The African Continental Free Trade Area’s Guided Trade Initiative (GTI), launched on October 7, 2022, to pilot and expedite AfCFTA provisions, has seen initial success with eight countries participating in its inaugural phase: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia. South Africa joined in January 2024.
As the second phase of GTI gains momentum, Nigeria stands poised to enter, heralding new avenues for trade expansion. This step is crucial as Nigerian exporters, who are currently grappling with domestic economic challenges, see the GTI as a beacon of hope, a gateway to broader African markets.
A newly released report, ‘Economic Impact of Nigeria’s GTI Participation: A Comprehensive Analysis ‘, assesses the economic impact of Nigeria’s GTI participation. It examines current trade dynamics, potential gains from tariff reductions, and strategies to optimize benefits.
Key findings reveal that while Nigeria’s current trade volumes with existing GTI countries are modest, sectors like cashews, ginger, and manufactured goods show substantial potential for growth under tariff elimination. This move could significantly enhance Nigerian exports and imports, fostering a positive economic ripple effect and a promising future for Nigerian trade.
Addressing potential challenges, such as reduced tariff revenue and increased competition for domestic industries, requires targeted policy interventions. Recommendations include active engagement of Nigerian businesses by the Government and the National Action Committee for Implementation of the AfCFTA (NAC-AfCFTA), ensuring comprehensive support through information dissemination, trade missions, and integration into continental value chains to bolster competitiveness.
Moreover, exploring alternative revenue sources to offset potential tariff revenue losses is advised, alongside leveraging programs like the Supporting Investment and Trade in Africa (SITA) initiative. SITA, a key player in Nigeria’s GTI participation, has played a pivotal role by facilitating evidence-based economic assessments, organizing stakeholder engagements, and providing crucial technical support for tariff concession implementation.
This comprehensive approach, which includes leveraging programs like the Supporting Investment and Trade in Africa (SITA) initiative and active engagement of Nigerian businesses by the Government and the National Action Committee for Implementation of the AfCFTA (NAC-AfCFTA), underscores Nigeria’s strategic alignment within the evolving AfCFTA framework. It positions the nation to harness the full potential of regional trade integration. For further details, stakeholders can access the full report, which delves deeper into Nigeria’s path toward maximizing benefits under the GTI.
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