• Monday, June 24, 2024
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The imperative of maximising Nigeria’s export potential

Nigeria’s export potential

Trade is, indubitably, an all-important economic lever for many countries across the world. Whether advanced or developing, international trade enables countries to access markets and services that may not have been available domestically, thereby causing a boost in revenue for all participating nations.

The World Bank confirms that countries that embrace international trade tend to grow faster, innovate rapidly, provide higher income, and create more opportunities for their people.

For Nigeria, trade is critical to the national economic makeup. In 2021, Nigeria exported $57.7 billion of goods, making it the world’s 52nd most exporting country. Nigeria’s top export during this period was crude oil which netted the government $41.8 billion. While Nigeria remains a modest exporter of goods, the country still has a lot of potential to fulfil concerning trade exports.

It has been reported that existential trade-related challenges like lack of access to foreign exchange, high cost of doing business, the vast gulf in the shortage of essential trade infrastructure, the threat of crime and persistent security lacunae, corruption and many other minor challenges continue to deprive Nigeria of its full export potentials.

The consortium of trade constraints affecting Nigeria’s export processes means that Nigeria’s non-oil exports need to catch up to reach the level of many of its African peers. However, regardless of the dire nature of the situation, there remains a glimmer of hope within Nigeria’s export industry.

In January 2023, the Nigerian Export Promotion Council (NEPC) reported that Nigeria generated $4.82 billion from non-oil exports in 2022, a 39.91% increase in non-export revenues from 2021. This trade statistic shows that Nigeria’s trade industry can reach greater heights if the country’s non-oil export base is fully harnessed.

These are some of the methods I believe Nigeria can use to secure its export base and supercharge its economy in a way that will lift millions of Nigerians out of multidimensional poverty.

1. We need to reduce the cost of doing business

The exorbitant cost of manufacturing goods in Nigeria remains a reason Nigeria’s trade export has not grown to higher levels. In a survey conducted by the Manufacturers Association of Nigeria (MAN), between 2018-2021, it was discovered that close to 400 big businesses collapsed in Nigeria because of rising business costs. Further, in recent research conducted by BusinessDay, it was found that manufacturing firms listed on the Nigerian Stock Exchange expended more than N207 billion naira as energy costs within the first half of 2022 alone..

If we look at it deeply, we find that the two primary reasons that contribute to the rising business costs include the volatile exchange rate in Nigeria and the skyrocketing energy prices. For instance, BusinessDay noted that the price of diesel, which traded at N288.09 per liter on average in January 2022, rose to N774.38 per liter in July. This alone represents a 168.8 percent surge in the price of diesel.

The Nigerian government must address the general economic issues at the source to boost Nigerian exports by stemming the rising cost of doing business for Nigerian manufacturers.

2. We need to improve market access for Nigerian exports

In a report by the Africa International Trade and Commerce Research (AITCR) conducted in partnership with the Nigerian Export Promotion Council, it was reported that Nigerian shea butter and ginger have significant export potential in various international markets across Asia, Europe, and the United States.

To improve market access for Nigerian goods, the Nigerian Export Promotion Council (NEPC) has tasked Nigerian exporters to embrace food safety systems that enable their products to gain market access to many export domains worldwide. The NEPC has sounded the alarm that with the coming of the African Continental Free Trade Agreement (AfCFTA, it has become imperative for non-oil exporters in Nigeria to acquire additional certifications to enable them to compete effectively in global markets.

Read also: FG unveils quality council to tackle export rejection of products

3. We need to harmonize trade policies at all levels

PwC maintains that inconsistent government policies wreak far-reaching havoc on export activities in Nigeria. Indeed, we have seen incongruent government policies like the closure of the Nigerian border in 2029, the restrictions of FX for milk and corn importation and many more that have had adverse effects on manufacturers in Nigeria.

I call on the government at all levels to assiduously harmonize its policies to enhance Nigeria’s trade and manufacturing industry. Only then can trade exports in Nigeria receive a massive boost.

Conclusion

I believe that the provisions above will significantly boost Nigerian trade exports. If we can create an environment that attracts investment, provide support through adequate amenities, improved market access to Nigerian exporters, and well-aligned policies, Nigerian exports can advance and become valuable export goods in the global market.