Whether oil or non-oil exports, available data reveals that Nigeria is punching below its belt for a country aiming to achieve a trillion-dollar economy by 2030.
Africa’s biggest economy is yet to explore its resources fully enough to turn it into shared prosperity, as proceeds from the nations’ non-oil exports appear meagre.
Nigeria is currently at an economic crossroads where revenue from crude oil seems not to be enough to cater to its burgeoning population, resulting in increased poverty. 133 million of the 227 million people are multidimensionally poor, data from the National Bureau of Statistics (NBS) shows.
According to the NBS, in the last three months of 2023, the largest exported product was petroleum oils and oils obtained from bituminous minerals. Crude oil was valued at over N10 trillion, representing 81.23 percent of the country’s total exports for that period, while non-oil exports stood at about a staggering N1 trillion.
“In the quest to achieve a diversified economy so as to jack up exports and overall economic growth, Nigeria needs to learn strategies from Asian countries.”
Though Nigeria’s non-oil exports grew by 38.5 percent to N1.8 trillion in Q1 2024 from N1.3 trillion recorded in Q1 2023, it still appears pale for a country fighting to shake off the clutches of oil dependence.
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For context, non-oil exports refer to goods and services that a country exports, excluding petroleum and related products.
These exports can include a wide range of goods, such as manufactured goods, agricultural products, textiles, machinery, electronics, and services like tourism, software, and financial services.
In the quest to achieve a diversified economy so as to jack up exports and overall economic growth, Nigeria needs to learn strategies from Asian countries.
After rapid industrialisation in the 1960s catapulted Singapore’s development trajectory, manufacturing became the nation’s main driver of economic growth.
In the early 1970s, the Asian nation reached full employment and joined the ranks of Hong Kong SAR, the Republic of Korea, and Taiwan, China, a decade later, as Asia’s newly industrialising economies.
The manufacturing and services sectors remain the twin pillars of Singapore’s high-value-added economy.
“50 years ago, Singapore was confronted with high unemployment, poor infrastructure, and a housing shortage.
“Today, the city-state is ranked as one of the most livable cities, boasting one of the highest levels of human capital development in the world,” a report by the World Bank on Singapore shows.
With huge investment in education, manufacturing, and industrialization, the top export of Singapore as of 2022 was integrated circuits, estimated at $81.9 billion, according to data from the OECD.
“In 2022, Singapore was the world’s biggest exporter of glass working machines ($1.21B), incomplete movement sets ($72.3M), and human hair ($15M),” the data further revealed.
World Bank data shows that Singapore has a gross national income of $70,810 per capita as of 2023 and is ranked the best country in the world in human capital development.
This means that a child born today in Singapore will be 88 percent more productive than one born elsewhere.
Another country whose rise to economic prosperity and sustainability through non-oil exports is Vietnam.
If a country was reported as the poorest country in the world by 1980—poorer than Somalia, Ethiopia, and Madagascar—and today it’s three times richer than the three combined, then lessons from such a country must be learned.
While Vietnam has put one of its greatest assets—a large youth population—to use by growing its Gross Domestic Product (GDP) by 104 percent to $433 billion in 2023 from $212 billion in 2013, according to the International Monetary Fund, Nigeria’s GDP dropped by 37.5 percent to $250 billion from $400 billion, potentially making it lose its position as the largest economy in Africa to South Africa.
Besides an increased national income, Vietnam has equally raised its per capita income at 12.5 percent annually, from $359 in 2000 to $4,163 in 2022.
It has done this by growing exports by 15.9 percent annually, from $14 billion in 2000 to $371 billion in 2022. Export growth has been diversified, reflecting a boom in both primary commodities and manufacturing exports.
Vietnam is currently one of America’s top-ten trading partners due to its rapid manufacturing and industrial economy.
The country’s primary exports were once coffee and coconuts. Today, they are computers, mobile phones, and other electronics.
“Vietnam has placed more reliance on labour-intensive manufacturing in the form of textiles and footwear and capital-intensive manufacturing such as electronics, which are now 85 percent of the country’s total exports from 42 percent in 2000,” Agora policy said in a recent report.
Reacting to ways Nigeria can boost its non-oil exports, Uchenna Uzo, professor of marketing at Lagos Business School, said agriculture is still Nigeria’s opportunity for growth because it is the way Africa’s biggest economy can be industrialised.
“Manufacturing and local production are the key things that can set Nigeria apart,” Uzo said, adding that Nigeria can also attract diaspora investment if the infrastructure is right.
Non-oil exports are significant for countries that heavily rely on oil exports as they diversify the economy, reduce dependency on a single commodity, and contribute to economic stability and growth.
“Nigeria’s oil dependence has severely reduced government incentives to develop institutional infrastructure for the regulation and taxation of non-oil sectors in the economy. This crippled fiscal capacity over time,” Oyebanji Oyelaran-Oyeyinka, senior special assistant to the president of the African Development Bank, said in a symposium held in Lagos recently.
He stated that a diversified economy, especially one focused on the manufacturing and industrial sectors, is needed for rapid growth and development in the country.
According to him, manufacturing comprises a significant source of demand for goods in other sectors, including banking, transport, infrastructure, insurance, and communication services.
Studies show that virtually all cases of high, rapid, and sustained economic growth in modern economic development have been associated with industrialisation, particularly growth in manufacturing production, all of which are in the non-oil category.
