Nigeria’s AfCFTA execution is finally lowering cross-border trade costs

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For investors and exporters, trade agreements only become meaningful when they begin to affect costs, timelines, and risk. Until then, they remain largely political commitments.

For several years, Nigeria’s engagement with the African Continental Free Trade Area (AfCFTA) largely fell into that category. Although the country signed and ratified the agreement early, uncertainty persisted around tariffs, market access for services, logistics efficiency, and enforcement mechanisms. The central question was not what AfCFTA promised on paper, but whether Africa’s largest economy would operationalise it in ways that materially altered commercial outcomes.

The Nigeria AfCFTA Achievements Report 2025, published by the Federal Ministry of Industry, Trade and Investment (FMITI), suggests that this turning point may have arrived.

As the first AfCFTA State Party to publish a five-year implementation review, Nigeria is not merely reporting compliance. It is outlining concrete actions that are already influencing freight costs, access to regional markets, and the ability of firms—particularly digital and service-based enterprises—to scale across borders.

More than a policy milestone, this represents a market signal. Tariff schedules have entered into force, logistics interventions are reducing trade costs on specific corridors, and digital trade rules are moving from theory to practice. Together, these shifts are beginning to reveal which firms are competitive, which regions are export-ready, and which business models may struggle under increased continental openness.

Earlier commentary framed Nigeria’s AfCFTA participation as a long-term bet on future integration. Developments in 2025 point to something more immediate: execution has begun, and its effects are already being felt—unevenly—across sectors, trade routes, and balance sheets.

While tariffs remain important, the commercial success of AfCFTA ultimately hinges on logistics. Trade is only viable when goods can move efficiently and at competitive cost.

In this context, Nigeria’s most significant AfCFTA-related intervention in 2025 has been practical rather than rhetorical: the establishment of a functioning export logistics corridor designed to reduce freight costs.

Through a partnership involving Uganda Airlines and the United Nations Development Programme (UNDP), Nigeria launched a dedicated air cargo corridor connecting the country to East and Southern Africa. According to the AfCFTA implementation review, the corridor offers freight rates between 50 and 75 percent below prevailing market prices.

For exporters of agro-processed goods, cosmetics, textiles, and other time-sensitive products, this reduction is commercially significant. Lower freight costs improve margins, shorten cash-conversion cycles, reduce working-capital pressure, and allow Nigerian products to compete more effectively with suppliers from Kenya, Egypt, and South Africa.

For investors backing export-oriented firms, logistics efficiency often outweighs tariff preferences—particularly in fragmented African markets where transport costs frequently determine profitability.

That said, industry stakeholders caution that isolated corridors cannot resolve systemic constraints. Dr. Segun Musa, Vice President of the National Association of Government-Approved Freight Forwarders, has noted that without sustained investment in ports, customs automation, and inland connectivity, early gains may remain limited in scale.

Similarly, maritime consultant Dr. Farinto Kayode Collins has highlighted persistent challenges within Nigeria’s maritime sector, including discriminatory freight charges and an over-reliance on road transport—factors that continue to hinder efficient intra-African trade.

Nevertheless, the corridor reflects a deliberate strategy. Rather than attempting comprehensive liberalisation all at once, Nigeria is targeting specific routes and sectors where trade volumes can scale quickly. Complementary FMITI market-intelligence tools focus on select product categories across 13 East and Southern African markets, reducing information asymmetry for firms entering new territories.

For capital markets, this targeted execution sends a stronger signal than broad trade diplomacy. It suggests a recognition that AfCFTA’s value will be captured first by firms that move early into aligned routes where demand, costs, and logistics converge.