Evaluating The Implications and Prospects of Nigeria's Participation in the African Continental Free Trade Agreement (AfCFTA): An Analysis of Trade Gains and Opportunities

Abstract

Challenged by slow growth and development, there has been an increased need and search for avenues that will bring accelerated development to the African continent. Such attemptsinclude the African Continental Free Trade Agreement (AfCFTA) entered into by some African countries including Nigeria. The AfCFTA promises benefits for regional development through individual benefits to member countries from trade. The study, thus, evaluated Nigeria's potential for trade gains from the AfCFTA. The gravity model of trade was applied to analyze data about the variable obtained for Nigeria and some African states. The majorfindings of the study show that the volume of Nigeria's GPD, the distance between Nigeria and the trading partners, Nigeria's population, the per capita income in the region, the degree of trade openness, and sharing a colonial link with a country are capable of increasing trade flows to Nigeria, thus increasing her chances of gaining from the AfCFTA. Other variables like the GDP of the trading partners, their population, and being a member of AfCFTA have the potential of lowing trade flow to Nigeria, all things being equal. It was concluded that Nigeria stands to benefit from hertrade with these countriesin the African continental free trade arena, all things being equal. Foreign trade policy actions should therefore be geared toward increased trade between these member states.