Question

It would make sense for South Africa to trade with Nigeria, given the new African Continental Free Trade Agreement (AfrCFTA), because the two countries offer large export markets for agricultural products.

Is Nigeria likely to be in South Africa’s top five trading partner list by exports in the agricultural sector, with the AfrCFTA in place? Provide a well-substantiated answer.

Answer 1

Trade between SA and Nigeria :-

90% of Nigerian Exports include trade of crude oil which is an essential commodity that cannot be imported from anywhere else .Thus this agreement has proved to be extremely beneficial for South Africa.

However for Nigeria it is not the similar case as most of the goods that are been imported from South Africa can we easily available from other countries . Above that Nigeria have concerns regarding South Africa's unfair trade practices such as dumping where it was the sales of its exports below the cost of production to gain and fair market share that was severely hamper Nigerian local Markets and manufacturers.

Can Nigeria become one of the top trading partners :-

As per the statistics Nigeria imports mainly consists of 27% of industrial supplies, 23% of capital goods 17% of food and beverage, few 14% of transport equipment and parts and 12% of consumer goods .It must be noted that South Africa is mainly known for its agricultural goods and Nigerian demand for agricultural goods is very less .It only imports 7% of the import requirement from Africa therefore even after the agreement is signed South Africa is likely to gain more as compared to Nigeria.