The African superpower, Nigeria, has signed an agreement to strengthen trade between African countries. Although Southeast Asia continues to be a rapidly growing region for trade and commerce, with Africa developing through the new AfCFTA, it will become competitive. I anticipate that over the next five years we will see the beginning of milestones by foreign companies that originally began their expansion into production abroad for cost reasons in China, continue their journey to Southeast Asia, and then continue to travel to Africa. The AfCFTA has just gone further in reality. They are available in all forms and with different rules, but in short, they make trade between countries as liberal as possible and allow for more rules-based competition. Nigeria, Africa`s largest country, has emerged from the agreement due to concerns from the Nigerian Manufacturing Association, which sees AfCFTA as a negative impact on its members. Nigeria does have a separate free trade agreement with China, but this has been seen as less positive, as Chinese producers began to launch cheap and poorly manufactured products on the Nigerian market after they were signed in 2010. China and Nigeria have signed a series of agreements on trade, economic and technical cooperation, scientific and technological cooperation and an agreement on investment protection. The two countries have set up a joint economic and trade commission. The volume of trade between the two countries amounted to $1.86 billion in 2003, an increase of 59%. In the first four months of 2004, it continued to grow by 17.6% to reach $609 million, with a 330% growth in Nigeria`s exports to China. China`s main exports to Nigeria are light, mechanical and electrical industrial products.
China`s main import from Nigeria is oil, wood and cotton. At the pan-African level, the economic benefits of AfCFTA will be significant. According to the African Development Bank, the removal of tariffs on intra-African trade will increase continent-wide net profit by $2.8 billion per year. Removing customs equivalents from non-tariff barriers for goods and services would result in an increase in total net income of 1.25 per cent, or $37 billion, while the implementation of the WTO Trade Facilitation Agreement (TFA) would further increase benefits, with an estimated increase in total income of 3.5 per cent about $100 billion. ABUJA, Nov 12 (Reuters) – Nigeria has ratified its membership of the African Free Trade Area, which is due to be established in January, the government said after initial reluctance to join the bloc for fear of suspending dumping of local industries by countries outside Africa. He added that the two countries are now at peace and that Eritrea has asked the AU to conclude the agreement with them. It also estimates that the implementation of AfCFTA will lead to an increase in intra-African trade of about 60% by 2022. UNCTAD (2011). Trade in goods by partner and product: a database managed by the United Nations Conference on Trade and Development.