• Business - Economy
  • Updated: April 09, 2024

World Bank says trade cost in Nigeria five times higher than US

World Bank says trade cost in Nigeria five times higher than

Insecurity, higher transportation costs, topography and poor road infrastructure have made the cost of trade in Nigeria and Ethiopia four to five times higher than what is obtained in the United States, according to the World Bank.

The global lender revealed that market distortions across Africa result in price differences between imported food and non-food products, indicating a lack of integration across African markets. 

It stated, “Similarly, access to product markets is constrained, which prevents firms and farms from scaling up their production.

“In particular, the lack of connectivity and market integration means that markets are segmented, allowing firms or farms with market power to capture benefits, contributing to income inequality.

“Studies from the Africa region consistently find spatial differences in prices of imported goods (food and non-food) as well as nontraded agricultural staples, indicating that markets are not well-integrated, and the retail prices of products are affected by distance.

“For instance, trade costs are four to five times higher in Ethiopia and Nigeria than in the United States, due to poor road infrastructure, low competition in the transportation sector, topography.” 

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