The Effect of Regional Trade Agreements on the Profitability of Nigerian Textile Export Firms

This study examines the effect of regional trade agreements, specifically the African Continental Free Trade Area and the ECOWAS Trade Liberalisation Scheme, on the profitability of Nigerian textile export firms. Nigeria's textile industry, historically one of the country's major manufacturing employers, has experienced significant decline over recent decades due to import competition, high energy costs, and infrastructure deficits. Yet the AfCFTA presents a renewed opportunity for Nigerian textile exporters to access a tariff-reduced continental market. The research employs a mixed-methods design combining financial performance analysis of 20 textile export firms drawn from the Manufacturers Association of Nigeria database with semi-structured interviews of company directors and export managers. Return on assets, profit margins, and export revenue trends are analysed for the period 2020 to 2024. The theoretical framework draws on the gravity model of trade and the new trade theory of increasing returns to scale. The study evaluates how preferential tariff access under AfCFTA has affected export revenue, market diversification, and capacity utilisation among sampled firms. It also examines compliance costs associated with rules of origin requirements, which represent a critical determinant of whether Nigerian firms can benefit from preferential access provisions. Findings are expected to indicate that profit improvements have been limited by infrastructure constraints and rules of origin compliance burdens, diluting the theoretical benefits of tariff liberalisation. Recommendations focus on export infrastructure investment and simplified rules of origin protocols for African textile trade. Keywords: regional trade agreements, textile exports, AfCFTA, profitability, Nigerian firms