Intra-continental flows stuck below 20% despite resource wealth, says Xulu
The Acting Consul General of South Africa in Nigeria, Kgothatso Xulu, has warned that intra-African trade remains below 20percent of total trade flows, highlighting a major gap in the continent’s
The Acting Consul General of South Africa in Nigeria, Kgothatso Xulu, has warned that intra-African trade remains below 20percent of total trade flows, highlighting a major gap in the continent’s economic integration despite its vast resource base.
Speaking on the sideline at the second Nigeria–South Africa Economic Diplomacy Roundtable 2026, Xulu said Africa’s two largest economies—Nigeria and South Africa—account for more than a third of sub-Saharan Africa’s Gross Domestic Products (GDP), positioning them as critical anchors for regional investment and industrial growth.
However, she stressed that this economic weight has yet to translate into deeper trade linkages across the continent.
“When South Africa and Nigeria truly align economically, the impact will not only be bilateral but continental,” Xulu said, urging a shift from dialogue to execution through bankable projects and long-term partnerships.
The urgency comes as the African Continental Free Trade Area gains traction, increasing pressure on leading economies to drive integration through practical cooperation. The agreement is expected to reduce tariffs, improve market access and enable African countries to trade more competitively on their own terms.
Xulu identified telecommunications as a cornerstone of future collaboration, noting its expanding role beyond connectivity into financial inclusion, digital trade and innovation ecosystems. Across Africa, the digital economy is projected to contribute between 5percent and 8percent of GDP in leading markets.
South African firms have already established a strong presence in Nigeria’s digital landscape. MTN Nigeria, a subsidiary of MTN Group, has invested heavily in network infrastructure, fintech platforms and skills development, supporting millions of users and enabling large-scale digital payments.
Industry stakeholders also highlighted collaborations involving Adapt IT, particularly in education and data systems.
The roundtable, held under South Africa Week 2026 and hosted in partnership with MTN Group and the South African Mission in Lagos, brought together policymakers and corporate leaders seeking to align economic diplomacy with private sector priorities.
Participants said such investments underscore the role of private capital in complementing public policy, particularly as Africa’s working-age population is projected to become the world’s largest by 2035.
Despite growing engagement, stakeholders pointed to persistent challenges including regulatory misalignment, limited market access and fragmented logistics systems.
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Xulu said overcoming these barriers requires deliberate coordination among governments, investors and businesses.
“Africa remains one of the most resource-rich continents, but we are not fully leveraging that advantage. We must trade more with each other, build joint ventures and develop solutions that are homegrown,” she said.
She noted that structural constraints—many rooted in colonial-era systems—continue to limit mobility and integration, contributing to low levels of intra-African travel and trade.
Looking ahead, Xulu said the next phase of Nigeria–South Africa relations will depend on expanding cooperation into sectors critical to national development, including agribusiness, renewable energy and industrial processing.
She cited agriculture as a key opportunity, noting that Nigeria’s large output is undermined by poor storage and weak distribution systems, leading to significant post-harvest losses.
South Africa’s expertise in cold-chain logistics, including mobile and solar-powered refrigeration, could help address these gaps while opening new investment pathways.
