Home » Commerce and Industry » Diversifying Nigeria’s Revenue Base Through Export

Diversifying Nigeria’s Revenue Base Through Export

The Nigerian Export Promotion Council (NEPC) recently identified 13 National Strategic Export Products (NSEPs) to replace oil in an effort to diversify the nation’s revenue base. The council, on its website, stated that it was part of efforts to address the quest to increase the basket of exportable products from Nigeria following the dwindling oil revenue.

It stated that the NESPs, grouped under three categories, are agro industrial, mining related and oil and gas industrial products. “For agro industrial it has palm oil, cocoa, sugar, rice and cashew while mining related are cement, Iron ore/metals, auto parts/cars, aluminum. The other oil and gas industrial products have petroleum products, fertilizer/urea, petrochemical and menthol,’’ it stated.

NEPC disclosed that, Nigeria realised $2.970 billion from non-oil export, in 2013 a 15.9 per cent increase over $2.561 in 2012. Disclosing this at the business meeting tagged” A New Dawn For Nigerian Export” organised by the Nigerian- British Chamber of Commerce, NBCC, last year, the Executive Director/ CEO, NEPC, Mr. Olusegun Awolowo, said Nigeria’s export is dominated by oil, but that, there has been steady growth in Non-oil export to $2.970 billion in 2013, a 15.9 per cent increase over $2.561 in 2012.

He said that non-oil export potentials have not been fully exploited despite endowed natural resources solid minerals, agriculture, adding that, some of the challenges are poor infrastructure, energy, finance, skills and capacity. According to him, the non-oil export challenges in Nigeria are infrastructural deficiency, poor standardisation of products, high cost of production, falsification of documents, weak linkages to chain supply, unwholesome trade practices, and exports dominated by primary products, inability to meet export orders, restricted access to credit and trademark.

He said that for Nigerians to position effectively in the global market, Nigerian goods for export must meet competitiveness standards – identify international benchmarks, invest in skill, technology & innovation, provide conducive and stable Export Policy Environment, intensify PPP collaborations, consult widely with stakeholders, address issues of market failure, partner with Bi-lateral chambers of commerce on export opportunities and promotion, as well as engaging Nigerians in Diaspora, take optimal advantage of trade preference programmes – AGOA and others, export of value added products as against commodities, simplify export procedures and documentations and imbibe E-Commerce culture to reduce cost and time.

Awolowo noted that there is no better time than now to critically address issues that will enhance the development and promotion of Nigeria non-oil exports and that the world is our oyster as opportunities abound to stamp ‘Made in Nigeria Products’ on the global stage.

He said we need to harness our comparative advantage population, natural resources, geo-diversity, adding that, The Bilateral Chambers of Commerce including NBCC has a critical role to play in harnessing the existing potentials for export by achieving world class standards for products and creating jobs and economic growth through value chains.

On minning Industry, Andries Rossouw, PwC Assurance Partner, says: “Mining companies from emerging markets tend to focus on mining in their own jurisdictions whereas those in the OECD tend to have more diverse global portfolios. This divide, coupled with the wealth of new development potential in emerging markets and differing shareholder expectations, continues to create divergence.”

“How the industry will grow in the years ahead will be impacted by a number of factors, including the ability of tier 1 assets to produce substantial quantities at costs significantly below average; the demand for commodities from China and other emerging markets; the impact of changing tax, environmental and beneficiation regimes; and the willingness by the industry to enter into greenfield projects, instead of only developing smaller brownfield projects,” concludes Rossouw.

In the nation’s agricultural sector, operators have urged the federal government to fully implement the policies of Export Expansion Grant (EEG) as well as Negotiable Duty Credit Certification (NDCC) which were fashioned out by the Jonathan Administration to principally boost the nation’s Rice Value chain.

The operators congregating under the auspices of Federation of Agricultural Commodity Associations of Nigeria (FACAN), the body’s National President, Dr. Victor Iyama, observed that member-companies and organisations in the Agriculture and agro-allied sector form the bulk of the non-oil exporters in the country and contribute over 80 per cent of the nation’s non-oil export earnings.

Actually, analysts say that the massive investment drive in local food production cannot be realised so long as the nation continue to spend huge foreign exchange on rice importation. According to reliable sources, Nigeria expends a whopping sum of US $9 billion annually on wheat, rice, sugar and fish importation, products which the nation could mass- produce or even export given the right political will and commitment. Again, the figure could be reduced by 50% within three years if the Government religiously implements the EEG and NDCC utilization policies.

NEPC should continue processing of EEG claims submitted to them which are pending for processing; the Nigerian Customs Service should allow the utilisation of NDCCs without any further delay “(and if this is not done, we may have no choice other than to seek a redress in the court of competent jurisdiction)” FACAN noted that non-oil exports have grown fivefold between 2005 and 2011 which is a much higher rate of growth than the Nigerian GDP. Since 2011, the growth rate has stagnated and now even reversed because of the poor implementation of the EEG policy.

“We believe it is time that we understand the urgency of the situation and arrest further decline. We are confident that if exporters are provided some support and understanding, we can get non-oil exports back on the path of rapid growth which will not only be beneficial to the exporters but also the Nigerian economy through massive job creation and increased foreign exchange reserves which are two of our biggest challenges today”.

The lubricants sub-sector of the economy has been described by experts as the salient but core area of the downstream industry that is complementary to the fuel business. They are technology-driven products with value-addition to one of the refined by-products called base oil. But stakeholders worry that despite the obvious contribution and potential to the nation’s economy, Nigerian lubes market is also a dumping ground for sub-standard and off-specifications imported lubes of questionable quality.

They contend that these infractions are indeed a threat to the survival of the lube manufacturers in Nigeria. At the 1st Nigerian Lubricants Summit organised by the Lubricant Producers Association of Nigeria (LUPAN) entitled: “Nigerian Lubricants Industry: Opportunities and Challenges,” which was held in Lagos recently, lubricant manufacturers agree that there was the need for the government to re-stream and approve the existing base-oil unit at the Kaduna refinery and petrochemical plant for new refineries to use the heavy crude oil sand reserves for 100 per cent sourcing of base oil.

-Recently the body saddled with exports promotion in Nigeria, The Nigerian Export Promotion Council (NEPC) identified 13 National Strategic Export Products (NSEPs) to replace oil in an effort to diversify the nation’s revenue base. Afolabi Idowu writes on the stakeholders’ views on the urgent efforts needed to be taken for effective and maximum generation of revenue from the export products

%d bloggers like this: