For most investors and exporters, trade agreements matter only when they start changing costs, timelines, and risk. Until then, they remain political documents.
Nigeria’s engagement with the African Continental Free Trade Area largely fell into the second category for years. Despite signing and ratifying the agreement, uncertainty persisted around tariffs, services access, logistics, and enforcement. The dominant question was not what AfCFTA promised, but whether Africa’s largest economy would operationalise it in ways that altered commercial realities.
The Nigeria AfCFTA Achievements Report 2025, published by the Federal Ministry of Industry, Trade and Investment (FMITI), suggests that this inflection 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 documenting actions that directly affect freight costs, market access for services, and the ability of digital firms to scale across borders.
This matters less as a policy milestone than as a market signal. Tariff schedules have moved into force. Logistics interventions are lowering trade costs on specific routes. Digital trade rules are no longer theoretical. Together, these shifts begin to expose which firms are positioned to compete, which regions are ready to export, and which business models will struggle under preferential openness.
Earlier coverage, including analyses by Finance in Africa, framed Nigeria’s AfCFTA approach as a bet on future expansion. The evidence emerging in 2025 points to something more consequential: execution has begun, and its effects are already being felt unevenly across sectors, corridors, and balance sheets.
Logistics as Nigeria’s AfCFTA stress test
For all the ambition embedded in AfCFTA, its success will ultimately be judged on costs. Tariffs matter, but logistics determine whether trade is profitable at all. Nigeria’s most consequential AfCFTA intervention in 2025 has therefore been its least rhetorical: the creation of a functioning export corridor that lowers freight costs.
Through a partnership with Uganda Airlines and the United Nations Development Programme (UNDP), Nigeria launched a dedicated air cargo corridor to East and Southern Africa, offering freight rates 50 to 75% below prevailing market prices, according to the AfCFTA implementation review. For exporters of agro-processed goods, cosmetics, textiles, and other time-sensitive products, this shift is material.
Lower freight costs do more than improve margins. They shorten cash conversion cycles, reduce working capital pressure, and allow Nigerian exporters to price more competitively against suppliers from Kenya, Egypt, and South Africa. For investors backing export-oriented firms, logistics efficiency often matters more than tariff preferences, particularly in fragmented African markets.
Still, industry practitioners caution that targeted corridors do not eliminate systemic constraints. Dr Segun Musa, vice president of the National Association of Government-Approved Freight Forwarders, has argued that, without sustained investment in ports, customs automation, and inland connectivity, early gains risk being isolated rather than scalable.
“A lack of seriousness and practical engagement is a missed opportunity for Nigeria to leverage the agreement,” highlighting Nigeria’s stark deficiencies in manufacturing, industrialisation, and infrastructure.
The air cargo corridor is timely, especially because complaints about the deficiency of Nigeria’s logistics infrastructure have been rather loud. Dr. Farinto Kayode Collins, a maritime consultant, has bemoaned the state of Nigeria’s maritime sector, emphasising the significance of logistical efficiency.
“Discriminatory freight charges are often imposed by shipping agents, which are higher for Nigerian businesses compared to foreign counterparts.” He further established that Nigeria’s over-reliance on road transport is a major obstacle to efficient intra-African trade, thereby inhibiting efficient logistics.
The corridor also reveals a broader strategy. Rather than attempting to liberalise everything at once, Nigeria is targeting specific routes and sectors where trade volumes can scale quickly. Complementary to the corridor, the FMITI’s market intelligence tools focus narrowly on three product categories across 13 East and Southern African markets, reducing information risk for firms entering unfamiliar territories.
For capital, this is a more credible signal than trade diplomacy. It suggests Nigeria understands that AfCFTA’s value will be captured not by firms that wait for full continental harmonisation, but by those that move early into routes where costs and demand are already aligned.
Who loses as Nigeria tightens AfCFTA execution
Execution of the AfCFTA creates both opportunity and pressure. As Nigeria applies preferential tariffs, firms that have long relied on protection face sharper competition from lower-cost producers elsewhere on the continent.
World Bank manufacturing data shows that energy costs account for up to 40% of total production expenses in Nigeria, compared with 15–20% in Morocco and Egypt, where electricity supply is more reliable.
Therefore, the firms most at risk are manufacturers that rely heavily on diesel generators, inefficient logistics, and import-dependent inputs. Their costs are already high. AfCFTA does not create those problems; it makes them visible.
The impact is that some Nigerian companies may lose market share, cut production, or exit altogether unless costs fall. In the short term, this could mean job losses in inefficient factories. In the long term, it creates pressure for reform: cheaper power, better infrastructure, and more competitive production.
This pattern is not unique to Nigeria. After Kenya reduced regional trade barriers under EAC protocols, import competition accelerated consolidation in food processing and light manufacturing, with smaller firms losing market share to better-capitalised regional players. Similarly, Ghana’s consumer goods market has seen margin compression as imports from Côte d’Ivoire and Senegal expanded following tariff reductions.
Speaking at the 2025 Citi Business Forum, Mavis Owusu-Gyamfi, CEO of the African Centre for Economic Transformation (ACET), AfCFTA’s biggest risk lies in uneven capacity. “Across the continent, weak logistics networks, underdeveloped transport infrastructure, and inconsistent trade policies continue to impede the seamless flow of goods. The ambition to harmonize rules across 54 diverse economies is a monumental task,” she noted.
Within Nigeria, AfCFTA execution is also likely to be geographically uneven. Export readiness remains concentrated around Lagos, Ogun, and a handful of logistics corridors. According to national trade data, fewer than 10 states account for the majority of Nigeria’s non-oil exports, suggesting firms outside these hubs risk exclusion as trade flows deepen.
For investors, execution raises a clear implication: AfCFTA will reward efficiency and scale, while accelerating shakeouts among high-cost producers and poorly positioned distributors.
Execution changes the calculus
Nigeria’s AfCFTA execution does not eliminate risk. Power supply constraints, currency volatility, and infrastructure gaps remain binding. But it changes the terms of engagement.
For investors, the critical uncertainty is no longer whether Nigeria will implement AfCFTA rules, but who is positioned to benefit from them. Firms with export-ready production, regional logistics access, and regulatory literacy will benefit first. Others may struggle as competition intensifies and protection recedes.
Nigeria’s AfCFTA strategy in 2025 marks a shift from political commitment to economic consequence. The returns will not be evenly distributed, and the timeline will not be uniform. But for the first time since AfCFTA entered into force, Nigeria’s participation is beginning to shape costs, incentives, and competitive dynamics in ways markets can price.
That, more than any milestone or communiqué, is what execution looks like.
