Nigeria Export-Import Bank (NEXIM) has disclosed that Nigeria lost N3.6 trillion, an estimate of $10 billion for failing to export cash crops like cocoa, oil palm, cotton and groundnut.
The disclosure was made by the Managing Director/Chief Executive Officer, Nigeria Export-Import Bank, Mr Abubakar Bello, at a finance conference in Lagos.
[READ MORE: NAHCO supports FG to boost IGR on food export]
The Details: Bello stated that Nigeria’s non-oil exports currently stand at 13.17%, declining from 97% from the time of Nigeria’s independence. He blamed the shift from non-oil export to heavy reliance on oil export on international oil price and Nigeria’s production.
“In the immediate post-independence period, non-oil exports, which were mainly agricultural commodities and solid minerals, made up 97% of Nigeria’s exports. Crops like cocoa, cotton, palm oil, palm kernel, groundnut and rubber were major export commodities. However, between 1970 and 1974, non-oil exports dropped from 43% to 7% due to a rapid increase in the international oil price and Nigeria’s production,” Bello said.
The level of the decline: Bello noted that Nigeria’s non-oil sector had failed in contributing a significant number of total exports to Gross Domestic Product. The non-oil sector dropped from 31.44% in 2012 to 10.63% in 2015, before rising to 13.17% in 2017, representing a below global average export to GDP of about 30%, according to World Bank data.
Bello outlined the various challenges facing the non-oil sector. He characterized them as funding, policy constraints, operational issues, dearth of efficient multimodal logistics system as well as quality and standardisation.
What you should know: Despite the decline, Nigeria is being regarded as “one of the highest producers of these commodities, according to data from the Food and Agricultural Organisation. Although the sector is characterised by insignificant contribution of agricultural sub-sectors like shea, ginger, cassava, yam, sweet potato, cowpeas and pineapple to export revenues.
What this means: Nigeria’s huge reliance on oil has adversely affected its fortune, which is why the Agricultural sector is still growing at a slow rate. It has also contributed to the neglect and lack of investments in the other export sectors, particularly value-added export.