The impact of Аfrican continental free trade agreement (AFCFTA) implementation on small and medium business in Nigeria

Abstract

The study assessed the impact of the implementation of the African Continental Free Trade Agreement (AfCFTA) on Nigerian SMEs. Three goals and research agendas have been formulated to guide the research. The free trade theory proposed by David Ricardo, Adams Smith, and David Hume (1971) has been used to relate the impact of his AfCTA on small and medium enterprises in Nigeria. The study used a descriptive survey design of 1,766 SMEs registered on the Lagos State Chamber of Commerce platform. Using random sampling, I selected a sample size of 400 respondents (400) from the study area. A thirteen-item (13) structured questionnaire was used to collect data from the respondents. Completed specimens of instruments were pooled and analyzed using the mean and standard deviation. The result among other things states that reduced cost of material and inputs, increase production capacity, reduction in the prices of goods and services and reductions in the cost of machinery are the positive impacts of AfCFTA implementation on SMEs in Nigeria and increase foreign competition with local goods reduction in the demand of goods and services of local goods, and cheaper goods compete with local products. neglect of other important factors affecting SMEs and the promotion of substandard products and dumping is the perceived threat of AfCFTA implementation on SMEs in Nigeria. The study thus recommended that individuals and SMEs in Nigeria should look inwards and try to change the mindset of patronizing products and services from non-African countries and that respective Governments including Nigeria should see to it that policies geared towards effective implementation of the trade agreement should not just be formulated but also be set in motion. 

Keywords: AfCFTA, SMEs, Nigeria, international trade, economic development.