Economy
Isolated Trading Blocs Could Trigger 4% GDP Decline for Sub-Saharan Africa—IMF
By Adedapo Adesanya
The International Monetary Fund (IMF) has warned that Sub-Saharan Africa, which includes Nigeria, could stand to lose the most if the world were split into two isolated trading blocs centred around China or the United States and the European Union (EU).
Sub-Saharan Africa refers to countries of the African continent that are not considered part of North Africa.
According to estimates released on Monday, sub-Saharan African economies could experience a permanent decline of up to 4 per cent of the real gross domestic product after 10 years, which is larger than what many countries experienced during the Global Financial Crisis of 2008-09.
It noted that economic and trade alliances with new economic partners, predominantly China, have benefited the region but have also made countries reliant on imports of food and energy more susceptible to global shocks, including disruptions from the surge in trade restrictions following Russia’s invasion of Ukraine.
“If geopolitical tensions were to escalate, countries could be hit by higher import prices or even lose access to key export markets—about half of the region’s value of international trade could be impacted,” the IMF said.
The lender warned that losses could be compounded if capital flows between trade blocs were cut off due to geopolitical tensions.
“The region could lose an estimated $10 billion of foreign direct investment (FDI) and official development assistance inflows, which is about half a per cent of GDP a year (based on an average 2017–19 estimate). The reduction in FDI, in the long run, could also hinder much-needed technology transfer.”
The IMF noted that the countries looking to restructure their debt, deepening geoeconomic fragmentation could also worsen coordination problems among creditors.
It advocated the need for strategic decoupling, saying the region would fare better if only the US/EU cut ties with Russia and sub-Saharan African countries continued to trade freely.
In this scenario, trade flows would be diverted towards the rest of the world, creating opportunities for new partnerships and possibly boosting intra-regional trade.
This is “because some African countries benefit from access to new export markets and cheaper imports, the region as a whole would not incur a GDP loss. Oil exporters supplying energy to Europe could even gain.”
To better manage shocks, IMF advised that countries need to build resilience. “This can be done by strengthening the ongoing regional trade integration under the African Continental Free Trade Area, which will require reducing tariff and non-tariff trade barriers, strengthening efficiency in customs, leveraging digitalization, and closing the infrastructure gaps.
“Deepening domestic financial markets can also broaden sources of financing and lower the volatility associated with relying too much on foreign inflows,” the IMF noted.
It also noted that to take advantage of the potential shifts in trade and FDI flows, countries in the region can try to identify and nurture sectors that may benefit from trade diversion, “for example, energy. Commodity exporters in the region could potentially displace much of Russia’s energy market share in Europe.”
“Countries can also rely on trade promotion agencies to help identify potential opportunities, build the necessary skills and capacity for exports, and eventually re-orient production to take advantage of new trade flows. Improving the business environment, such as by lowering entry, regulatory, and tax barriers, could also help.”
The lender also said multilateral institutions would need to continue to facilitate dialogue among nations to promote economic integration and cooperation.
By Adedapo Adesanya
The Nigeria Customs Service (NCS) is seeking a reduction in import duty exemptions, which rose to N34 trillion, limiting its ability to increase its revenue generation threshold.
The Comptroller-General of the Customs Service, Mr Adewale Adeniyi, disclosed that the value of import duty exemption certificate approvals increased to that level in 2025, describing the policy as one of the major factors restricting its revenue generation.
At an investigative session of the Senate Committee on Finance with revenue-generating agencies in Abuja on Monday, Mr Adeniyi explained that government fiscal policies have continued to impact the revenue-generating capacity of the Customs Service, both positively and negatively.
“The NCS would have generated significantly higher revenue over the years if not for government-approved import duty waivers and other external factors affecting collections,” he said.
He added that the Import Duty Exemption Certificate scheme, introduced in March 2020, accounted for about N34 trillion in approvals in 2025, with nearly 60 per cent covering duty-free importation of military hardware due to Nigeria’s prevailing security challenges.
Other government-backed duty waivers, he noted, covered the importation of Compressed Natural Gas (CNG), electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery and manufacturing inputs, as well as food import intervention programmes.
While acknowledging the impact of the waivers on Customs revenue, Mr Adeniyi argued that fiscal policy should not be assessed solely on the basis of revenue generation but also on its broader economic and social objectives.
He, however, urged the federal government to establish stronger monitoring mechanisms to ensure beneficiaries of duty waivers deliver the intended economic outcomes, including lower consumer prices, increased local production and improved healthcare access.
The committee also expressed displeasure over the absence of several heads of government agencies invited to the hearing, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF), and the Federal Medical Centre (FMC), Jabi.
The Chairman of the Senate Committee on Finance, Mr Sani Musa, warned that the affected chief executives must appear at the committee’s next sitting or face severe sanctions under the Senate’s rules.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
