CBN charges non-oil businesses to exploit $666.2bn AfCFTA trade potential

Onome Amuge

The Central bank of Nigeria (CBN) has enjoined the Nigerian private sector, particularly firms in the areas of manufacturing, ICT, agriculture,financial services and other non-oil sectors to expand into new markets and seek export opportunities in the African Continental Free Trade Agreement (AFCFTA) projected to give Nigerian firms preferential access to markets in Africa worth $504.17billion in goods and $162bn in services.

Godwin Emefiele, the CBN governor, who made the statement at the Zenith Bank 2021 Export Seminar held on Wednesday April 20, pointed that Nigeria possesses a growing advantage in the non-oil sector areas relative to its counterparts in other parts of Africa and the market opportunities presented by AfCFTA should be fully optimised to ensure that Nigeria serve as a significant hub for international and domestic manufacturing companies seeking to serve the West, Central and East African Markets.

Commenting on the volatility in the oil markets along with the growing trajectory towards lesser use of fossil fuels in the near future,Emefiele noted that the country’s economic diversification plan focused on non-oil exports and intra-regional trade, if well harnessed, would enable greater economic growth, create employment opportunities for the country’s growing population and generate improved foreign inflows for the Nigerian economy and also provide significant benefits for innovative firms, as they can sell their goods and services to an expanded market.

Highlighting the initiatives being put in place by the apex bank to improve the productive capacity of the non-oil sector and ensure that Nigerian businesses are able to take advantage of the growing opportunities in the African Market, Emefiele said  the CBN has set up a N500bn non-oil export stimulation facility with the Nigerian Export Import Bank (NEXIM) to enable greater exports of processed agriculture commodities into other markets in Africa and in the global market.

He further divulged that the Central Bank through its Trade Monitoring System portal (TRMS) is also helping to reduce the time it takes to complete the export documentation process, as faster turnaround time could help to reduce delivery time for goods destined for exports, and enable businesses expand their output. He added that the CBN is working with stakeholders in repositioning the Nigerian Commodity Exchange, which would help to support greater trade for operators in the non-oil sector.

“Once the exchange becomes fully operational in the second half of the year, international buyers of raw and processed agricultural commodities will be able to enter into forward contracts with domestic suppliers on the exchange, and they can be assured of not only the quality of the goods sold through the exchange, but on the expected date of delivery,” he stated.

He also assured that the CBN’s agricultural intervention programmes will help to support improved productivity for farmers and agro-processors and also help to improve access to credit for these entities using the forward contracts as collateral.

Speaking on the apex bank’s commitment to ensuring easier trade within Africa through a viable payment settlement system, Emefiele assured that the CBN is working with key stakeholders in the African continent, particularly the AfreximBank to improve the underlying payment infrastructure to support greater intra-regional trade, through the Pan African Payments and Settlement System(PAPSS). This initiative, he explained, will enable payments in Nigeria’s local currency for goods in other African countries and vice versa, without the need for a third-party currency, helping to reduce the cost of cross border trade, improve convertibility of the Naira, and increase trade opportunities for Nigerian businesses in Africa.