Nigeria’s major non-oil exports fall

In spite of the Federal Government’s push for foreign exchange through the non-oil export, Nigeria’s major export products are losing steam in the global market, according to BusinessDay analysis of data from the International Trade Centre (ITC).

According to the data, Nigeria exported oil seeds, oleaginous fruits, grains, seeds and fruit worth $280.62 million in 2016 as against $363.11 million value obtained in 2015, representing 22.7 percent decline.
Despite soaring rubber prices in the global market from March to December 2016 boosted by China’s buoyant car sales, Nigeria exported rubber worth $47.5 million to the global market in 2016 as against $60.5 million sales recorded in 2015 when rubber prices were relatively low.
Tobacco and manufactured tobacco substitutes worth $46.13 million were shipped to the international market in 2016 compared with $65.3 million worth of the products exported in the preceding year.
In 2016, Nigeria’s wood and wood charcoal export was valued at $280.24 million but this fell short of the $439.72 million worth of the products shipped out in 2015.
Even Nigeria’s raw hides and skins (other than furskins and leather) which are sought after by shoe makers in the Netherlands, Italy, China and Spain, had their market value decline to $216.72 million compared with $240.09 million, earned by exporters in the previous year.
Furthermore, the export of Nigeria’s edible fruits and nuts, peel of citrus fruit and melons, considered a premium by Nigerians in the Diaspora, as well as Americans and Europeans, fell to $66.18 million in 2016 from $156.83 million the previous year.
Likewise, Nigeria’s export of coffee, tea, maté and spices declined to $39.96 million as against $47.95 million worth of products moved out the previous year.
“The key problem still remains competitiveness with other countries’ products,” said Ede Dafinone, chairman of the Manufacturers Association of Nigeria Export Group (MANEG).
“Nigeria is still going through recession, which has put pressure on manufacturers and exporters, and shrunk the profits we were making before,” Dafinone told BusinessDay.
The ITC gets its data from export destinations, while Nigerian agencies which compile export numbers do so at the point of exit.
The good news, however, is that export of cocoa, Nigeria’s flagship product, rose to $899.51 million as against $626.04 million the previous year. Similarly, export of fish and crustaceans, molluscs and other aquatic invertebrates rose to $107.25 million, compared with $85.25 recorded in 2015.
Data in 2015 show that Nigeria’s total non-oil export value was $56.16 billion, out of which $52.54 billion consisted of minerals. Hence the 2015 data was $20.61 billion higher than that of 2015.
In spite of that, out of the total export valued at $35.54 billion last year, non-oil export constituted only $3.04 billion, while oil and minerals made up the rest. As such, non-oil export’s share was only 8.6 percent, indicating that Nigeria is yet to make any real progress in ensuring the sector plays a major part in foreign exchange earnings.
“The problem is that the cost of exporting products out of Nigeria is very high,” said Jon Kachikwu, CEO of Jon Tudy Interbix, an exporter to the US, who is also the chairman of Lagos Chamber of Commerce SME Group, said.
“There is also no policy in place to support exporters. When you export, you cannot get your money back at the going exchange rate. That was one problem that could have discouraged exporters last year,” Kachikwu said.
Exporters point at the suspension of the Export Expansion Grant (EEG) as one reason why Nigeria’s non-oil export has been on the decline since 2014.
The EEG was an incentive meant to support exporters to reduce cost of production and make their products compete favourably in the international market. But it was suspended in August 2013. The current administration has announced its reinstatement but the modalities are yet to be made public.
“There are lots of countries having difficulties breaking into new markets and the EEG allows them to offer their products at lower costs, in order for them to have a market share and compete,” Dafinone said.
Farmers complain that trees of major export crops such as cocoa, coconut and rubber, among others, in Nigeria are aging and require replanting or replenishing.
“There is a need to invest in new trees and fertilisers, to increase yield per hectare and also in the value chain. There is very little investment in processing as well,” said Mufutau Akinlolu, president, Coconut Growers Association in Badagary.
Analysts say the decline in a product like leather was caused by low global prices but add that the cost of production in Nigeria naturally makes it hard for goods moving out of the country to compete favourably.
“You can see that most of the products are either raw or agro. Where are manufactured goods? There is a need to raise the volume of value added goods to increase the value we get from exports. This will increase dollar earnings and create jobs,” said Ifeanyi Okeleke, executive director of Kenfrancis Farms Limited.