As the world continues to recover from the COVID-19 pandemic, Nigeria has recorded steady growth in the non-oil sector with the Nigerian Export Promotion Council (NEPC) recently announcing a significant growth in non-oil export of N1.77 trillion in the first six months of this year.
This analysis dissects the new milestones amidst calls for diversification from oil exports.
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NEPC stated that a total of 4,146,534 metric tons of product worth N1.77trn ($2.593 billion) were exported between January and June 2022.
Last month, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, sounded the alarm after her disclosure that the country’s debt service cost in the first quarter (Q1) 2022 was N1.94trn, N310bn higher than the actual revenue received during the period.
The revelation by the minister clearly indicated that the federal government’s revenue, which is heavily dependent on proceeds from oil sales, can no longer be sustained, hence the need for an aggressive pursuit of alternative sources of income from the non-oil sector.
The economic crisis got the better part of Nigeria as the second quarter Gross Domestic Product (GDP) report released at the weekend showed a growth of 3.54% (year-on-year) in real terms with a growth rate decline of 1.47 per cent from the 5.01% reached in the same period in 2021.
However, the National Bureau of Statistics (NBS) report indicated that the non-oil sector is a force to reckon with as it contributed 93.67% to the economy during the period of April to June 2022.
The non-oil sector’s 93.67% contribution is higher than the 92.58% recorded in Q2 2022 and higher than the 93.37% in Q1.
This sector in the second quarter of 2022 was mainly driven by activities in the Information and Communication (Telecommunication) sector; Trade; Financial and Insurance (financial institutions); Transportation (road transport); Agriculture (crop production) and Manufacturing (food, beverage & tobacco), all accounting for positive GDP growth.
How export surged by 62% in H1
The latest figure of N1.77trn represents (62.37 per cent increase) as against the sum of $1.59bn for the first half year in 2021 and 2020 which stood at $981.442 million respectively.
These figures, which are culled from Pre-shipment Inspection Agents (PIAs) returns to the NEPC, indicate that the January–June 2022 export performance is the highest half year non-oil export performance since 2018.
A month-by-month breakdown of the value of goods exported show that in January, Nigeria exported 668,618.21 metric tons of products worth $431.379m, in February the country exported over 788,000 metric tons of goods worth $377.059m. In March, 820,800.83 metric tons were exported worth $440.958m.
Similarly, in April, 530,781.91 metric tons worth $405.469m were exported while in May, 580,556.80 metric tons were exported at $446.665m and in June 757,039.04 metric tons were exported at $491.751m.
Products exported
Further checks by Daily Trust on Sunday show that over 200 different products ranging from manufactured, semi-processed, solid minerals to raw agricultural items were reported to have been exported in the period under review.
According to the PIAs’ report, manufactured products topped the list of exports with 36.28%, followed closely by raw agriculture products with 33.35% while precious stones had 13.22% and others 17.15%.
Furthermore, of the top 15 exported products in the first half year of 2022, urea/fertiliser recorded 32.49% of total export while cocoa beans, sesame seed and aluminium ingots contributed 12.65%, 7% and 5.07% respectively within the same period with over 572 companies participating in exporting Nigerian products in the period under review.
Expanding beyond Africa
Further analysis on the first half of 2022 on non-oil export report shows that during the period under review, different Nigerian products were exported to 112 countries. Some of these products were exported to the US, Asia, Europe, Oceania regions and Africa.
Of these countries, Brazil, United States of America (USA) and India were the top three export destinations based on the value of imports.
Worthy of note is that out of the top 10 export destinations of Nigerian products, none is an African country. Only Benin and Niger Republics made it to the top 15.
In the first half of 2022, 16 exit points were used in exporting non-oil goods from Nigeria. These exit points included sea-points, international airports and land borders. Most exit points in the South West and South South, comprising mainly seaports, accounted for over 90% of the total value of exports.
What we’re doing to boost export – NEPC
Reacting to the development, the Executive Director/CEO of NEPC, Dr. Ezra Yakusak, attributed the growth to the ease of doing business of the federal government as the council, during the first half year of 2022, registered 2,000 companies under its fully automated online application platform.
Speaking further, he said the “Go Global, Go for Certification campaign aimed at stimulating the export of high-quality products from Nigeria that meet the requisite international standards in terms of quality and certification of Made-in-Nigeria products cannot be over-emphasized.
Yakusak added that, “In a bid to reduce the incidences of Export Rejects, the NEPC is working assiduously with the Federal Ministry of Industry, Trade and Investment among other relevant MDAs to end the rejection of Nigeria’s products in the international markets. He also said a Technical Committee on Export Rejects is due to submit its report to the minister.
The NEPC boss further emphasized that the Domestic Export Warehouse (DEW) is one of the key export intervention projects of the council designed to provide best practices in storage, fast-track logistic solutions, and efficient and seamless documentation process, all of which are very important in ensuring timely delivery of exportable products to importers and also a critical factor in complying with export orders.
He said the council established the Export Trade Houses with three already operational in Cairo in Egypt, Lome in Togo and Nairobi in Kenya respectively.
Yakusak said the trade house is targeted at increasing Nigeria’s international market share and growth, enhancing the visibility of Nigerian products as well as increasing foreign exchange inflow and creating employment for the teeming youths.
He added that plans are underway to establish another trade house in Dubai, United Arab Emirates, which is being executed under a Public-Private-Partnership (PPP) scheme.
The NEPC boss was hopeful that with N375 billion approval by the Federal Executive Council (FEC) as Export Expansion Grant for exporters, Nigeria should expect a further surge in non-oil export growth.
