The Nigerian Government has urged African nations to enhance their local manufacturing capabilities and processing of raw materials. This call comes with a warning that the continent’s dependence on commodity exports curtails its economic potential and role in global trade.
Vice President Kashim Shettima made this statement during an international conference held in Abuja, focused on the African Continental Free Trade Area (AfCFTA) and the Geoeconomics of African States. Represented by Tope Fasua, Special Adviser to the President on Economic Affairs, Shettima highlighted the importance of moving away from merely exporting raw materials to developing industries that can generate more economic value.
Shettima explained that while Africa exports significant quantities of raw materials such as cocoa and crude oil, it often pays higher prices for imported finished products, resulting in a loss of much of the potential economic value derived from these resources. He noted that the Nigerian Federal Government is taking steps to improve this situation by supporting the establishment of lithium-processing factories in the country, aiming to bolster Nigeria’s position in the critical minerals value chain.
The vice president also stressed that Africa’s economic transformation hinges on transitioning from primary production to sectors focused on processing, manufacturing, technology, and knowledge-based services.
At the conference, Ngozi Okonjo-Iweala, the director-general of the World Trade Organization, emphasized the importance of industrialization and regional value chains for increasing Africa’s share in global trade. She pointed out that Africa has about 30 percent of the world’s critical mineral reserves yet accounts for only around three percent of global exports.
Okonjo-Iweala highlighted that intra-African exports made up approximately 17 percent of the continent’s merchandise exports, showcasing potential for growth in regional trade. She identified key obstacles such as infrastructure gaps, institutional challenges, and non-tariff barriers that hinder effective trade facilitation.
Former Nigerian President Goodluck Jonathan echoed the call for greater economic cooperation among African countries. He noted that the AfCFTA presents an opportunity for African nations to overcome market fragmentation and build a productive economy. He encouraged investments in various sectors, including agro-processing and renewable energy, to strengthen regional value chains.
The AfCFTA, which took effect in 2019, aims to create a unified continental market for goods and services while enhancing economic integration among African states. However, implementation has faced challenges, including infrastructural deficiencies and high transportation costs.
Bond Anyaehie, vice-chancellor of Nnamdi Azikiwe University, remarked on the necessity for competitive enterprises capable of sustaining trade within Africa. He emphasized that the success of the AfCFTA should be evaluated based on the continent’s ability to foster local production and trade.
