Trade deals between Nigeria and the United State has maintained an equilibrium as the annual trade value between the two countries hit $10 billion equivalent to N16.415 trillion in local term.
The Consul-General of the United States Consulate in Lagos, Nigeria, Will Stevens, disclosed this on Monday in Lagos while speaking at the opening ceremony of the African Growth and Opportunity Act (AGOA) workshop with Proper Africa.
The workshop aims to equip export-ready Nigerian businesses, Nigeria Customs Service, trade officials, and relevant stakeholders with the necessary knowledge and skills to maximise the benefits of AGOA and improve its utilisation in Nigeria.
Steven said the US and Nigeria have an incredibly balanced trade relationship.
“The United States and Nigeria have an incredibly balanced trade relationship almost 50-50 which means we are equal partners. So it’s almost a $10 billion yearly trade relationship, about $5bn from the US to Nigeria and $5 billion from Nigeria to the US. But $3.8 billion of that in AGOA is oil-related products and we want to see more,” he said.
He stated that despite the two countries’ balanced trade relationship, most of the trade under AGOA between them comes from the oil and gas sector.
According to him, the oil and gas sector represents less than 8% of Nigeria’s Gross Domestic Product (GDP), “so where is the rest of your economic activity, and why is it not being exported to the United States?”
Steven explained that AGOA gives exporters unfettered access to the US market, which represents 27% of the global economy, stressing that the State of California is the third largest economy in the world.
“I think Texas is the seventh largest economy, and New York is like the ninth largest economy,” he said
“So when you get access to that US Market duty-free, sort of a unilateral trade concession that we are giving, you are getting access to a quarter of the global economy. So if you can get one per cent market shares in New York State, that’s bigger than almost the entire economy of Nigeria,” the consular-general explained.
He mentioned that the US is committed to the AGOA initiative adding that one of the good things about Prosper Africa is it brings together the entire U.S. government.
Steven emphasized that Prosper Africa helps grow bilateral trade and investment between Africa and the United States.
“It’s not just us selling our stuff to you but helping you sell your stuff to us. That’s the cool thing about Prosper,” he mentioned.
“We are focused on both parts. We know that as you can enter our market and create exports, you bring in hard currency, you raise the standards of the products that you are developing because if you can succeed in the U.S. market, you can succeed in the Asian market, and you can succeed in the European market. So, please, think about how you can bring your business to the United States, how you can use AGOA, and make connections with each other,” Steven averred.
Earlier, the Deputy US Trade Representative for Africa, Osvaldo Gomez-Martinez, explained that AGOA offers a great opportunity for African nations, including Nigeria, to access the U.S. market duty-free.
He explained that as one of the largest economies in Africa with a diverse and rapidly growing private sector, Nigeria has the potential to significantly increase its exports to the United States.
“While the oil sector has long dominated trade between our nations, accounting for about 98% of Nigeria’s $3.8 billion exports under AGOA, the future lies in expanding beyond this sector and embracing the full spectrum of AGOA eligible products,” he said.
Gomez-Martinez, advised that diversifying Nigeria’s export base away from oil and by extension expanding its sources of other inflows is, extremely important if Nigeria is to safeguard its economy from the volatility it currently faces.
He highlighted that the manufacturing and agricultural sectors represent an immense on-topic potential in Nigeria to diversify its export base under AGOA.
“Nigeria producers and manufacturers have a unique opportunity to gain access to the U.S. market duty-free again, giving their products a competitive edge,” Gomez-Martinez advised.
He further advised that realizing this potential requires satisfying requirements such as compliance with U.S. regulations, meeting market standards, and addressing logistical challenges.
Gomez-Martinez maintained that the US remains committed to supporting Nigeria’s economic growth towards achieving the shared goals of increasing two-way trade, creating good jobs, and fostering greater prosperity for the nations.
“It’s essential that we build sustainable long-term trade relationships across various sectors, specifically those that have not traditionally been the focus of Nigerian U.S. trade,” he said.
The Director-General and Chief Executive Officer of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr Charles Odii, admitted that even though Small and Medium Enterprises are facing some challenges, they are still performing at their best.
“Right now they have access to resources in terms of financial resources. I want to thank the President for earmarking N200 billion for enterprises in Nigeria, N75 billion for large enterprises, N75 billion for small businesses, and N50 billion in terms of grants for nano-businesses.
“If you ask small businesses, in the past, government regulations have been a big, big, big factor for them not to grow. And we are removing all of that. We have set up the National Council of SMEs that is helping to facilitate the ease of doing business for our small businesses across Nigeria,” he said.
AGOA provides eligible sub-Saharan African countries with duty-free access to the US market for over 1,800 products, in addition to the more than 5,000 products that are eligible for duty-free access under the Generalized System of Preferences program.
Prosper Africa is a US Presidential-level national security initiative to scale two-way trade and investment between the United States and Africa to transformative and strategic levels. Prosper Africa works to scale trade at transformative levels between the US and African countries to promote global supply chain security, better integrate African producers and suppliers into global markets including the US, create jobs, and support inclusive economic growth.
