By Anthony Otaru
Over time, Nigeria’s non-oil exports have exhibited massive potential for economic growth and development, given the robust foreign exchange earnings they have generated for the national treasury in years past.
Although expectations from the sector’s contributions remain daunting, the impact reveals a readiness for economic diversification, signaling hope for increased revenues if proper attention is given by all concerned.
For example, figures obtained from the National Bureau of Statistics (NBS) show that in real terms, the non-oil sector contributed 94.52 per cent to the country’s Gross Domestic Products (GDP) in the third quarter of 2023, higher than the share recorded in the third quarter of 2022 and lower than the second quarter of 2023 record of 94.66 per cent.
Similarly, figures recently released by the Nigerian Export Promotion Council [NEPC] indicate that Nigeria generated $2.7bn from the non-oil sector in the first half of 2024, an increase of 6.26 per cent compared to the $2.539bn recorded in the same period of 2023.
Also, a release by the Pre-shipment Inspection Agents (PLAs) clearly showed that of 15 products exported in the period under review, cocoa beans were the most exported commodity, with 23.18 per cent in percentage value, followed by urea-fertiliser, which was 13.78 percent, and sesame seeds, with 11.04 per cent of the total exported non-oil products.
The PLAs said a total of 211 products, ranging from agricultural commodities to extractive industries, were exported in the first half of 2024, indicating that Nigerian products are gradually diversifying from traditional raw agricultural exports to semi-processed manufacturing products.
On job creation, NBS said the non-oil export sector has positively impacted unemployment reduction. Direct employment within the non-oil export companies alone is estimated at 200,000. In contrast, indirect employment in the agricultural industry, which gains from the market linkages provided by the exporting companies, is estimated at over 10 million.
Speaking at a forum in Abuja, the NEPC Executive Director, Nonye Ayeni, attributed the increase in the value of exported products in the first half of 2024 to a strategic achievement of the council’s “Operation Double Your Exports.” These results came to fruition through partnerships, advocacy, capacity building, and export intervention programmes, among other things.
Ayeni said it is pertinent to note that so many exportable products and their derivatives are progressively gaining prominence as demands for them are also gradually gaining prominence.
“These include but are not limited to fresh vegetables, citrus peel, and Sorghum. While their contributions are still in the process of attaining significant levels, their regular inclusion on the export table suggests a growing presence in the export landscape; there are also a lot of potentials in services that need to be explored and harnessed, especially for logistics and ICT among others,” she said.
The NEPC boss explained that of the top 20 exporting companies in Nigeria, Indoram-Eleme Fertilizer and Chemical Limited took the lead with $198.8m, while Starlink Global and Idea Limited recorded the second–highest value of $184.7m for agricultural product exports.
“Thirty-two banks contributed to the non-oil export for the first half of 2024. Zenith Bank Plc led with 43.09 per cent of total exports for non-oil while First Bank Nigeria Plc and Fidelity Bank took the 2nd and 3rd positions with 6.56 percent and 6.38 percent, respectively,” she said.
The NBS said that a critical look at the contributions of agricultural products to the economy also shows that Nigeria’s cocoa exports rose by 304 percent in the period under review due to higher demand and naira depreciation.
It added, “A close look at elected agricultural export products speaks volumes as to why the non-oil exports contributions to the national economy cannot be overemphasized.”
According to NBS, the country’s cocoa exports, which accounted for 42.4 percent of the N1.04trn agricultural exports for the period under review, surged to N438.7bn in the first half of 2024 from N108.6bn in the corresponding period of 2023.
It also said that Nigeria exported $14.8m worth of raw cotton, making it the 42nd largest exporter of raw cotton in the world. At the same time, raw cotton was the 65th most exported product in Nigeria.
“The leading destination of raw cotton exports from Nigeria are India ($5.1m), Pakistan ($3.65m), Vietnam ($3.6m), Bangladesh ($1.77m), and China ($135m).
Corroborating the NBS figures on agricultural contributions, the President of the Cocoa Farmers Association of Nigeria [CFAN], Adeola Adegoke, said, “Cocoa has become an alternative to oil exports, and the government needs to protect and promote its cultivation, especially given the current economic challenges facing the country.”
Adegoke explained that though the Federal government has inaugurated the National Cocoa Management Committee [NCMC] to tackle some challenges facing cocoa production, poor post-harvest processing practices by farmers need special attention.
For his part, renowned economics professor Sheriffdeen Tella stated that contributions from agriculture, manufacturing, and other services in the non-oil sector remain the way to go in terms of policy initiatives and implementation rather than relying more on crude oil revenues.
Tella lamented over the poor handling of the sector by successive governments.
He stressed, “Every government has been giving the impression that it is promoting the non-oil sector to improve contributions to Gross Domestic Product [GDP] from the sector, but experiences have shown that it has little to do with the production aspect but all about revenues. That is why whenever revenue from oil improves, production in the non-oil sector is ignored.”
Despite its lofty contributions to the national economy, the non-oil export sector, like any other, is faced with several challenges that, according to stakeholders, need to be resolved as soon as possible.
Adegoke said, “Nigeria’s non-oil export sector lacks an articulated export policy and limited access to finance. Infrastructure deficits, regulatory bottlenecks, and insufficient laboratories, all of which have led to constant product rejects at international markets, are some of the numerous challenges facing the sector.”
“Nigeria has not done well in global non-oil export trade as it ranked 52nd among nations; the country has not also done well domestically in terms of the share of the non-oil exports with the people,” she added.
However, given the potential inherent in the sector, it has become necessary for stakeholders to take the bull by the horns by finding solutions to all the teething problems that have held the sector down for long so that the nation’s dreams of economic diversification from oil revenues will be realized as quickly as possible and in the country’s interest.
