Nigeria’s non-oil exports under AfCFTA may never reach the market if insecurity in farming communities persists.

Frontline freight forwarder, Anefi Mohammed, described Nigeria’s foreign exchange sit­uation as highly unstable and damaging to trade.

He said the continuous depre­ciation of the naira has discour­aged importation, fuelled infla­tion and weakened consumers’ purchasing power.

According to him, importers now struggle to sell goods quickly enough to replenish their inven­tories, while shrinking consum­er demand has significantly re­duced business profitability.

He disclosed that cargo vol­umes through Nigerian ports have reportedly declined by about 50 percent as businesses scale back imports because of economic uncertainty.

Former President of the As­sociation of Nigerian Licensed Customs Agents (ANLCA), Tony Iju Nwabunike, urged Nigeria to position itself strategically to maximise AfCFTA opportuni­ties.

While describing Nigeria’s population of over 223 million people as a major competitive advantage, he maintained that the country must modernise its borders, strengthen security and upgrade trade infrastructure to compete effectively.

He said Nigeria possesses the capacity to become Africa’s manufacturing powerhouse but warned that inadequate prepara­tion could leave the country be­hind while other African nations take advantage of the agreement.

Nwabunike also criticised the slow pace of border modernisa­tion, observing that Nigeria cur­rently lacks smart borders capa­ble of supporting efficient trade, strengthening national security and monitoring cross-border movement of goods and persons.

He further advocated stronger diplomatic relations with neigh­bouring countries, particularly Niger Republic, to facilitate regional trade and accelerate strategic projects such as the Trans-Saharan Gas Pipeline.

In addition, he called for a more liberal visa regime to pro­mote the free movement of busi­ness people across Africa.

Industry observers noted that the African Continental Free Trade Area (AfCFTA) remains the world’s largest free trade area, bringing together all 55 African Union member states and eight Regional Economic Communi­ties to create a single continental market for goods and services.

The agreement is expected to stimulate industrialisation, strengthen regional value chains, promote investment, create jobs and significantly boost intra-Af­rican trade.

Nevertheless, analysts insist that unless Nigeria urgently ad­dresses its macroeconomic and structural weaknesses, the coun­try’s enormous market size alone will not guarantee meaningful gains under the continental trade agreement.

They maintain that sustain­able economic growth, increased exports, industrial development and job creation can only be achieved through far-reaching reforms that improve Nigeria’s production capacity, logistics systems, trade infrastructure and overall ease of doing business.