The African Continental Free Trade Area AfCFTA offers tremendous opportunity for unlocking business potential across the continent and the world. Historically, Africa’s Foreign Direct Investments (FDIs) as well as its regional and global value-chain participation have been consistently low, hampered by barriers to trade and competitiveness, according to a report by the World Economic Forum (WEF).The AfCFTA removes many of these barriers and unlocks opportunities for Africa to join regional and global value chains and integrate with international businesses.
Signed in 2018, ratified in 2019 and officially launched in 2021, the AfCFTA creates a single market in Africa. It also unlocks several opportunities for African and global businesses.The unified market under the AfCFTA enhances the competitiveness of local assembly and local sourcing partnerships.Indeed, in the continent, dwindling oil revenue in most oil producing countries and Nigeria provide a painful but indispensable opportunity to look inwards in a bid to trigger economic growth, experts have said.They also stressed the need for Nigerians to appreciate locally manufactured goods such as fabrics, saying such would make local industries thrive and boost economy.
For instance, Nigeria has the potential to become a major player in the global economy by virtue of its human and natural resource endowments. However, this potential has remained relatively untapped over the years. After a shift from agriculture to oil and gas in the late 1960s, Nigeria’s growth has continued to be driven by consumption and high oil prices. Oil accounts for more than 95 per cent of exports and foreign exchange earnings while the manufacturing sector accounts for less than one percent of total exports.Zenith Bank Plc strongly believes that AfCFTA, among other benefits, would expand intra-Africa trade and provide real opportunities for Africa and Nigeria in particular.
Also, the financial institution remains committed to promoting the non-oil export sector in Nigeria by identifying emerging opportunities which help stimulate non-oil exports and develop robust financial products and incentives for operators in the sector.
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These and also the need to reap from the numerous opportunities in the continent was what prompted Zenith Bank Plc to sign a Memorandum of Understanding (MoU) with the AfCFTA Secretariat for the development of the SMARTAfCFTA Portal, for trade promotion within the African continent.The SMARTAfCFTA Portal which has the capacity to provide information like trade indicators, market trends, custom tariffs, trade agreements, rules of origin, market access requirements of relevant jurisdictions, export potentials, export diversification indicators and contact details of business partners in target markets and other trade-related information about Africa, would help to unlock the vast opportunities for trade on the African continent.
The MoU was signed by the Group Managing Director/CEO of Zenith Bank Plc, Dr. Ebenezer Onyeagwu and the Secretary-General of the AfCFTA Secretariat, Wamkele Mene, during the 8th Annual Edition of the Zenith Bank International Trade Seminar on Non-Oil Export themed “Nigerian Non-Oil Export Industry: The Present, The Future,” held recently in Lagos.
Speaking on the partnership with AfCFTA for the development of the SMARTAfCFTA Portal, Onyeagwu, said: “This collaboration aims to unlock the vast opportunities presented by AfCFTA not only for Nigeria’s economic prosperity but also for advancing trade across African countries.”Onyeagwu, noted the key role that the annual Zenith Bank Trade Seminar plays in deepening the conversation on promoting non-oil export in Nigeria by bringing together non-oil export practitioners and relevant government agencies to interact and explore the opportunities and proffer solutions to the challenges of non-oil export in the country, noting that previous editions’ outcomes have found expression and influenced policy initiatives.
For instance, the extension of the period of repatriation of non-oil export proceeds from 90 days to 180 days, and the policy mandating shippers not to carry export without a Nigeria Export Proceeds (NXP) Form Number were recommendations from previous seminars.Also, the need to incentivise exporters to repatriate their export proceeds through the official channels and the recommendation to create export terminals across various export hubs in the country were also from past seminars. Also, previous editions recommended having Export Desks in commercial banks, which has now been instituted.
For Onyeagwu, expanding the country’s non-oil export has remained a matter of strategic economic importance requiring continual intervention.He believes that the impact of the pandemic on oil demand and, by extension, the price of crude oil in the international commodities market further exposed Nigeria’s over-dependency on crude oil earnings and its susceptibility to oil-related vagaries.“The expectation is that export diversification programmes and initiatives will intensify as Nigeria continues to re-orient its export profile and boost foreign currency earnings. Reinvigorating the Nigerian economy calls for measures to reduce the country’s dependence on oil exports.
“It requires expanding the array of the country’s value-added products that are exported to foreign markets. When combined with the promise of the AfCFTA, more non-oil exports translate into enterprise and industry level competitiveness with positive implications for job creation and technological development while enabling the country to earn and save much-needed foreign currency,” Onyeagwu explained.In his keynote address, Mene, thanked the Founder and Chairman of Zenith Bank, Jim Ovia, CFR, for partnering with the AfCFTA for the development of the SMARTAfCFTA Portal.
In his words: “Zenith Bank was the first bank to say ‘we want to partner with you”. We went to see the Founder and Chairman, and he said that Zenith Bank wants to make a contribution to digitise trade in Africa.“And so the portal was not my idea, it was not our idea at the AfCTA Secretariat, it was Zenith Bank that stepped up and said, ‘this has to be done!’. So I want to thank you very much, GMD for this collaboration.”
Citing an example of the 25-storey Cocoa house in Ibadan, which was built with proceeds from cocoa exports, Ovia he said many countries in the world, such as Japan and China have been successful because they are doing a great deal of innovation, production and manufacturing of goods and services.Ovia advised the country to look at promoting the nation’s non-oil export sector through technology to create technological giants like Apple, Tesla, and Google.“We already have technology companies in this mold in Nigeria, such as Flutterwave, which has a valuation of $3 billion, making it more valuable than some banks in Nigeria,” he said.
He said the most capitalised companies in the world, such as Apple, Microsoft, Alphabet (Google), Amazon, Tesla, and Visa, among others, are not oil companies but are in the technological innovation space.Furthermore, he highlighted the phenomenal growth of Nigeria’s emerging financial technology (Fintech) companies such as Flutherwave, OPay, Interswitch, Kuda and Paystack, with market valuations of $3 billion, $2 billion, $1 billion, $500 million, $200 million, respectively. According to him, this underscores the enormous opportunity in the Fintech space.
In his goodwill message, the Deputy Governor of Economic Policy, Central Bank of Nigeria (CBN), Dr. Kingsley Obiora, who represented the Acting Governor of the CBN, Mr. Folashodun Adebisi Shonubi, commended Zenith Bank for leading Nigeria’s non-oil export promotion advocacy.He bemoaned the 1.2 per cent non-oil export to total GDP ratio and emphasised the need for concerted efforts to boost non-oil exports in Nigeria.He also bemoaned the fact that poverty in Nigeria is at 31 per cent, saying that the projected 3.2 per cent growth for the country would not be enough to address the challenge of poverty.
“If you look at the equation for GDP, export enters not only as a multiplier effect, but as an endogenous variable, something that you can control fully by yourself.“So, we cannot grow at 3.2 per cent and expect to pull 31 per cent living below the poverty line. That is why I am so excited that Zenith Bank has continued to call attention to non-oil exports,” he added.Obiora said Nigeria needs to accelerate growth in its non-oil sector, saying “countries that are far smaller than us are doing much better.”Zenith Bank launched the Non-Oil Export Seminar in 2016 as an initiative to deepen the discourse on promoting the non-oil export business in Nigeria.Under the leadership of Onyeagwu, Zenith Bank Plc has continued to introduce initiatives to support economic growth, which is why the financial institution has consistently been honoured, both at home and abroad. Beside numerous awards, the bank recently won double honours at the London Stock Exchange (LSE) where it was named the Best Commercial Bank in Nigeria for the third year running and Best Corporate Governance Bank, Nigeria, for a second consecutive year at the World Finance Awards 2023.
