The federal government said the African Continental Free Trade Area (AfCFTA) is expected to raise the income level of about 68 million Nigerians, thereby, leading to poverty reduction and economic growth.
The vice president, Prof. Yemi Osinbajo who spoke at the 47th African Insurance Organisation (AIO) Conference, hosted by Nigeria in Lagos, said the free trade agreement presents a major opportunity for African countries, especially Nigeria.
He said, “by some estimates, if we get it right, we can bring several millions out of extreme poverty and raise the incomes of 68 million others who live on less than $5.50 per day. There are potential income gains of up to $450 billion, and just cutting red tape and simplifying customs procedures alone could drive up to $250billion of that sum.”
Explaining the implications of this for the insurance industry in Africa, he noted that, more trade in goods will mean greater need for insurance services; brokers, in particular, should expect a boom; demand for trade facilitation services will rise, adding that companies that already have market presence in other African countries, even if by collaboration, will benefit more than others.
While expecting to see more well capitalised insurance providers from other African countries coming to compete in the Nigerian market, he added that, “services can be set up faster than manufacturing plants.
“Nigerian financial services companies, especially banks, are already in many African Countries, the likes of Zenith, Access, UBA. How about Insurance companies? We should now be looking at developing home-grown international African insurance conglomerates. The time is now.”