For Nigeria, the promise of a unified African market has been both exciting and complex. Five years after joining the African Continental Free Trade Area (AfCFTA), the country is still learning how to turn continental trade potential into practical gains for businesses and the economy. A recent government review offers the first comprehensive look at how Nigeria is faring under the Phase I Protocols, which cover Trade in Goods, Trade in Services, and Dispute Settlement.
The report, produced by the Federal Ministry of Industry, Trade and Investment with UNDP support, highlights progress in aligning policies and procedures while also exposing persistent challenges in implementation.
Trade in Goods: Policy Progress Meets Practical Hurdles
A central goal of AfCFTA is to eliminate tariffs on 90% of intra-African trade. Nigeria has submitted its tariff offer through the ECOWAS common schedule, signaling alignment with the continental objective. Sensitive products will see a gradual phase-out over ten years.
However, actual trade remains limited. Exports to African markets are still dominated by crude oil, with manufactured goods and processed foods representing only a small fraction. Non-tariff barriers—including border delays, inconsistent standards, and administrative bottlenecks—continue to frustrate trade, limiting the practical benefits for many businesses.
Officials, including Dr Jumoke Oduwole, Minister of Industry, Trade and Investment, stress that policy ambition alone is not enough. “The challenge lies in execution,” she noted, highlighting 2025 priorities such as investment mobilization, export diversification, and trade policy reform with AfCFTA at the center.
Efforts to ease trade include the rollout of the Unified Customs Management System (UCMS), B’Odogwu, aimed at automating cargo clearance across ports and borders by 2025. Despite these measures, many MSMEs remain excluded due to low awareness of AfCFTA and the administrative requirements for certification and rules-of-origin compliance.
Trade in Services: Nigeria’s Growing Advantage
While goods have dominated discussion, services could represent Nigeria’s biggest AfCFTA opportunity. Contributing about 53–57% of GDP after the 2024 rebasing, the services sector—led by ICT, finance, logistics, and creative industries—positions the country for significant gains in cross-border service trade.
Nigeria has submitted draft offers for five priority service sectors: business, communication, financial, transport, and tourism services. Yet regulatory hurdles persist. Licensing procedures remain cumbersome, and cross-border digital payment systems require clearer rules to unlock their full potential.
Fintech companies like Flutterwave and Paystack illustrate how digital services can thrive regionally. In 2024, Nigeria’s digital and online service exports were valued at roughly $1.5 billion, demonstrating early progress in leveraging services as a continental trade advantage.
Vice President Kashim Shettima has noted that Nigeria’s innovations in mobile payments and digital commerce have set the country up as a hub for Africa-wide digital trade, but growth depends on regulatory harmonization and infrastructural support.
Dispute Resolution: A Critical Weakness
AfCFTA includes a dispute settlement framework modeled on WTO rules. Yet Nigeria still lacks domestic mechanisms to handle such disputes. No specialized tribunal or dedicated legal desk exists, though ECOWAS workshops have started building capacity for judges and trade officials. Industry groups, including NECA, warn that without effective safeguards against unfair practices like dumping, Nigerian businesses risk being disadvantaged.
Sectoral Performance: Uneven Benefits
Some sectors are reaping AfCFTA’s benefits while others lag. Agriculture remains heavily protected, with high tariffs on staples limiting integration with African supply chains. Conversely, manufacturing and construction materials, particularly companies like Dangote Cement, are expanding their pan-African presence. Tech and logistics firms such as Kobo360 and MAX Mobility are also entering regional markets successfully.
Textiles and light manufacturing, however, struggle. Cheap imports, mainly from Asia, flood local markets, while domestic mills fail to compete, resulting in annual textile import spending of roughly ₦1.3 trillion.
Institutional Readiness: Progress and Fragmentation
Nigeria’s AfCFTA coordination is improving but remains fragmented. The National Action Committee (NAC-AfCFTA) leads overall coordination, with a Central Coordination Committee established in 2025. Overlapping mandates, limited funding, and bureaucratic inefficiencies continue to slow progress. The 2025 federal budget earmarked only ₦1 billion for AfCFTA-related transport and trade initiatives, highlighting underinvestment in implementation.
Conclusion
Nigeria’s AfCFTA journey reflects a balance of early wins and ongoing challenges. Services, especially digital trade, offer a path to significant gains, while goods trade and dispute resolution mechanisms remain weak links. Translating policies into actionable results for exporters—particularly MSMEs—will be key to realizing the full potential of Africa’s single market and establishing Nigeria as a continental trade leader.
