The need to diversify the economy and boost foreign exchange inflows through the promotion of non-oil exports has not been more urgent than now. It is in this regard that we welcome the current plan by the Central Bank of Nigeria (CBN) to rally commercial banks to support indigenous companies to expand forex earnings through non-oil exports. To ensure the success of the initiative, the banks should come out with a well-packaged credit facility for local firms at low interest rates, preferably at single digit.

Speaking at a recent inspection of projects funded by some banks in Lagos, the Head, Legal Services Department of CBN, Mr.Kofo Salam-Alada, stated that the apex bank would solicit the support of commercial banks to increase export earnings to about $200billion between now and the next five years. The idea is in line with the apex bank’s policy, “RT200 FX,” which was launched on February 10, 2022. According to the apex bank, the main objective of the programme is to use the non-oil export to bridge the nation’s widening forex gap and boost external reserves. The initiative is likely to work provided that the banks will lend their support through adequate financing.

Available statistics show that the nation’s revenue from crude oil sales is no longer enough to cater for its growing needs. With the decline in crude oil production as a result of operational problems such as oil theft, lack of maintenance and pipeline vandalism, supply and freight challenges, the opportunity to benefit from the present high oil prices in the international market is little. But with the coming of the RT200 FX policy, it is estimated that activities in the non-oil sector will boost Fx supply to about $40billion annually.

Therefore, it has become necessary for the banks to adequately support the indigenous companies and boost the non-oil exports, especially in manufacturing and agriculture, with focus on five priority areas. The priority areas include value added export facility, non-oil commodity expansion facility, non-oil FX rebate scheme, dedicated non-oil export terminal and biannual non-oil export summit.

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Besides, the CBN should extend loan facilities to upscale the nation’s production of value-added products that will boost non-oil exports. To ensure the success of the initiative, there is need to stabilise the value of the naira. The present wide gap between the national currency and other major foreign currencies does not help production costs for export. Emphasis should be more on production rather than on consumption.  On their part, we urge the indigenous companies to produce quality, well-packaged goods for export that will meet international market standards.  Let the Federal Government reposition the nation’s export through the implementation of Export Expansion Facility Programme (EEFP). Under this programme, beneficiaries are expected to draw from an initial financial take-off of N50billion. With the increasing need to expand intra-regional trade in the ECOWAS sub-region, Nigerian exporters should use the opportunity offered by the African Continental Free Trade Agreement (AfCFTA) to deepen the non-oil export sector. 

The over-reliance on crude oil for decades has not so much helped the nation’s economy. It has made it difficult for the government to effectively plan its budgets and determine their outcomes. The mainstay of the economy remains agriculture and manufacturing where the country should have had a comparative advantage if successive administrations had not taken their eyes off the non-oil commodities. 

Considering the significant role the Micro, Small and Medium Enterprises (MSMEs) play in the economy, they need all the necessary support and funding to boost the nation’s non- oil exports.  At the same time, the government should address the problems that hamper the manufacturing and agric business. These include the ease of doing business, parallel exchange rates regime, erratic power supply, insecurity, multiple taxes, among other challenges.

Nigeria’s terms of trade can only improve if export aggregation and inclusion, trade facilitation and market development are strengthened. The relevant government agencies should conduct export management programmes designed to equip Nigerian exporters, regulators, financiers and policymakers with the practical knowledge and business skills required to compete effectively in the global export market.