Utilizing non-oil exports to diversify Nigeria's revenue

It is no longer news that oil price shocks have negatively impacted the country's revenue over the years.

The dwindling revenue from oil was compounded by the coronavirus pandemic, hence the managers of the economy had to creatively think of how to boost the country's revenue for growth and development.

The federal government soon realised that a robust non-oil export base was no longer a policy choice: it had to rapidly grow its non-oil exports.

Remarkably, Nigeria's non-oil exports increased by 14 per cent to N2.07 billion in 2020 from N1.74 billion achieved in 2019.

The data released by the Nigerian Export Promotion Council listed some of the major non-oil export products as cocoa beans, sesame seeds, cashew nuts and urea.

Others are: aluminum ingots, finished leather, soya bean meal, cocoa butter, processed frozen shrimp and crabs, among others.

This shows that non-oil exports have the potential to stimulate the growth of the Nigerian economy, if properly harnessed.

Indeed, the federal government had introduced different agricultural schemes to support the nation's diversification agenda.

Some of these schemes were: the Agricultural Credit Scheme Fund (ACGSF), Agricultural Credit Support Scheme (ACSS), Commercial Agric Credit Scheme (CAC), the Anchor Borrowers Programme and the implementation of the N50 billion Export Expansion Facility Programme.

With Nigeria eventually signing the African Continental Free Trade Area (AfCFTA) on Nov. 11, 2020, it become imperative to strengthen the country's non-oil exports in order to harness the AfCFTA.

The agreement, which establishes a single market for goods and services across 54 countries, allows free movement of business travellers and investments, and creates a unified customs union to streamline trade on the continent.

Dr Adesola Adeduntan, Chief Executive Officer, FirstBank, believes that AfCFTA is a veritable platform for Nigeria to position itself appropriately to become Africa's export hub.

According to him, the non-oil sector holds tremendous value and opportunities for the country to enhance job and wealth creation, foreign exchange earnings and gross domestic product (GDP) growth.

"This can be achieved considering our population, resources and economic size.

"At FirstBank, we have been at the forefront of driving economic growth, and we will use our reach, and connection to orchestrate growth in the non-oil sector," he said.

Adeduntan said to drive the goal, the bank had created an Export Desk to support the needs of exporters, including designing export products and solutions to cater for pre and post export financing and services.

Adeduntan said the bank would continue to demonstrate support for the sustainable revenue drive in growing the economy by creating nimble product and service offerings for export trade services cutting across agriculture, structured trade and commodity financing and treasury.

In line with that mandate, First Bank of Nigeria Ltd. recently convened a non-oil export webinar, the first of its kind.

The webinar series had the theme: "Building Sustainable Non-Oil Export in Nigeria; Harnessing Opportunities within the AfCFTA Treaty & Agro Commodities."

Participants at the webinar deliberated on the opportunities that would enhance the country's drive towards diversifying the economy, thereby reducing reliance on oil.

Adeduntan assured the participants that the bank would leverage its vast experience in supporting trade businesses, especially the Small and Medium Enterprises (SMEs) to support the federal government's efforts to diversify the revenue base of the economy.

Dr Biodun Adedipe, Chief Consultant, B. Adedipe Associates Ltd., agreed with Adeduntan that the country needed to change its orientation to an export-led growth or import substitution economy.

Adedipe noted that the world that Nigeria operated in pre-COVID-19 pandemic was fast disappearing, stressing the need to give more attention to the country's non-oil export industry.

According to him, there is a need to build supporting infrastructure to aid export business, as deliberately done by China to boost economic growth.

He added that aggressive targets should be set and rigorous measures implemented.

"If Nigeria does not act, other countries will act on us," Adedipe said.

Commenting, Dr Ezra Yakusak, the Chief Executive Officer, Nigerian Export Promotion Council (NEPC), said the council developed the zero oil plan in 2016 as a strategy to shore up foreign exchange through the non-oil sector.

Yakusak added that following the crash in international crude oil prices, the Zero Oil Plan was developed leveraging AfCFTA in response to the recession in 2016 in preparation for a world in which crude oil is less relevant.

He said the Zero Oil Plan was a strategy to boost foreign exchange through the non-oil sector by rolling out export policies for 22 major products that could generate up to 30 billion dollars foreign exchange in a year.

He added that the plan entailed the commencement of export projects and investment tracking in each state of the federation as part of the One State One Product (OSOP) scheme.

Yakusak, represented by Mr Folorunsho Akintunde, Deputy Director, NEPC, said through the plan, an export policy for 22 major products that could generate 30 billion dollars annually was evolved.

According to him, the council is preparing and positioning SMEs for AfCFTA through various trainings, programmes and incentives.

He said the NEPC was working closely with Afrexim Bank and ITC, to ensure that Nigeria was ready for AfCFTA, especially on the Export Trading Company.

Also, Comptroller Malanta Yusuf, Custom Area Controller, Apapa, advised exporters to familiarise themselves with items allowed to be exported and those on prohibited lists.

He also advised them on clear description of goods and proper packaging to facilitate acceptance of goods.

Also speaking, Mr Eric Intong, Regional Chief Operating Officer, Anglophone West Africa, Afreximbank, said the bank developed various products, programmes, and initiatives to boost intra-African Trade.

Intong said to support AfCFTA, the bank would spend 40 billion dollars in intra-Africa trade and investment financing in the next five years, twice the amount disbursed for the same purpose in the last four years.

It is expected that initiatives such as FirstBank's webinar series and massive support by the private sector would boost stakeholders' interest in non-oil export and birth new sources of revenue for the overall wellbeing of Nigerians.