Companies export N22.3bn raw materials in 9 months

Nigerian export companies shipped out raw materials worth N22.23 billion between January and September 2016, according to the latest report by the National Bureau of Statistics (NBS).

A breakdown of the report shows that Nigerian exporters moved out raw materials worth N8.9 billion between January and March, and inputs valued at N5.7 billion in three months ending June. Also, raw materials valued at N7.6 billion were exported in three months ending September 2016.

“This may sound like good news, but the truth is that no country develops by exporting its raw materials to other countries,” said Ike Ibeabuchi, CEO of a chemical manufacturing firm MD Limited.

“The countries where these raw materials are exported to process them and then bring them back again here as finished products,” said Ibeabuchi.

Raw Materials accounted for 6.37 percent of the total export in the third quarter of 2016 (July to September). Total export within the period amounted to N2.31 trillion while import shared the rest. Solid minerals, some of which also serve as inputs for firms, had a share of exports worth 0.43 percent. Nigeria’s export partners include India, USA, Spain, France, Netherlands, Italy, Ghana, Togo, and Ivory Coast, among others.

Nigeria is a key exporter of cocoa and its preparations, cassava starch, flour, limestone, gypsum, iron scraps, and tin, among many others.

Many of these raw materials are needed by Nigerian firms but companies find opportunity in them for export to earn dollars and Euros.

European, American and Asian companies turn these inputs into products and export to Africa.

Experts are worried that many exporters even fail to add value to these raw materials to earn higher foreign exchange. Analysts estimate that value addition can double or triple the prices of a commodity in the global market.

“Value addition is key to economic diversification,” Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), told BusinessDay last year.

A rice producer told BusinessDay in 2016 that processing equipment is often expensive and needs large capital outlay.

The rice producer called for a single-digit funding that will enable exporters have processing equipment that will enable them to add value to commodities.

 

ODINAKA ANUDU