• Sunday, February 25, 2024
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Economy takes bashing as best non-oil export constitutes 4% of total


five-year analysis of the International Trade Centre data pinpoints the source of Nigeria’s current economic trauma as a blatant failure to diversify away from oil,  with the country’s best performing non-oil export within the period constituting only 3.8 percent of total non oil exports.

The data show that rubber is Nigeria’s most performing export product, while cocoa is next in value in the non-oil segment, with only 1.7 percent share.

Of the $539.34 billion worth of exports between 2010 and 2014, crude oil and distillation products recorded 89 percent share, reflecting the country’s penchant for oil and neglect of the non-oil sector over the years.   

The ITC data collated by BusinessDay, further show that while rubber occupies 3.82 percent, cocoa shared 1.7 percent  within the period. Similarly, raw hides, leather and skins (other than furskins) contributed only 1.15 percent.

Finished manufactured products made insignificant contributions to the export trade, with aluminium occupying 0.20 percent, plastics 0.17 percent and machinery/nuclear reactors& boilers 0.16 percent.

Other products exported within the period included fertilizers, cotton, lead, tobacco, coffee, tea, fish and crustaceans, among others.

“Nigeria has spent so much time supplying primary products such as cocoa and rubber to the world,” said Imo Itsueli, former chairman of the Nigerian National Petroleum Corporation (NNPC), at a foreign policy dialogue organised by the Lagos Chamber of Commerce and Industry (LCCI).


“This is even replicated on the oil sector, where attention is focused on crude. If we focus our energy on refined products, our impact on international trade policy will change,” Itsueli said.

Destination countries of Nigeria’s non-oil exports were the Netherlands, China, the USA, Italy, India and the ECOWAS region, among others.

Data show Nigeria shares less than one percent of  world trade. The country’s trade influence is declining significantly, as oil, which makes up 90 percent of exports, continues to take a beating from global headwinds.

Africa’s largest economy exports basically primary products, as its manufacturing sector is beaten by structural, political and economic vagaries.

“We believed a lie in the oil industry for a long time. We have abandoned agriculture and manufacturing for a sector that does not even create up to one percent of jobs,” said ‘Bintan Famutimi, president, Nigerian-American Chamber of Commerce, in Lagos at the foreign policy forum.

Akin Oyebode, professor of international law and jurisprudence at the University of Lagos, said  Nigeria’s  marginal influence on global trade and the drastic reduction in the country’s oil sales abroad have rendered it expendable, as China and India, which had hitherto opened a new vista for Nigeria’s oil exports, have been revising their options in light of the downturn in their economic forecasts.

“Nigeria can enjoy a more visible profile if it can get its act together by strengthening its industrial production base, spiral up its power generation capacity, enhance transmission and distribution, improve education and medical care delivery and close the gap between material production and consumption,” Oyebode said.

While Nigeria’s export collation agency, Cobalt International Services obtains its data from the volumes of goods leaving the country, the ITC, which is a joint  agency of the World Trade Organisation and the United Nations, gathers data from import destinations of countries.

The data show that most of the exported commodities are primary products which serve as raw materials at foreign factories.

Nigerian manufacturers are taking a beating from high energy costs, unavailability of long-term finance, port gridlocks, raw materials inaccessibility, exchange rate volatility and a multiplicity of taxation from government agents.

These have compounded their lack of competitiveness in both local and international markets.

Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN) said a conducive environment for manufacturing  is critical for a sustainable economic diversification, improved export of finished products and economic development.

“A strong manufacturing sector will create wealth, generate employment and enhance the desired inclusive growth of the economy, which would translate into higher standards of living for the citizenry,” Jacobs said, in an industrial blueprint.

One key challenge of Nigeria’s non-oil sector is that most exports are done informally and thus remain uncaptured.

In 2014, Olusegun Awolowo, CEO, Nigerian Export Promotion Council (NEPC), said the 2009 -2013 ITC data showed that some non-oil export transactions still went unrecorded.

‘’The data suggest that a fraction of non-oil activities is being captured, as an average of about 200 percent of the transactions are not recorded,’’ Awolowo said at a forum in Lagos.