Nigeria’s Exports Rise By N10.57trn In 2 Years
Nigeria’s exports between 2016 and 2018 witnessed a significant rise. However, the dominance of crude oil in the nation’s exports sector raises concern among experts.
The value of Nigeria’s exports rose by N10.56tn between 2016 and 2018, reflecting an increase of 123.8 per cent over the period of two years.
In 2016, the value of Nigeria’s exports stood at N8.53tn.
It rose to N13.06tn in 2017, showing an increase of 34.69 per cent.
By the end of 2018, the country’s exports stood at N19.09tn, representing an increase of 46.17 per cent over the value recorded in 2017.
National Bureau of Statistics’ data showed that Nigeria recorded a favourable trade balance of N5.93tn in 2018.
The total value of trade was N32.26tn; import was N13.17tn while export was N19.09tn.
It added that the volume of total merchandise trade in 2018 was the highest recorded since 2014, nearly double pre-recession levels.
The fourth quarter of 2018 witnessed a fall in import. Imports fell to N3.59tn, representing 14.99 per cent quarter-on-quarter decrease.
The trend of export started becoming popular following the 2014 collapse in global oil prices which threw Nigeria’s economy into a recession in 2016.
The situation led to the Central Bank of Nigeria adopting several measures to protect dwindling foreign exchange reserves.
One of the measures was restriction of forex to importers of 41 items.
This restriction served as catalyst for importers of the items to go into large-scale export in order to get forex.
Also, the naira had lost its value at the time and was trading for about N500 to a dollar. This led many people to go into the export business in order to earn dollars.
A trade consultant, Mr Kola Awe, told our correspondent that many entities including multinationals were attracted to the export sector.
The Executive Secretary, Institute of Export Operations and Management Nigeria, Ofon Udofia, said after the recession, orderliness in the Niger-Delta region restored stability in Nigeria’s oil export.
Udofia added that more people also went into the non-oil export.
He traced the trend to the recession aftermath and the various restrictions that the CBN placed on the dollar.
Udofia recalled that during the recession, parents found it difficult to send money to their children abroad and so they naturally went into export to earn foreign currency to bridge the gap.
Also, many large firms that imported products could no longer depended on the CBN for dollar allocation.
They started exporting their products to markets outside Nigeria to be able to get forex to import or repatriate to their home countries.
Despite the rise, exports during the years under review were dominated by oil.
In 2018, crude oil export were put at N15.72tn, representing 82.3 per cent of the export trade.
Non-crude oil exports stood at N3.38tn, representing 17.7 per cent.
Out of the non-crude exports, non-oil exports consisting majorly of agricultural produce were put at N1.9tn, representing 6.2 per cent share of the export trade.
Udofia said it was time for Nigeria to move away from being a mono-product export economy.
He said the way to do this was through the upgrade of infrastructure and standards.
Nigerian farms where most of the exports are generated did not have the Good Agricultural Practice certification which allowed products to be sold abroad, he said.
He observed that due to lack of certification, Nigeria’s products could not be displayed in Wallmart and other big grocery stores overseas.
According to him, about 650 farms in Egypt, 1,600 farms in South Africa, 1,600 farms in Kenya and 300 farms in Ghana have the GAP while only one farm in Nigeria has been identified with it.
He said this made it possible for Ghana to purchase Nigerian products, rebrand them under their labels and display them in shops abroad.
He said, “When people buy products with global GAP certification, they are sure of them because they are regulated.
“We must have standards, train farmers so that our products can be export-ready. GAP standards require farmers having facilities in their farms to quarantine their produce.
“Another thing is the cost of exporting from Nigeria. Our charges are too high. Exports should be free of charges.
“Also, our infrastructure needs to be upgraded. Nigeria needs to have more seaport terminals dedicated to exports.”
The Director General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf, said unless Nigeria weaned itself from reliance on oil, it would not be able to pay attention to other exports.
He said, “We are not really exporting anything. The vulnerable position of Nigeria is always revealed when oil prices fall.
“Our economic survival is tied to the commodity market. That is why once the commodity market sneezes, Nigeria catches cold. This is a very precarious position to be in.
“We need to seriously think about diversifying our economy.”
The Executive Director and Chief Executive Officer of the Nigerian Export Promotion Council, Mr Segun Awolowo, stressed the need to add value to Nigeria’s export.
He said it would be difficult to earn much from the export of raw agricultural produce as value-added exports were more expensive.
Non-oil sector also had higher potential to create jobs than the oil sector, he added.
