Banks, telcos to tap from $504bn market
Faced with a challenged manufacturing sector, the Nigerian government has said it will be leveraging the service sector to gain benefits from the African Continental Free Trade Area (AfCFTA). To this end, Nigerian banks, telecom operators and fintech companies in other African countries are being projected as the country’s exports to benefit from the reduced tariff under the continental trade policy.
This is coming against the backdrop of the fears that Nigeria may lose out in the continental trade policy due to poor manufacturing capacity. Analysts have also expressed worry that with the poor state of infrastructure and high cost of doing business in Nigeria, the country may not be able to sell its products to other African countries, as it would come at higher costs compared to products from other countries.
However, the Senior Special Assistant to President Muhammadu Buhari on Public Sector Matters, Mr. Francis Anatogu, who spoke on government’s preparation for the implementation of the trade policy, said Nigeria currently had a competitive edge in the service industry in Africa. According to him, many Nigerian businesses in the service industry already have presence in other African countries, and that would be leveraged in the first instance, while the country works on its infrastructure challenges to be able to export goods to neighbouring countries. According to him, countries on the continent import goods and services valued at $504.17 billion annually and Nigeria would also be tapping from this huge market through her exports into other countries in the region. Anatogu cited the United Bank of Africa (UBA), which has branches in 19 other African countries aside from Nigeria as one of the great exports of the country.
According to him, UBA is currently in Benin, Burkina Faso, Cameroun, Chad, Cote d’Ivoire, Congo Brazzaville, Gabon, Ghana, Guinea Conakry, Kenya, Liberia, Mali, Mozambique, RDC, Senegal, Sierra Leone, Tanzania, Uganda, and Zambia. Also in the banking sector, Guaranty Trust Bank (GTB) operates in Cote d’Ivoire, Gambia, Ghana, Kenya, Liberia, Rwanda, Sierra Leone, Tanzania, and Uganda. In the telecommunications sector, Nigerian telecoms operator, Globacom, is providing services in four other countries, which include Benin, Cote d’Ivoire, Ghana, and The Gambia. Anatogu said fintech companies such as Interswitch and Paga are also exporting their services to other African countries.
While Interswitch operates in Kenya and Uganda, Paga has presence in Ethiopia providing the same service it renders in Nigeria. According to Anatogu, who is also the Secretary of the National Action Committee on AfCFTA, Nigeria’s success with the trade policy will be measured by the creation of a diversified and sustainable Nigerian economy with strong linkages with neighbours and the top economies in Africa and a globally accepted country brand.
He added that the country would also be leveraging Af- CFTA to prepare for a post-oil revenue-driven society. The senior special assistant said the country had been making progress with the implementation as it has concluded negotiations on rules of origin for 12 per cent of tariff lines while it has also concluded negotiations on “trade in services” commitments. Anatogu said the trade agreement would give Nigerian businesses access to Africa’s export market, valued at $504.17 billion. While admitting that Nigeria currently lagged in manufacturing due to poor infrastructure, he said the government would this year embark on several projects to address the challenge.
According to him, the projects, which have been captured in the 2021 budget included N11.61 billion for the rehabilitation of various railway tracks including N8.86 billion for Nigeria Railway modernisation project Lagos– Ibadan-Kano. Other projects, according to him, include N6.05 billion for the construction of Iutreach centres including the supply of equipment; N1.01 billion for the development of National Transport Databank; N1.92 billion for Construction & equipping of Driver Development & Training Centres in six geo-political zones. On power, he said the government had also earmarked N1 billion for the distribution expansion programme projects to utilise the stranded power from the grid; N400 million for the completion of renewable energy micro utility (REMU) projects nationwide; N717 million for construction of 2x60MVA 132/33KV substation at Geidam Yobe State; N609 million for construction of 215MW LPFO/ Gas Power station Kaduna; and N2.5 billion for Kashambilla Transmission.