It is heartwarming that Nigeria earned N2.85trillion (about $6.6billion) from non-oil exports in ten months, between January and October, 2022. The recent Central Bank of Nigeria Economic Report showed that Nigeria earned $400 million from non-oil exports, compared to $1.97billion and $2.24billion in Q3 and Q2, 2022, respectively. The Q1 2022, non-oil earnings stood at $1.95billion. The October 2022 figure was 3.6 per cent higher than that of September, 2022.
Within the period under review, the major commodities exported are urea (39 per cent), cocoa beans (11.6 percent) and aluminium (7.2 per cent). Overall, receipts from the top five non-oil exports increased by 37.1 per cent to $0.13billion in September, 2022. While this is encouraging, there is still much more to be done in the non-oil sector, as the country is endowed with many agricultural products and solid minerals. Before the discovery of crude oil in commercial quantity, Nigeria depended so much on agricultural products such as palm oil, groundnuts cocoa and rubber. If properly harnessed, the contribution of the non-oil export sector will boost the nation’s revenue, especially now that there is a steep decline in revenue generation.
Last year, the Central Bank of Nigeria and the Bankers’ Committee committed about N500 billion in loans to export-oriented companies to boost non-oil export earnings. This is the time to diversify the economy through the development of the non-oil export sector. In addition, the CBN’s RT200 programme was aimed at raising $200 billion in Foreign Exchange (FX) from non-oil proceeds over the next 4 years.
While oil and gas exports accounted for 80 per cent of total revenue in the second quarter (Q2) 2022, according to figures from the National Bureau of Statistics (NBS), the non-oil export earnings contributed 73 per cent of the revenue in the 2023 Budget. Data from the CBN showed that Nigeria earned $2.59billion from non-oil exports in Q1 2021. In addition, 200 exporters reportedly accounted for 95 per cent of the $4.2billion that the country earned from non-oil exports in 2022.
According to the Nigeria Export Promotion Council (NEPC), non-oil exports generated $2.6billion in from January to June 2022. With improved earnings from the non-oil exports, there is no doubt that Nigeria’s future depends on the development of our agriculture and solid minerals sectors. A recent World Bank report revealed that Nigeria’s non-oil sector would outpace its crude oil earnings. What is needed is to urgently address the factors that hamper the growth of the sector.
Since some Nigerian agricultural products had been rejected abroad on account of quality and packaging, those in charge of the non-oil exports should address this challenge. With enhanced quality and packaging, our agricultural products would no longer be rejected in the international market. Therefore, we call on NEPC officials to ensure that all our non-oil exports are of acceptable quality.
While we laud the improved earnings from non-oil exports, it is worth pointing out that the value of our imports is still increasing. Data from the NBS showed that the value of imports had exceeded that of the exports. For instance, in 2021, total imports stood at N20.84trillion, which was 64.11 per cent higher than the value recorded in 2020, while total exports was valued at N18.91trillion. This was 50.99 per cent higher than the value recorded in 2020. Overall, Nigeria’s imports exceeded exports by N1.94trillion in 2021. Imports of goods and services as percentage of GDP was 16.57 percent, while that of export as percentage of Nigeria’s GDP was 8.83 per cent.
There is need to reverse the trend through the export of more agricultural goods. Sadly, poor logistics, inefficient transportation system, insecurity, inflation and interest rate, have raised the cost of production by over 40 per cent in the manufacturing sector. These issues must also be fully addressed. With efficient logistics, Nigerian exports will fare well in the international market. According to the Nigerian Shippers’ Council, while it takes just $10 to export ginger from Mexico to the USA, it is $100 in Nigeria. This is due to the unpredictable and inefficient nature of the nation’s transportation system. The non-oil export sector can only earn us more revenues if its challenges are promptly and holistically addressed.