Despite the federal government’s promise to diversify Nigeria’s economy from over dependence on oil exports to other non-oil exports, available data has shown that the nation is still a mono economy that is heavily dependent on crude oil exports as the major foreign exchange earner.
It would be recalled that President Bola Ahmed Tinubu while unveiling his campaign manifesto in different fora emphasised his commitment to diversify the Nigerian economy and create wealth for the development of the nation.
Tinubu noted that Nigeria is sitting on a gold mine with abundant natural resources, adding that with strategic investment in research and development and effective management the nation can explore these resources to the fullest. His predecessor, Muhammadu Buhari also made a similar pledge throughout his eight-year tenure.
However, available statistics obtained from the National Bureau of Statistics (NBS) still showed that without crude oil sales, Nigeria’s economy may crumble.
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Oil exports dominate 2023
A breakdown of Nigeria’s exports in 2023 by Daily Trust showed that non-oil export performance was just a fraction of total exports as oil exports constituted over 80 per cent of total export.
For instance, in the first quarter of 2023, Nigeria recorded N5.14 trillion from crude oil sales, which showed an improvement from the N4.9 trillion realised in the last quarter of 2022.
In the first quarter of 2023, crude oil exports accounted for 79.37 per cent of Nigeria’s foreign trade while non-oil exports accounted for a paltry N652 billion in the first quarter of 2023.
Similarly, in the second quarter of the year under review, foreign trade statistics released by the NBS showed that total exports stood at N7.01 trillion, about 15 per cent increase from almost N6 trillion recorded in the first quarter. Also, total imports amounted to N5.72 trillion.
Exports trade in the second quarter of 2023 was dominated by crude oil exports valued at N5.58 trillion, accounting for 79.63 per cent of total exports, while non-crude oil exports value stood at N1.42 trillion or 20.37 per cent of total exports.
A further analysis showed that exports trade by region in Q2, 2023 indicated that Nigeria exported most products to Europe with goods valued at N3.160 trillion followed by exports to Asia valued at N1.728 trillion.
Exports to America were valued at N1.372 trillion, while exports to other African countries stood at N747.84 billion of which N425.74 billion worth of goods were exported to ECOWAS countries.
Subsequently, in the third quarter of 2023, oil exports according to the NBS made up 82.50% of Nigeria’s foreign trade.
During the third quarter of 2023, the majority of Nigeria’s export trade was dominated by crude oil exports valued at N8,535.61 billion, making up about 82.50% of the total exports during that period.
Specifically focusing on crude oil exports in Q3/2023, they stood at N8.535 trillion, indicating a substantial increase compared to the value recorded in Q2. However, non-oil products contributed N677.57 billion or 6.55% of total exports.
Insufficient exports behind forex crisis
Consequently, the inability to harness non-oil exports to shore up the country’s foreign exchange has made it difficult for the Naira to stabilise.
The naira has been fluctuating between N1,000 to N1,400 at the parallel market following the unification of foreign exchange at the Investors and Exporters’ window by the Central Bank of Nigeria (CBN).
Experts say as long as the country keeps relying on crude oil for foreign exchange, no significant progress can be made.
The Nigerian National Petroleum Company Limited (NNPCL) has mechanically completed the Port Harcourt refinery and also assured that by the end of 2024, both Kaduna and Warri refineries will also be active with the hope that fuel importation would reduce.
Also, the Dangote refinery management team said it has commenced refining activities.
On the non-oil exports, the Nigerian Export Promotion Council (NEPC) has identified poor packaging and proper certification as the major challenges.
For instance, during the tenure of Audu Ogbeh as Minister of Agriculture, Nigerian yam exported to Europe was rejected as it was discovered that it has gone bad upon arrival at its export destination
This is among many other non-reported cases of export rejection.
The federal government had set up a task force last year in Europe, headed by former Executive Director of the NEPC, Dr. Ezra Yakusak to uncover why Nigerian products were rejected in the region. However, not much was heard about the discovery as well as the implementation of the resolution.
Reacting to the issue, a development expert at the Abuja Chamber of Commerce and Industry, Joseph Momoh said the federal government must step up its efforts in promoting non-oil export in the coming year
He said, “Non-oil export is the new oil, however the entire value chain needs urgent attention from the infrastructure, to addressing delays at the ports as well as creating an enabling environment for exporters
“Also, the NEPC, which is in charge of promoting non-oil exports, I expect that the cases for export rejects and certification will be full addressed. This can be done by eliminating sharp practices and promoting awareness of how a well packaged product can be sold outside the shores of Nigeria,” he explained.
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