Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has warned that the global order is fast changing and Africa needs to see opportunity in the crisis and diversify its market inwardly by trading more with itself through the African Continental Free Trade Area (AfCFTA).
The Apex Bank Chief made the call on Wednesday while delivering a keynote address at the 7th Africa Emerging Markets Forum co-hosted by the CBN in Abuja, under the theme “Building Resilience Amidst Geoeconomic Uncertainty.”
He emphasized that the global system, which has historically shaped economic development, is currently undergoing significant changes, necessitating a strategic response from African nations.
“For Africa this change is both a warning and an opportunity. With Intra African trade still Accounting for 16% of our total trade we must build stronger regional value chains, Produce more of what we consume and trade more with one another.” Cardoso said.
“The African Continental Free Trade Area (AfCFTA) provides the platform and the opportunity to turn this global shift to an African advantage,” he added; while also urging the removal of barriers within the AfCFTA, which include transportation, customs, and implementing faster cross-border payments.
Still on the global changes, Cardoso emphasized that capital has become “selective and impatient” and should be channeled towards “productive domestic investments.”
Despite the continent’s vast market potential, intra-African trade remains among the lowest in the world, accounting for roughly 14% to 16% of Africa’s total global trade volume, a stark contrast to Europe’s 68% and Asia’s 59%.
Supply Chains insight from WTO DG, Dr. Ngozi Okonjo-Iweala
Dr. Ngozi Okonjo-Iweala, Director-General of the World Trade Organization (WTO), during a fireside chat with the CBN Governor, said that geo-economics is leading to changes in the way supply chains are configured. She highlighted that the shipping sector and pharmaceuticals are looking for markets to diversify, and Africa needs to see the opportunity in these changes and take advantage of them.
“We have built up an over dependency….these leading supply chain CEOs in different sectors from automobile to pharmaceuticals, even furniture are looking to diversify and that’s where we in Africa can do better to attract this supply chains.” Dr. Okonjo-Iweala said in response to the question asked by the CBN Governnor on opportunities for Africa amid changing global landscape.
She highlighted that Africa should be able to attract critical mineral supply chains linked to renewable energy, like lithium, which is majorly processed in China and the United States for Electric car batteries.
“we have some of the critical mineral and rare earth between us (referring to Nigeria) and Ghana, Guinea…all along the west African coast.” “I don’t think it should be just a country to country affairs..we need to think of sub regional supply chain.” She added.
According to data from UN Trade and Development (UNCTAD) and Afreximbank, over 80% of African exports are shipped outside the continent, consisting largely of unprocessed raw commodities.
Regarding African emerging markets, Dr. Okonjo-Iweala encouraged African nations to think strategically about the types of trade agreements they seek, both at the WTO level and through regional or bilateral channels, to capture more market share beyond their current low percentage of global trade.
The WTO DG said the continent’s progress over the next decade will depend on leaders who are able to implement policies that will ease and support regional trade.
