On 9 October 2025 Ethiopia shipped its first duty-free consignments under the African Continental Free Trade Area (AfCFTA) to Kenya, South Africa, and Somalia. Using Ethiopian Airlines and the Moyale corridor, the initial export basket — fresh produce (meat, fruits, vegetables), staples (coffee, pulses, oilseeds), and processed/textile goods — signals a deliberate push to access a 1.3 billion-person market with lower tariffs and fewer barriers. Ethiopia’s arrangement extends duty-free access to 24 African countries, strengthens regional supply chains, supports MSMEs and youth-led businesses, and provides a practical model for other African states.

Key Benefits from Ethiopia’s Approach

• Market access: Preferential, duty-free entry to 24 African markets under AfCFTA improves scale opportunities for exporters.
• Economic diversification and growth: Expanded opportunities for MSMEs, value-added manufacturing and youth entrepreneurship.
• Improved logistics and reduced spoilage: Coordinated transport (air and corridor routes) and shortened value chains.
• Regional integration and cooperation: Closer cross-border ties, shared standards, and business linkages.
• Policy signal for peers: Offers a template for navigating domestic policy choices amid changing incentives — for example, Nigeria’s 2025 tax act, which reduced some incentives and made state and local taxes applicable in free-trade zones.

Lessons and Opportunities for Nigeria

Nigeria can accelerate AfCFTA gains by adopting a coherent mix of policy, infrastructure, and institutional reforms:

1. Diversify Exports

• Reduce dependence on crude oil by scaling agro-processing, solid minerals value addition, textiles, pharmaceuticals, and light manufacturing.
• Support cluster development around comparative advantages (e.g., agro-processing in the North, textiles in the Southwest).

2. Improve Transport and Logistics Infrastructure

• Prioritise upgrades to strategic corridors (for example, Lagos–Abidjan), modernise ports, and invest in multimodal links that lower cost and delivery times.
• Expand air cargo capacity and route connectivity to East and Southern Africa.

3. Strengthen Support for SMEs

• Improve access to affordable finance — including targeted facilities that avoid crowding out private credit — and reduce the cost of utilities and logistics for small firms.
• Build stronger links between farmers and processors to raise value capture locally.

4. Simplify and Digitise Trade Processes

• Fully digitise customs and clearance processes, harmonise regulations across MDAs (ministries, departments and agencies), and deepen integration with PAPSS (Pan-African Payment and Settlement System) to reduce transaction costs and forex frictions.

5. Promote Regional Value Chains

• Use bilateral and regional partnerships to build complementary value chains (for example, raw cocoa processing with Ghana; textile inputs with Benin) and incentivise local content in manufacturing.

6. Strengthen Governance and Policy Consistency

• Ensure transparency and predictable application of AfCFTA protocols at federal and subnational levels.
• Revisit fiscal measures that could undermine competitiveness — for instance, consider the effects of the 2025 tax act that reduced incentives and introduced subnational taxes for free-trade zones — and align tax policy with export promotion objectives.

Tangible Catalysts Already in Play

• The Arise industrial textile investment in Ogun State, linked to polypropylene feedstock from the Dangote Refinery, can be transformative for local textiles if supported by consistent policy and logistics.
• Nigeria’s Exports Air Cargo Corridor to East and Southern Africa and recent cargo rate cuts (50–75%) are practical steps that should be scaled.
• Afreximbank’s pledged support (US$40 billion) for AfCFTA implementation is a major financing lever Nigeria can tap into, conditional on viable projects and reform commitments.

Conclusion — Recommended Priorities

1. Fast-track digital customs and PAPSS integration.
2. Remove policy and fiscal bottlenecks that increase costs for exporters (including reviewing subnational charges in FTZs).
3. Mobilise Afreximbank and other concessional finance for targeted infrastructure and SME programmes.
4. Build export value chains around existing industrial projects (e.g., Dangote feedstocks, Arise textile park).

The Arise Integrated Industrial Platforms (ARISE IIP) has invested $400 million in the Industrial Platform Remo Free Zone (IPRFZ) in Sagamu, Ogun State, Nigeria. This public-private partnership aims to attract local and foreign investments, boost the state's economy, and create jobs. The free zone spans approximately 5,000 hectares and will include facilities like power and gas supply, wide roads, green spaces, a water treatment plant, hospitals, and security services. The project is structured over 45 years in multiple phases, with the Special Agro-Processing Zone already underway.

The IPRFZ is expected to strengthen regional supply chains, support MSMEs, and enhance Nigeria’s participation in the African Continental Free Trade Area (AfCFTA).

Ethiopia’s early AfCFTA moves show that with coordinated logistics, supportive policy and targeted investments, countries can begin to convert market access into tangible exports and jobs. Nigeria has the scale and resources to do the same — the task is to align incentives, close infrastructure gaps and make trade facilitation real on the ground.

By Alliance for Economic Research and Ethics Ltd (GTE).