The African Development Bank, AfDB, says Nigeria remains Africa’s largest market with great potential to be a main driver of continent’s economic growth considering its population. This was disclosed in the West African Mid-Term Review and Regional Portfolio Performance Review Paper 2011 – 2015 of the AfDB.
The report, says with the gross domestic product, GDP, rebasing, Nigeria now has the largest economy in Africa and a great potential for its services and manufacturing sectors stating that the country also attracted half of the Foreign Direct Investment, FDI, coming into the region with about 45 per cent in 2012.
It stated that goods such as cement, cassava flour and other goods from Nigerian companies served the needs of their clients across West Africa. It said that closer integration with the region would require Nigeria to open its markets to regional exports, adding there was need for a change of perspective on the neighbouring countries.
According to the report, it is more crucial for the country to treat its regional neighbours more as partners rather than clients. “Regional value chains have a real potential, particularly given the developments in regional transport and connectivity infrastructure. Increasing trade volumes will require improvements in regional corridors reducing frictions related to non-tariff barriers, as well as accountability and transparency in regulations, both on the national and on the regional level,” it said.
The report identified that poor cross-border trade and infrastructure, as well as the weaknesses of human capacity and national and regional institutions as some of the challenges of regional integration adding that fragmentation of the region’s market, multiplicity of integration architecture and insufficient involvement of private sector and civil society in integration effort were also part of the challenges. Illegal checkpoints, long and non-harmonised customs procedures, smuggling and corruption are important obstacles to the free movement of goods and people.
It also said that building regional value chains in West Africa, in areas such as agro processing, would help support the efforts in better linking regional markets. “While the region is the world’s largest producer of cocoa beans, 90 per cent of the crop is exported raw or roasted, packaged and sent to the United States or Europe. This denies Africa of the most profitable part of the confectionery market value chain the processing of the cocoa into chocolate. The first steps in undoing this disadvantage are to promote policies within the broader development framework, attracting FDI, building productive capacities in local firms and encouraging manufacturing,” it added.