There are indications that the African Continental Free Trade Area agreement (AfCFTA) may skyrocket imported goods to Nigeria by up to 251% in the first 15 years.
This was the outcome of a research conducted by the Centre for Trade and Development Initiatives, University of Ibadan.
According to the report, Nigeria had the least import penetration in Africa from African countries, especially on goods currently attracting 20 per cent import duty.
“This obviously makes the country an export target for many African countries in the AfCFTA. Nigeria is trailed by South Africa, Tanzania, Cameroun and Egypt in the same level recording about 30 per cent import penetration,” it stated.
The report pointed outL “A three-phase liberalisation tariff rates from five per cent, 10 per cent, and 20 per cent to zero will likely generate higher surge of imported manufactured goods to the tune of about 159.5 per cent, 183 per cent and 251.4 per cent, respectively on the average during the 15-year period. The import growths would be higher if there were no room for exclusion.”
READ ALSO: Police gun down Abacha in Rivers (graphic photos)
It also stated, “Import will surge in all the manufacturing sectoral groups and by extension the77 subsectors in the third phase of the liberalisation. Particularly, tariff cuts would trigger increases in import for food, beverages and tobacco, 91 per cent; chemical and pharmaceutical products, 180.7 per cent; plastic and rubber products, 111.6 per cent; wood and wood products, 96.2 per cent; textile, apparel and footwear, 55.2 per cent; non-metallic, 67.2 per cent; electrical and electronics, 218.2 per cent; and motor vehicles and Assembly, 2000 per cent.”
The study concluded that in view of the high cost of manufacturing operating environment prevalent in Nigeria (well above the continental average), AfCFTA would have overwhelming negative impact on the manufacturing sector, even though in differing magnitude.
It added that liberalisation would spell doom for all the sectors; output would decline in all sectors but with higher magnitude in motor vehicle and miscellaneous assembly, chemical and pharmaceutical and electrical and electronic industries compared to others.
It stated, “The change in domestic outputs of manufacturing sector is negative and ranges from -10.00 per cent to -0.228 per cent; thus indicating that operators in the sector may close shop.
“Investment and employment in all industries will fall in the third phase (2029-2033) implementation of AfCFTA.”
The study also revealed that the leading supplier of African goods to Nigerian market is South Africa, accounting for 34.7 per cent of Nigeria’s import from African countries in 2017.
It said five out of 15 leading African supplying markets such as South Africa, Morocco, Côte d’Ivoire, Swaziland and Egypt accounted for 79.3 per cent of Nigeria’s import from Africa in 2017.