Macroeconomic Policy Implications of African Continental Free Trade Area (AfCFTA) for Nigeri

This research analysed the macroeconomic policy implications of the African Continental Free Trade Area (AfCFTA) for Nigeria from 2019 to 2023. A quantitative study methodology was utilised, employing regression analysis to examine the association between AfCFTA and essential macroeconomic variables. The study's findings indicated that AfCFTA significantly enhanced Nigeria’s GDP and trade balance, implying that greater trade liberalisation might foster economic growth and elevate Nigeria’s foreign trade performance. The study revealed no significant correlation between AfCFTA and inflation, suggesting that inflation in Nigeria is predominantly affected by local factors, including fiscal and monetary policy, rather than external trade agreements. The regression model successfully passed essential diagnostic tests for multicollinearity, heteroskedasticity, and autocorrelation, hence affirming the dependability of the results. The study concludes that Nigeria can benefit from AfCFTA through economic growth and trade expansion; however, the country must implement suitable macroeconomic policies to tackle current challenges, including infrastructure deficits and industry preparedness, to fully leverage the agreement's potential. The study advocated for the enhancement of trade facilitation infrastructure, the support of export-oriented industries, the promotion of public-private partnerships, the maintenance of fiscal discipline to control inflation, and the improvement of the overall business environment to ensure Nigeria's competitiveness in the AfCFTA market. These strategies will empower Nigeria to optimise the advantages of AfCFTA while alleviating potential risks and challenges linked to heightened trade liberalisation.