The recent release, albeit belated, of the Central Bank of Nigeria’s (CBN) 2012 Annual Report revealed some emerging trends with regards to the nation’s non-oil export sector, among which is the growing importance of exports of finished products to the nation’s foreign exchange earnings.
It is cheering that the country’s non-oil exports in recent times have seen some growth as government’s drive to diversify the economy away from the oil sector gathers pace. The CBN had in its third quarter 2013 economic report revealed that total non-oil exports earnings rose to $2.64 billion in the review period, indicating an increase by 236 percent compared to the preceding quarter.
The report largely attributed the development to the 55.9 and 187.4 percent increase in the proceeds of industrial and manufacturing sectors, respectively, as well as the significant increase in proceeds from primary agricultural and other products.
According to the CBN’s economic report in July 2013, the rise in non-oil export earnings by 281.9 percent to $908.15 million in the previous month was largely driven by the 952.4 percent ($614.6 million) rise in receipts from export of manufactured products (including glass and glass products and plastics) and the 68.6 percent increase in receipts from exports of industrial sector (particularly chemical).
Nigeria, which earns more than 90 percent of its foreign exchange earnings and about 80 percent of government revenue from its oil industry, has seen decline in oil production and revenues in recent times.
The CBN’s 2012 annual report has indeed accentuated the need for Nigeria to give more priority to the growth of the industrial, manufacturing and agricultural sectors. The exports of finished products are critical in boosting the country’s foreign exchange earnings. An analysis of the list of the top 100 non-oil exporters in the CBN’s 2012 report shows that finished products and fully-processed produce earned the nation more foreign exchange in 2012. The sale of manufactured products, especially textiles and other materials, increased by 32 percent between 2011 and 2012. Also, many of the firms that exported finished products performed better in 2012 fiscal year.
There is need for government to continue to strive towards creating an enabling climate for the production and export of heavy manufactured goods such as heavy machinery, equipment, sophisticated electrical and electronic appliances. Presently, our manufactured exports include cigarettes, evaporated milk, soaps, detergents, noodles, dairy products, ingots, bathroom slippers and seasonings.
While we recognise the efforts of the government in tackling the challenges faced by non-oil exporters, we believe a lot still needs to be done as regards provision of basic infrastructure facilities, funding and creation of an enabling business environment.
We cannot over-emphasise the need for government to put in place policies to support exporters as well as expedite action on infrastructure development to enhance the growth of the non-oil sector. We hope that the reforms in the power sector will eventually solve the epileptic power supply, which still remain a major challenge for processing and manufacturing companies in the country.