The biggest takeaway from Customs data published by the National Bureau of Statistics (NBS) on foreign trade in the third quarter turned out false and misleading.
The report showed manufacturers in Nigeria exported the most goods in four years in the third quarter of 2019, a trend that implied an expansion in manufacturing activity and perhaps the biggest sign yet that the government was making progress in diversifying the country’s foreign exchange earnings.
Further analysis showed that manufacturing exports accounted for 10.85 percent of total exports in the first nine months of 2019.
With the exportation of some N1.5 trillion worth of manufactured goods in the nine-month period under review, it implied manufacturers had exported a larger amount of goods compared to previous years, despite being three months short of a full year.
It’s also the first time since the NBS started publishing data that manufacturing exports as a percentage of total exports were in double-digits. Manufacturing exports were equivalent to 3.48 percent of total exports in 2018, which means it has tripled this year. It was 1.71 percent in 2017 and 2.15 percent in 2016.
The biggest jump came in the third quarter when manufacturers are reported to have exported N996 billion worth of products, which marks an increase of 839 percent compared to the second quarter of 2019 and represents 18 percent of total exports in the period. There was a 1000 percent jump compared to the third quarter of 2018.
A rude awakening is what follows an attempt to uncover the particular manufactured items that were being exported.
Rather than a jump in exports of locally made goods, the increase was due to the re-exports of high value cable sheaths of iron, submersible drilling platform, vessels and other floating structures.
Re-exports are foreign goods exported in the same state and form as previously imported from a particular country.
In this case, Nigeria had basically imported these items, mainly from Ghana, and re-exported to same Ghana.
The NBS said at the foot of the data page that “It is recommended that they (re-exports) be recorded separately for analytical purposes.”
When re-exports (worth N951 billion in the third quarter of 2019) are backed out from manufacturing exports, it leaves a value of N45 billion rather than N996 billion.
Rather than the 18.85 percent reported, manufacturing exports as a percentage of total exports in the third quarter shrink drastically to 0.85 percent of total exports.
“It’s wrong to lump re-exports with manufacturing exports as it gives the false impression that the goods were made in Nigeria and exported when that is not the case,” said Muda Yusuf, director-general at the Lagos Chamber of Commerce and Industry (LCCI), a trade advocacy group that draws membership from over 2000 companies including manufacturers.
“Manufacturing exports are not on the rise as the headline figure suggests and the country is still largely a mono-export economy,” a stunned Yusuf said.
