James Emejo in Abuja
About 79 per cent of Nigerian businesses currently hold the view that Africa represents an alternative market destination to source their raw material inputs.
But lack of adequate quality standards remained a major challenge to sourcing production inputs within the continent, according to a new study by the Africa International Trade and Commerce Research.
The “National Survey Report on the Impact of COVID-19 on Nigeria Private Sector”, nevertheless, urged the federal government to increase the momentum to ratify the African Continental Free Trade Agreement (AfCFTA) amidst the increasing excitement for intra-African trade.
The report further revealed that 19 per cent of Nigerian businesses already sourced their product and raw material from other African countries while 79 per cent of businesses expressed interest to consider an alternative market from within the continent.
The report noted that, “This level of willingness of Nigerian businesses to trade with other African countries should drive government to maintain momentum on AfCFTA as a mechanism for building long term continental resilience and volatility management, especially for increase intra African trade on pharmaceutical and basic food products.”
It revealed that 54 per cent of businesses surveyed sourced their production inputs (raw, semi and finished) and machinery from Asia, while 43 per cent sought inputs from China.
These production inputs ranges from brand labels for fabric, computer and accessories, solar energy products, agro-inputs and farm machines, medical equipment, pharmaceutical raw materials, cosmetic raw materials among others.
The study added that 89 per cent of business prospects for 2020 had been impacted by the COVID-19 pandemic while 67 per cent of respondents indicated their business prospect had been severely impacted.
Executive Director, Africa International Trade & Commerce Research, Mr. Sand Mba Kalu, told THISDAY in an interview that, “What the study has shown is that the business land scape in Nigeria will change. We will see more businesses relying on technology to deliver efficient services and optimise their operations.
Businesses will have access to limited financial resources.
“That means that the interest to source products and raw materials from alternative markets will increase and an opportunity for Nigeria and Africa to increase productivity will also increase.
“Lots of businesses will adopt cost cutting measures be it in staff salary payments or inventory management
“Any business that cannot adapt to the new situation will not be competitive enough to remain in business and so may die. We therefore advise businesses to refocus,re-strategize and rely on data from research to make informed decisions.”
He added: “The reality of the economic damage already caused by the coronavirus cannot be disputed. The negative effects of the pandemic on Nigeria’s trade outlook for the rest of the year without a critical alternative course of action will be unprecedented.”