By Steve Agbota
Rising cost of importing goods especially raw materials for local production of goods meant for the African market may hobble Nigeria’s chances of maximising the potential of the Africa Continental Free Trade Area (AfCFTA) agreement.
This is because beyond the high import cost freighting manufactured goods from Nigeria to other parts of Africa may still pose significant challenges with the absence of indigenous carriers.
Presently, the cost of shipping 40ft container from China to Nigeria has doubled from $7,200 to about $14,700. This will definitely put Nigeria to disadvantage and could threaten its commitment to play a leading role in $3.4 trillion continental market.
With other associated operational cost also hitting new highs since the outbreak of COVID-19 pandemic, indications are that the country’s manufacturers would have to contend with rising costs of operations, which may eventually see them playing the catch-up with other African countries under AfCFTA.
Speaking with Daily Sun, an economist and leading importer, Tony Enahoro, said Nigeria could become a dumping ground for finished products from other African countries if its high production cost continues to make it uncompetitive compared to other nations on the AfCFTA.
He urged the government to take proactive measures to resolve the issue of the poor competitiveness in the manufacturing sector. He hinted that the competitiveness of participating countries in AfCFTA would be driven by reasonable production cost, business enabling environment, easy accessibility to the markets, innovation, and value addition. He said for a very long time, the nation’s manufacturing sector has been facing low competitiveness, majorly caused by high cost of production due to infrastructural deficiency in the country.
Meanwhile, President of African Association of Professional Freight Forwarders and Logistics in Nigeria (APFFLON), Mr. Frank Ogunojemite, said the cost of transporting 40ft container from China to Nigeria has moved to about $14,700, as against $7,200 about a year ago.