Nigerian manufacturers, through the Pan-African Manufacturers Association (PAMA), has lamented the excessive bottlenecks that accompany transactions and trades that involve a country and another, especially within Africa.
The body, in a series of revelation by his co-secretary, Segun Ajayi-Kadir, decries that despite the launch of the African Continental Free Trade Area (AfCFTA) in 2019, the trade between two and more African countries face difficult and stringent processes that make trading almost impossible. ENigeria Newspaper also obtained that the group condemned that these bottlenecks, if not removed, would dampen the potential of trade and manufacturing in the continent.
Ajayi-Kadir blamed the situation on a deep-rooted structural weaknesses that have persisted for decades, enabling trade between within African countries to account for only 18 per cent of the continent’s total commerce.
“Africa’s limited development of regional value chains is a fundamental structural challenge. Unlike the EU or Asia, where production is integrated across borders, African economies largely operate in isolation. This limits specialisation, reduces economies of scale and weakens participation in global production networks,” he said.
He also affirmed that with many economies, like Nigeria, still exporting raw materials rather than manufacturing and trading value-added items domestically, Africa has failed to provide smooth cross-border trade in manufactured goods.
“Unfortunately, trade across Africa remains complex, costly and operationally inefficient, despite decades of regional integration efforts and AfCFTA. While policy frameworks claim liberalisation, the lived reality for us continues to be shaped by a combination of structural, institutional and market constraints.
“At the core of these challenges are high tariffs and non-tariff barriers (import bans, quotas, and inconsistent standards), inefficient customs, poor transport and logistics infrastructure, as well as limited regional connectivity, which increases transit times and reduces supply chain efficiency.
“Others include high cost of trade finance, currency constraints, volatility and limited convertibility, weak implementation of regional agreements and prevalence of informal and illicit trade, which is encouraged by weak border enforcement and entrenched informal networks diverting trade from formal channels and eroding government revenues.
“Africa’s limited development of regional value chains is a fundamental structural challenge. Unlike the EU or Asia, where production is integrated across borders, African economies largely operate in isolation. This limits specialisation, reduces economies of scale and weakens participation in global production networks,” he said.
In order to solve this problem, Ajayi-Kadir proposed five measures namely ntegrated/sustainable trade corridors, uniform cross-border industrial ecosystems, consistent AfCFTA enforcement and real-time monitoring, smart borders and digital commerce, a predictable trading environment with the removal of non-tariff barriers, and accessible trade finance.
