… Advocates Diversification from Oil
A private placement deal aimed at raising about $60 million to fast-track the Nigerian Export-Import Bank (NEXIM) Sea link project has been sealed by its stakeholders and is scheduled close in December. The Managing Director of the Bank, Robert Orya confirmed this development.
He added that the private placement has December deadline for closure. “The sea link project is very much on course. You know NEXIM is facilitating the setting up of a shipping line for West and Central Africa region.
There is an ongoing private placement to raise about $60 million. That private placement would have closed last December, but some countries that were engulfed with Ebiola disease, countries like Sierra Leone, Liberia and Guinea requested that they should not be left out.
He said: “We have to re-open that private placement and it will now close by December. But in order not keep the traders waiting; we are coming out with a pilot scheme. We have contacted some ship owners to build for us a ship.
“We have met with blue chips company and we have been able to determine the volume of goods they moved between West Africa and North Central and the frequency of the movement.”
Mr. Orya also gave reasons for the reluctance of the bank to finance investors in the oil sector, stressing that the industry contributed less to the nation’s gross domestic product when compared to what the real sector contributes.
He said: “If we don’t have oil in this country, this country would have been a very great country. In the first place, it was what we got from agriculture that we used in exploring for oil in the 1960s.
“And when we got this oil, what were we supposed to do? We are supposed to have used the proceeds from it to develop agriculture and some other non oil sectors. But we have not done that. And because we get easy revenue from oil, Nigerians have become very lazy; we’ve become consumers. Nobody is into production because oil is easy.
“If oil dries up, because of the potentials we have in the non-oil sectors, there will be considerable changes. How many Nigerians are employed or involved in the oil sector despite the fact that 95 per cent of our export revenues come from oil and 70 per cent makes up the revenue of the government?”
He argued that revenue from the oil sector should have been used to develop the non-oil sectors, stressing that the non-oil industry determines the rate of growth in the economy, not oil.
“What is the percentage of the oil sector to our GDP now?” he asked.
He also said, “But if we have used that money to develop agriculture, manufacturing, solid minerals and others, then we would have boosted our GDP. Right now we say we have identified 34 solid minerals in commercial quantities, but as we are standing here, the solid minerals sector is contributing less than one per cent to the GDP. In fact, it is actually 0.9 per cent. What does that tells us?
“It tells us that we have trillions of Naira that are inside the ground and nobody is looking at it because we have easy revenue from oil. So that is why I say if oil should dry up in this economy, Nigeria is going to be better for it because of the huge potentials we have in other sectors.”
On how his bank was helping in improving the non-oil sector, he said, “That is why I don’t touch oil. In my financing I don’t touch oil. I am only concerned with non-oil export. I’m talking about financing the manufacturing sector, agro-processing, etc. I want a situation where I will stop financing raw agricultural commodities to other countries.
“Let us add value, let us create jobs here, because when I finance raw agricultural commodities, I’m exporting jobs and opportunities to other countries, but I am not doing that.”
Meanwhile, the Nigeria’s agricultural sector has received $8bn (N1.576tn) worth of investment commitments between 2011 and now, the Nigerian Export Import Bank has said.
According to the bank, Nigeria also has the potential to feed the world considering the fact that the country is one of the world’s largest producers of major agricultural commodities in spite of challenges in the sector domestically.
NEXIM Bank stated that recent efforts to boost investment in agriculture had yielded some results. The bank further pointed out that the country recorded increase in food production by 21 million metric tonnes between 2012 and 2014, and had a decline in food import bills from $6.9bn in 2009 to $4.35bn in 2013.
The bank, in the document, which was endorsed by its Managing Director/Chief Executive Officer, Mr. Roberts Orya, said Nigeria got $8bn investment commitments between 2011 and 2015; $40m investment commitment in rice production; increase in fertilizer use from 13 kilogramme per hectare to 80kg per hectare; and the number of seed companies increased from 11 to 34 between 2011 and 2014.
“There is no doubt that if the current tempo on private investment continues, Nigeria will soon return to its pride of place and be in a position to feed the world,” it added.
NEXIM noted that in spite of the numerous challenges in the agricultural sector, the country had the potential not only to be self-sufficient, but to feed the rest of the world.
According to the bank, statistics from the Food and Agriculture Organisation showed that in the ranking of major producing countries of the world, Nigeria is number one in the production of cassava, yam and cowpea; second in producing millet; and third in sweet potato, sorghum and groundnut production.
The FAO ranked Nigeria fourth in the production of cocoa, according to the document.
The bank stated, “Nigeria remains one of the world’s largest producers of major agricultural commodities in spite of challenges. The above indices indicate that Nigeria can feed the world if many of the critical challenges can be addressed. This will also go a long way to enhance inclusive and sustainable economic growth, leading to increased job creation and better living standards.
The document stated, “Nigeria has good weather and rich arable land. Out of total arable land of about 70 million, only about 40 per cent is cultivated. Nigeria can therefore boost current food production levels through concerted efforts to increase acreage cultivated and increased yield per hectare.
“This will require significant investment in production inputs such as machinery, improved seeds/seedlings and other farm inputs.”
To feed the world, the bank advised that Nigeria must be in a position to trade freely in the international market, stressing that beyond the challenge of production, another major challenge was poor access to foreign markets owing to quality standards and packaging.
