The Central Bank of Nigeria (CBN) is planning to grow the non-oil export earnings six times to ensure it provides sufficient foreign exchange for the economy. The bank has pledged to increase such earnings from about $2 billion to $12 billion annually to fund FX-starved Africa’s biggest economy.
Ozoemena Nnaji, director, Trade and Exchange Department, CBN, in her keynote address during the Zenith Bank’s Trade Forum held on Wednesday via Zoom, said the CBN has commenced funding of the value chain of identified commodities with positive result already recorded in crops such as cassava, fish cocoa livestock, dairy maize palm oil product, rice, and tomatoes, among others.
“This effort is being bolstered by the establishment of the Non-oil Export Stimulation Facility fund, which was introduced by the CBN to diversify the revenue base of the economy and foster the growth of the non-oil sector,” Nnaji said while addressing the theme, ‘Prospects of Non-Oil Export During and Post COVID-19’.
She noted that the outbreak of the pandemic has brought to the fore, the implications of being over-dependent on oil, stressing the need to take a reformed look at other sectors of the country for economic stability. She further called for policy re-examination and reformation in the export sector as its prospects is being undermined.
“Optimal attention should be given to critical sectors like the micros, small and medium scale enterprises, ICT, agriculture and manufacturing sector which can make significant improvements on the economy,” she said.
Nigeria’s FX earnings from crude oil and minerals have declined by over 30 percent since COVID-19 started in the first quarter. Low global crude oil prices have pushed the import-dependent economy to the precipice, with importers and manufacturers scrambling for dollars.
The country earned $3bn from non-oil export in 2018, with commodities dominating the country’s exports rather than manufactured goods.
Poor infrastructure , lack of competitiveness and absence of support for many exporters are also key issues.
Ebenezer Onyeagwu, GMD/CEO, Zenith Bank, in his address, said when considering the country’s economic advancement, Nigeria must ask what happens when oil dries up.
“The country is endowed with abundant human and raw materials resources and also solid minerals. However, the country’s heavy reliance on oil price, despite its volatility, has undermined the prospects of the non-oil products and exports,” Onyeagwu said.
He advised that there is a need for the country to concentrate on its non-oil industry, especially agric business, and develop it for export purpose and also economic development. He stated that beyond that, there is a need to incorporate value-addition in the export process.
“We need to improve our primary production so we can increase and expand the value chain. We are not generating enough income from exports, and we need to explore, research and incorporate value addition in our export in order to effectively utilise it. We also need to change our taste buds,” he explained.
He noted that beyond processing cassava for cassava flakes, other products like starch, glucose, sorbitol can be exported for more income.
Dennis Olisa, executive director, Zenith Bank, noted that the country’s non-oil imports weigh more than exports, especially in critical areas like agriculture, raw materials, solid mineral, manufactured items, among others, stating that if properly harnessed, the country’s exports have the ability to contribute significantly to economic growth and development. He, however, said the government must provide enabling mechanisms such as financing options to support the non-oil exports.
“The most viable economic option for a nation now lies in stimulating the non-oil export sector,” Olisa said.
