• Thursday, April 25, 2024
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Nigeria’s exports to US record 3rd growth in 10yrs but still slow

Nigeria’s exports to US record 3rd growth in 10yrs but still slow

Nigeria’s exports to the United States have recorded the third annual growth in 10 years, following an increase in 2021, which is also the first of such since 2017.

BusinessDay’s review of data from the African Growth and Opportunity Act (AGOA) portal, shows that exports have been declining every year since 2011, but for an increase in 2016, which bucked the trend. It grew again in 2017, before the decline restarted in 2018 until the 2021 figures showing a third growth in 10 years.

Nigerian exports to the US were valued at $33.85 billion in 2011, before declining 43.8 percent to $19 billion in 2012. The following year, 2013, it further decreased to $11.7 billion and then $3.8 billion in 2014. By 2015 it became $1.9 billion and grew for the first time within that period, to $4.17 billion in 2016.

It grew again to $7.05 billion in 2017, but started declining again, with $5.62 billion worth of exports in 2018, and yet another decline in 2019, to $4.6 billion. By 2020, it was a bigger decline, with $1.48 billion worth of exports from Nigeria to the US, attributable to the global decline due to the COVID-19 pandemic.

At the end of 2021, however, exports to the US increased to $3.48 billion, which though a growth, is still below what was recorded in 2019 before the COVID-19 pandemic of 2020.

A further analysis of exports specifically under AGOA, a United States Trade Act, that significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries, showed exports have not fared better even with the duty free incentives for over 6,500 products.

AGOA exports from Nigeria to the US were $5.8 billion in 2017, dropping to $4.3 billion in 2018, with the decline continuing in 2019 to $3.16 billion. It was a sharp drop in 2020 to $477 million.

Available data by AGOA showed it was $1.21 billion as at November 2021, which represents 38 percent of what it was for full year 2019 before the COVID-19 pandemic, an indication the growth is far below pre-COVID levels.

“COVID was a very important factor and not just export to the US but there was a general business decline. Not just locally but globally,” said Sola Obadimu, DG, Nigerian-American Chamber of Commerce (NACC). “It wasn’t anything peculiar to Nigeria by a long shot,” he said of the recovery in exports by 2021. There was no insight into why exports from Nigeria to the US had dropped every other year until 2021.

AGOA, which builds on existing US trade programs by expanding the (duty-free) benefits previously available only under the country’s Generalised System of Preferences (GSP) program, is set to expire in 2025 but has not translated to yearly increase in exports from Nigeria, an indication the opportunity has been underutilized.

Nigeria’s exports to the US reached a peak of $38 billion in 2008, with varying declines over the intervening years until 2021 when it now stand at $3.48 billion.

“Under AGOA, there is a continual attempt to educate people, particularly on the issue of packaging and also in terms of supporting SMEs that are into exports in the areas of finance, quality issues, keeping to timelines and whatever letters of contracts they have with their clients,” Obadimu. “We hope things will get better particularly as we are on the final home lap to 2025, which is the terminal date for AGOA unless there is any form of extension.”

BusinessDay had previously reported calls for the country to take advantage of the opportunity to increase exports to the US under the AGOA program over the years, but data till date, has shown the opportunity remains largely untapped, and mostly even declining.