They are available in all forms and with different rules, but in short, they make trade between countries as liberal as possible and allow for more rules-based competition. The AU says the African Continental Free Trade Area, called AfCFTA, will create the world`s largest free trade area. It also estimates that the implementation of AfCFTA will lead to an increase in intra-African trade of about 60% by 2022. Free trade agreements aim to reduce tariffs between Member States. The country has signed a trade agreement with 21 other countries in the cycle of the Global System of Trade Preferences between Developing Countries (GSTP). The most important effects are informal traders – most of them are small and medium-sized enterprises operating along the Nigeria-Benin border. Nigeria`s high level of protection for products such as rice has made smuggling from neighbouring countries very lucrative. The World Bank estimates that 80% of Benin`s imports go to Nigeria. With its entry into force, AfCFTA intends to create an internal market for goods and services in Africa. By 2030, the continent`s market size is expected to be 1.7 billion people, with more than $6.7 trillion in cumulative consumer and business spending – when all African countries join the Agreement. But despite these prospects and Nigeria`s positive attitude towards the outside world, the country continues to put a big red flag on free trade hopes across the continent. Nigeria has ratified the free trade agreement, which will enter into force on 1 January 2021. This is an important step for the ambitions of the African Continental Free Trade Area (AfCFTA), as Nigeria is considered not only one of the continent`s largest economies, but also the most populous country.
The African superpower, Nigeria, has signed an agreement to strengthen trade between African countries. The world`s largest free trade area since the World Trade Organization has come closer to reality. Trade accounted for 33.0% of Nigeria`s GDP in 2018, up from 26.3% the previous year, according to the World Bank. The country exports mainly oil (82.3% of export earnings in 2018, the latest available data) and oil (11.1%), and imports oil (29.0%), light boats (9.1%), wheat and Meslin (3.2%), motor vehicles (2.8%), motorcycles (1.6%). Nigeria`s main trading partners are India, China, the United States, Belgium, Spain, the Netherlands, South Korea, South Africa and France. Nigeria has signed trade agreements with a number of countries in Africa, the Caribbean, the Pacific and the European Union. Raw materials and semi-finished products benefit from tariff reductions, although the country remains protectionist in certain sectors such as agriculture. According to NEPZA, 24 tax-free zones and 8 others are currently under construction in Nigeria.
According to the WTO, a non-tariff measure was in effect in Nigeria from mid-2018. Persistent barriers to trade and investment persist in the country, mainly due to long-term bureaucratic delays. Nigeria`s trade policy aimed to promote and diversify its exports by strengthening national competitiveness and encouraging liberalization through the reduction of subsidies. However, according to the WTO, the fall in oil prices in 2016 has hampered diversification efforts. Affected by lower oil prices and production, the country`s trade balance in 2015-16 was negative for the first time in seven years. However, in 2017 and 2018, the trade balance was again positive ($13.15 billion and $22.34 billion) due to higher prices and a recovery in exports. You also get rid of quotas, so there is no limit to the amount of trade you can trade. It describes the bilateral and multilateral trade agreements to which that country belongs, including with the United States.