A combination of the health pandemic and border closure has cost Nigeria nearly N2 trillion worth of trade relationships with other African countries according to data collated from National Bureau of Statistics (NBS), by MoneyCentral.
In 2020, Nigeria saw its imports from African nations decline from N1.1 trillion to N666 billion, a decline of around N439 billion as border closure and COVID-19 restrictions led to a collapse in import trade with African countries by nearly 40 percent in 2020 alone.
On the export leg, Nigeria lost far more than African nations conceded to it in the import trade. In 2020, Nigeria’s exports to African nations collapsed from N3.9 trillion to N2.3 trillion, representing a decline of around N1.55 trillion as the crude oil price and COVID-19 restrictions in other African nations had a significantly negative impact on Nigeria’s export performance with its African counterparts.
In total, business worth around N2 trillion was lost in a single year due to the border closure in Nigeria, tight COVID-19 restrictions on movement of goods and the oil price volatility. This poor trade performance with other African countries leaves much to be hoped for in the newly launched African Continental Free Trade Area (AfCFTA).
AfCFTA refers to a continental geographic zone where goods and services move among member states of the AU with no restrictions. The AfCFTA aims to boost intra-African trade by providing a comprehensive and mutually beneficial trade agreement among the member states, covering trade in goods, services, investment, intellectual property rights and competition policy. Concerning trade in goods, the goal is set for 90% of products at zero duty across the continent.
As at today, 54 out of the 55 African countries have signed the AfCTA agreement but only 31 countries have ratified the agreement. Nigeria is among the African nations yet to ratify the agreement and it is still unclear why Nigeria is yet to ratify the agreement after signing to join the AfCTA bloc in 2019.
In December 2020, Nigeria decided to lift its land border closure imposed on Benin and Niger republic about 16 months after it had put the border closure in place to curb movement of contraband products and boost local production.
Since August 2019 when the border closure was put in place, inflation has risen every single month since then, moving from 11.02 percent in August 2019 to 17.3 percent in February 2021. The border closure did not only fail on its promised objective, but it also led to 18 consecutive months of inflation increase and contributed significantly to the N2 trillion shortfall in Nigeria’s African trading business in 2020.