AfCFTA’s $1 Billion, Cabotage $700 and Nigeria’s Economic Growth

Close to $2billion injected into the Nigerian Economy could Stimulate Growth

The Federal government has announced the availability of a $1billion African Continental Free Trade Area (AfCFTA) facility to improve trade facilitation, export competitiveness and market access under the AfCFTA.

According to the minister for Industry, Trade and Investment, Dr. Jumoke Oduwole, the fund is a demonstration    of federal government’s commitment to accelerating Nigeria’s export-led growth agenda under the African Continental Free Trade Area.

She hinted that FG is intensifying efforts to improve trade facilitation, export competitiveness and market access under the African Continental Free Trade Area (AfCFTA).

The minister said  government was strengthening institutions and businesses to maximize opportunities under the AfCFTA agreement she told stakeholders that Nigeria was also advancing reforms to enhance participation in the continental trade agreement.

Dr. Oduwole revealed that the $1b funding  initiative is targeted at exporters, Micro, Medium and Small Enterprises (MSMEs), women-owned businesses and youth entrepreneurs even as she described AfCFTA as one of Africa’s most significant economic integration projects.

According to minister Oduwole “‎The Federal Government has reaffirmed its commitment to accelerating Nigeria’s export-led growth agenda under the African Continental Free Trade Area, unveiling opportunities for businesses to access a US$1 billion AfCFTA Adjustment Fund Credit Facility aimed at boosting production, competitiveness, and intra-African trade.”

National Coordinator and Chief Executive Officer of the Nigeria AfCFTA Coordination Office, Patience Okala, gave insight on the $1b AfCfta when she said “The $1bn AfCFTA Adjustment Fund Credit Facility is targeted at large African businesses with a minimum financing capacity of $10m”

Matter Arising

The requirement of $10m capital base seems  almost unattainable. How many Nigerian companies have that capacity?

Is the $1b AFCFTA fund by the Nigerian government  available to all African companies or Nigerian owned companies only?

Is the Fund interest free? If not, what is the percentage interest payable by beneficiaries?

We look forward to having a list of beneficiaries and names of their companies as we engage with the ministry.

 

Cabotage

The Cabotage Vessel Finance Fund, CVFF, has been in implementation from 2004. To date, the Fund is put at $700m.

Minister after minister, disbursement promises have been made and abandoned even as Nigerian ship owners struggle and wobble in rendering shipping services.

 

A disbursement portal was launched earlier this year to herald empowering indigenous ship owners with the fund to enhance fleet expansion.

Minister of the Marine and Blue Economy, Dr. Adegboyega Oyetola speaking during the portal launch said “This is deliberate and strategic step in repositioning Nigeria’s maritime sector as a central pillar of national development.”

Oyetola added that “The CVFF is structured as a strategic development instrument. By facilitating access to competitive vessel financing for indigenous operators, we hope to reduce reliance on foreign-flagged vessels in our coastal trade, improve retention of value within the domestic economy, create employment opportunities for Nigerian seafarers, and stimulate growth in allied sectors such as shipbuilding, ship repair, and maritime services”

One government, same country, different ministries, separate ministers, one agenda-improved economy.

 

Efforts to get further clarification from the ministry of Industry, Trade and Investment are ongoing as Cabotage Disbursement discussions continues; hopefully, the injection of these funds into the Nigerian economy should stimulate economic growth by boosting businesses.