Nigeria’s Export Dreams Falter Amid Forex Crisis
Four months after Nigeria marked its entry into the African Continental Free Trade Area (AfCFTA) under the Guided Trade Initiative, the country’s exporters are facing serious challenges. The forex crisis, which has led to skyrocketing logistics costs, is stymieing their ability to capitalise on Africa’s $3.4 trillion free trade zone, leaving many struggling to fulfil their potential.
In July, the Federal Government, through the Nigeria AfCFTACoordination Office, announced that 10 Nigerian companies would begin exporting a variety of homegrown products to markets across East, Central, and North Africa. Olusegun Awolowo, National Coordinator of the AfCFTA Office, celebrated the milestone at a ribbon-cutting ceremony in Lagos, describing the initiative as a new standard for Nigerian businesses in the international arena.
Among the companies participating were Le Look Nigeria Limited, which was tasked with exporting bags to Kenya, Secure ID Limited exporting smart cards to Cameroon, and Dangote’s clinkers bound for Cameroon. Despite the fanfare, many of these businesses have hit logistical roadblocks.
Chinwe Ezenwa, CEO of Le Look Nigeria Limited, highlighted the steep costs that have plagued her efforts to export her products. “The challenge has been the cost of freighting, which has skyrocketed because airlines have increased prices due to the forex crisis,” Ezenwa explained. She revealed that she had only been able to export 5,000 school bags since July, a fraction of the 20,000 initially planned.
Despite establishing a warehouse and finding a partner in Kenya, Ezenwa lamented that currency instability had limited her ability to scale up her exports. “If not for the forex issue, I would have exported over 15,000 bags by now,” she said, appealing for government support in the form of loans with more favourable interest rates to help small and medium-sized enterprises (SMEs) weather the storm.
The forex crisis is not the only obstacle hampering Nigeria’s integration into AfCFTA. Dr Obiora Madu, Director-General of the African Centre for Supply Chain, pointed to deeper structural issues within the country’s export sector. “The problem is not a lack of opportunities but a lack of export culture and expertise,” Madu observed, stressing that Nigerian businesses need more capacity building and a stronger export mindset if they are to compete successfully on the AfCFTAplatform.
As Nigerian exporters battle these headwinds, there is growing concern that the country’s aspirations to lead in Africa’s free trade zone may fall short. Without swift action to stabilise the forex market and bolster local businesses, Nigeria risks being left behind in what is touted as the continent’s most transformative trade initiative.
