The African Export-Import Bank (AFREXIMBANK) has pledged to allocate $500 million from its Nigeria-Africa Trade and Investment Promotion Programme to support Nigerian manufacturers.
The bank’s President, Benedict Oramah, announced in Lagos that the facility is expected to help manufacturers take advantage of the opportunities offered by the African Continental Free Trade Area (AFCFTA) agreement.
Mr Oramah was the guest speaker at the Annual Lecture and Presidential Luncheon organised as part of the 47th Annual General Meeting of the Manufacturers Association of Nigeria (MAN).
He said the facility would support Nigerian manufacturers to expand trading in their products, as well as to source raw materials from other African countries.
Also, the facility would support the manufacturers to adjust to any difficulties that might arise due to the implementation of the AfCFTA agreement.
He said AFREXIMBANK officials would meet with representatives of MAN to work out the implementation, modalities, and terms and conditions for the facility for prospective beneficiaries.
The opportunity for African manufacturers under the AfCFTA, the AFREXIMBANK president said, was phenomenal, as its intra-regional trade in manufactures could rise to more than $150 billion by 2022 as a result of the entry into force of the agreement.
“By 2022, the AfCFTA was expected to bring the share of intra-African trade from current levels of about 16 per cent to 22 per cent, bringing total intra-African trade to about $250 billion dollars, from about $160 billion,” he said.
He said the coming into force of the AfCFTA opens the wider African market to Nigerian manufacturers, creating a market of 1.2 billion people and a combined gross domestic product (GD) of about $2.5 trillion.
The preferences that the AfCFTA offers, Mr Oramah said, can make Nigerian manufactured goods more competitive in many African markets and can also make it possible to achieve integration into regional and global supply chains.
He recommended that Nigeria should prioritise labour-intensive light manufacturing in its industrial policy to enable manufacturers and others to begin to appreciate that the country’s most abundant resource was its labour.
“Private sector-promoted heavy industries should be supported under a special arrangement that targeted the production of critical industrial raw materials, such as petrochemicals, machine tools, cement, steel,” he added.
On the various facilities AFREXIMBANK has for African manufacturers under its Industrialization and Export Development and Intra-African Trade strategies, he listed them to include the Export Development Programme for export manufacturers; the Intra-African Investment Financing Facility in support of cross-border investments in Africa.
The other programmes are the Intra-African Investment Guarantee Facility; a series of facilities under the Trade Financing Programme; the Franchise Financing Facility; and the Guarantee Programme covering an array of scenarios.
The President of MAN, Ahmed Mansur, said the manufacturing sector in Nigeria faces daunting challenges associated with a deeply eroded infrastructure, poor condition of highways and waterways, absence of a good rail network and other impediments which rendered manufacturing uncompetitive.
Mr Ahmed commended the federal government for its effort to address the challenges and encouraged it to tackle critical issues to ensure that the manufacturing sector was positioned to participate effectively in the AfCFTA.
The Minister of Trade and Industry, Adeniyi Adebayo, who represented President Muhammadu Buhari of Nigeria, spoke of government’s various products, programmes and facilities to boost trade and industry.
