The African Export-Import Bank (Afreximbank) will allocate $500 million from its Nigeria-Africa Trade and Investment Promotion Programme to support Nigerian manufacturers to take advantage of the opportunities offered by the African Continental Free Trade Area (AFCFTA) agreement, Bank President Prof. Benedict Oramah, has announced in Lagos.
Prof. Oramah, who was the guest speaker at the Annual Lecture and Presidential Luncheon organised on Tuesday as part of the 47th Annual General Meeting of the Manufacturers Association of Nigeria (MAN), said that the facility would support Nigerian manufacturers to expand trading in their products into, and to source raw materials from, other African countries.
It would also support them to adjust to any difficulties that might arise due to the implementation of the AfCFTA agreement, he continued, adding that Afreximbank officials would meet with representatives of MAN to work out the implementation modalities, terms, and conditions for the facility.
President Oramah said that the opportunity for African manufacturers under the AfCFTA was phenomenal and that intra-regional trade in manufactures could rise to more than $150 billion by 2022 as a result of the entry into force of the agreement.
By 2022, the AfCFTA was expected to bring the share of intra-African trade from current levels of about 16 percent to 22 percent, bringing total intra-African trade to about $250 billion dollars, from about $160 billion, he added.
According to him, the coming into force of the AfCFTA opens the wider African market to Nigerian manufacturers, creating a market of 1.2 billion people and a combined GDP of about $2.5 trillion. The preferences that the AfCFTA offers can make Nigerian manufactured goods more competitive in many African markets and can also make it possible to achieve integration into regional and global supply chains.
Prof. Oramah recommended that Nigeria should prioritize labour-intensive light manufacturing in its industrial policy in order to enable manufacturers and others to begin to appreciate that the country’s most abundant resource was its labour. Private sector-promoted heavy industries should be supported under a special arrangement that targeted the production of critical industrial raw materials, such as petrochemicals, machine tools, cement, steel, he added.
He informed the audience about the various facilities that Afreximbank had available for African manufacturers under its Industrialization and Export Development and Intra-African Trade strategies. Those included the Export Development Programme which was available for export manufacturers; the Intra-African Investment Financing Facility which supports cross-border investments in Africa; the Intra-African Investment Guarantee Facility; a series of facilities under the Trade Financing Programme; the Franchise Financing Facility; and the Guarantee Programme covering an array of scenarios.
Also speaking, Ahmed Mansur, President of MAN, said that the manufacturing sector in Nigeria continued to face daunting challenges associated with deeply eroded infrastructure, poor condition of highways and waterways, absence of a good rail network and other impediments which rendered manufacturing uncompetitive.
He commended the federal government for its effort to address the challenges and encouraged it to tackle critical issues to ensure that the manufacturing sector was positioned to participate effectively in the AfCFTA.
Also addressing the session was Adeniyi Adebayo, Minister of Trade and Industry of Nigeria, who represented President Muhammadu Buhari of Nigeria.
Afreximbank also took advantage of the MAN Annual General Meeting to hold a roadshow, showcasing its various products, programmes and facilities to the meeting participants.