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How Nigeria recorded its highest non-oil exports ever in 2019

Nigeria recorded a total export revenue of $10.4 billion in 2019, the highest since 2008 which is farthest we can trace Nigeria’s export data.

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NDDC, Cash transfer, President Buhari, non-oil Exports, oil revenue, export revenue, FG Waives import duties for medical supplies, Orders Customs to expedite clearing, Presidency faults report on Kyari as Buhari didn’t cancel memos, appointments approved by him

Nigeria recorded total export revenue of $10.4 billion in 2019, the highest since 2008 which is farthest we can trace the country’s export data. According to the data from the CBN, total exports (Free on Board “FOB”) in 2019 was $64.9 billion. Thus for the first time ever, oil revenue as a percentage of total exports fell to 83.9% as against over 90% in previous years.

A big jump: Non-oil exports, which are considered a priority for the Buhari-led government, jumped over 100% from $4.6 billion to $10.4 billion. Non-oil exports typically averaged $4.7 billion in the last 11 years and hit its highest in 2013 when it stood at $7.2 billion. But as they say, you need to dig deeper to see the facts behind the figures.

A deep dive into the data revealed that a huge component of Nigeria’s non-oil export figures were “re-exports”. Note that re-exports is an economic term for items that were previously imported into a home country and then re-exported to other countries. By definition, re-exports are all imported goods (other than goods declared in transit or transshipment) which are subsequently re-exported. A good illustration is when Company A imports some products into Nigeria and then carried out further processing on them before exporting them to Ghana and other African countries. This often occurs when countries try to avoid trade barriers or duties.

(READ FURTHER: Nigeria faces breaking point as India’s global crude oil demand drops by 70%)

Re-Export data: Nigeria’s re-export data for 2019 was about $6.2 billion, contributing to about 60% of total exports. This was about 4 folds higher than the $1.5 billion reported in 2018 and $280 million reported in 2017. Data from the National Bureau of Statistics provides better insight into the makeup of Nigeria’s re-export and which countries we exported to.

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Examples of some of the items re-exported include vessels and floating structures to Ghana for N302 billion, floating and submarine drilling to Cameroon for N65.5 billion etc. Some exported items went to Western countries such as the US, Spain, Argentina etc. For example, Aeroplane Parts and Helicopters were re-exported to Canada and Ghana respectively.

READ MORE: AfCFTA forces FG to revamp port infrastructure to avert trade loss 

Why this matters: In an era were African governments have agreed to sign the AFCFTA, imports into member countries of the African Union will need to become more scrutinized. This is important towards avoiding sharp practices. For example, goods could easily be exported into neghbouring Benin Republic from The Netherlands, and then re-exported into Nigeria at a cheaper cost, thereby diverting earnings that could have gone to the government from import duties.

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It could also significantly affect locally made goods by inhibiting their ability to improve on design and quality if left to compete with superior imports.

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

1 Comment

1 Comment

  1. Anonymous

    April 10, 2020 at 3:48 pm

    Very good point there about sharp practices we could see with AFCFTA

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ENDSARS

#EndSARS: Police did not shoot protesters – IGP Adamu

The IGP has said that police officers acted professionally and exercised commendable restraints during the #EndSARS protests.

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The Inspector-General of Police, M.A Adamu, has said that officers of the Nigeria Police Force acted professionally and exercised commendable restraints during the protests, in a response to Amnesty International about police firing at protesters.

The IG disclosed this in a statement on Friday morning, saying reports on the shooting of protesters is not true.

What you should know

Amnesty International released a report on the 21st of October, 2020, saying it has confirmed “that the Nigerian army and police killed at least 12 peaceful protesters yesterday at two locations in Lagos. The killings took place in Lekki and Alausa, where thousands were protesting police brutality as part of the #EndSars movement.”

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President Muhammadu Buhari also disclosed last week that 51 civilians, 11 Police officers, and 7 soldiers have been killed in the unrest.

The IGP said today that, “Officers of the Nigeria Police Force acted professionally, exercised commendable restraints and some paid the supreme price for peace during the recent protests and ensuing violence in some parts of the country.

“The Amnesty Int’l report is untrue, misleading, and contrary to all available empirical evidence.

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“Even when the protests turned violent in some parts of the country, the officers still maintained utmost restraint and did not use excessive force in managing the situations.”

The IG added that 22 Police personnel were killed by hoodlums, with many more injured and that 205 police stations were attacked.

“Available reports show that twenty-two (22) police personnel were extra-judicially killed by some rampaging protesters and scores injured during the protests. Many of the injured personnel are in life-threatening conditions at the hospital.

“Two hundred and five (205) police stations and formations including other critical private and public infrastructure were also damaged by a section of the protesters,” he said.

The IG said Amnesty International failed to pay tribute to police officers who lost their lives in the violence and accused the organization of “discriminatory tendencies.”

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Corporate Press Releases

LivingTrust Mortgage Bank posts N192 million in Q3 2020

The improved result was driven by an effective mix of revenue optimization and cost minimization strategies by the management and the Board of the company.

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LivingTrust Mortgage Bank has announced its unaudited third-quarter 2020 financial results, which showed an impressive performance, as revenue went from N120 million in Q3 2019 to N192 million Q3 2020.

This information is contained in the LivingTrust Mortgage Bank unaudited third-quarter 2020 financial results.

The company reported an impressive leap in profits in the third quarter of 2020, as profit after tax increased from a meager N3.34 million in the third quarter of 2019 to an impressive N71.43 million in 2020; the company witnessed improvement in its operations, owing to an effective mix of revenue optimization and cost minimization strategies by the management and the board of the company.

READ: First Bank is cutting inefficiencies and focusing on its strengths

What you should know

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  • LivingTrust Mortgage Bank’s turnover was N191.72 million, compared to N120.20 million in the third quarter of 2019.
  • The Mortgage Bank’s profit after tax was N71.43 million, compared to N3.34 million in the third quarter of 2019.
  • The increase in profit after tax was largely driven by interest Income From Mortgage Loans And Advances
  • To Customers, which increased from N119 million to 170 million.
  • The total assets of the company increased from N4.6 billion as of the last day of business in 2019 to N5.3 billion as of 30 September 2020.

READ: Access, GTBank, two others pay PWC & EY N1.5 billion as Audit fees in H1 2020 

Operational Review

Despite prevailing economic headwinds and the tight regulatory framework of the economy, LivingTrust Mortgage Bank continues to show sustained growth in key segments driven by strategic positioning of the business in Osun State.

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LivingTrust Mortgage Bank is headquartered in Osun State where it operates from 3 branches with desk offices in Lagos, Akure and Abuja. The new strategies deployed by the management and the board of the company yielded huge gains for the company since the beginning of the year.

This is obvious in the improved performance of the company in Interest Income From Mortgage Loans And Advances To Customers, during the period.

READ: UPDATED: Nigeria’s GDP contracts by 6.10% in Q2 2020, as critical sectors plunge

What they are saying

In a note by the management of the company commenting on the result, it was stated that: “Living Trust Mortgage Bank Plc achieved this result under a new management, led by Adekunle Adewole as the Managing Director, which came on board in May, this year, and Alhaji Adebayo Jimoh-led board of directors.”

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The bank which was hitherto known as Omoluabi Mortgage Bank Plc also rebranded and became known by its present name.

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The bank further said, “Our recent achievement are fallouts of the strategies introduced by the new management, to ensure that the bank effectively discharges its commitments to its growing customer base.

“Our recent rebranding also contributed to our feat, as it became necessary for us to adopt an image which correctly reflects our current outlook and strategic focus.”

READ: C&I Leasing gets approval to list N539 million worth rights issue 

The bank’s management was recently overhauled, while its board of directors was also reconstituted, following the acquisition of majority shareholding in it by Cititrust Holdings Plc.

According to the bank, with the increasing cultural diversity of its fast-growing customer base, it became necessary for it to adopt an image that correctly reflected its current outlook and strategic focus.

The bank added that the name change is also a reflection of its corporate transformation plan, which primarily aims at delivering superior quality products and services to all customers, regardless of their status or location.

READ: Devaluation: Nigeria’s current account deficit rises again

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About Adewole Adekunle

The new MD, Mr. Adewole Adekunle, is a banking professional with over 2 decades of experience cutting across areas like retail, commercial, corporate banking, corporate strategies, and credit recoveries.

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He served in various positions in Omega Bank (now Keystone Bank), Standard Trust Bank (now UBA), Broad bank (now Union bank), and Sterling Bank.

He has 2 MBAs in Marketing and Finance from the University of Ado-Ekiti and the Metropolitan School of Business and Management, UK. He also holds a Masters in Business Law and a certificate in Global Management (CGM). He is an Alumnus of Lagos Business School and INSEAD.

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Energy

Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices

Exxon Mobil announced it will slash its global workforce by 15% over the next two years, as it struggles to preserve dividends.

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Exxon Mobil to cut 14,000 jobs as pandemic hit oil demand, prices, ExxonMobil to Divest oil fields in Nigeria, Domestic oil companies

Exxon Mobil Corp on Thursday, October 30, 2020, announced that it will reduce its global workforce by 15% by the end of 2022 – an unprecedented culling by North America’s biggest oil explorer, as the coronavirus pandemic hits energy demand, prices, and struggles to preserve dividends.

The job cuts are expected to include 1,900 U.S. jobs – mostly in Houston, the headquarters for its US oil and gas businesses – as well as layoffs previously announced in Europe and Australia and reductions in the number of contractors, some of which have already taken place.

READ: Exxon Mobil, Chevron record their worst losses in history

READ: Presco Plc projects N24.53 billion turnover in Q4 2020

This was disclosed in a statement that was released by the energy giant on Thursday, October 30, 2020.

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The staff reduction is part of the latest effort by the Chief Executive Officer, Darren Woods, to curtail spending and halt the worst string of quarterly losses since Exxon assumed its modern form with the 1999 takeover of Mobil Corp.

READ: Chevron considers divesting from Nigeria, to focus on U.S Shale Oil

What you should know

Exxon and other oil producers have been slashing costs due to a collapse in oil demand and prices, as well as ill-timed bets on new projects. The Big Oil rivals of Exxon are also cutting thousands of jobs in response to the pandemic-induced demand slump. BP Plc plans to slash 10,000 jobs, Royal Dutch Shell Plc will cut as many as 9,000 roles, and Chevron Corp. has announced around 6,000 reductions.

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Norton said that Exxon’s workforce stood at about 88,000 people, including 75,000 in-house employees and about 13,000 contractors as of year-end 2019.

READ: Why the NNPC is being dragged to US courts by Exxon Mobil, Shell

Exxon’s job cut is a sign of its weakened financial position compared to its former status as the S&P 500 Index’s biggest company less than a decade ago, and a profit powerhouse used to ride out oil-price cycles.

This year’s downturn has been particularly damaging because it also affected refining, usually a cushion in times of low oil prices. Also, it came at a time when Exxon was already increasing borrowing to fund a large expansion program. The company was forced to retreat on these plans in April, reducing capital spending by $10 billion and delaying or scaling back most of the major projects.

READ: Exxon begins talks with domestic firms to divest businesses in Nigeria

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The stock has plunged more than 50% this year. Its dividend yield is now more than 10%, indicating that investors are anticipating a cut. Exxon maintained the quarterly payout on Wednesday and is expected to post its third consecutive quarterly loss when it reports earnings tomorrow.

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What they are saying

The Company in its statement said, “These actions will improve the company’s long-term cost competitiveness and ensure the company manages through the current unprecedented market conditions.’’

Exxon’s spokesman, Casey Norton, through an email said that the total reduction means the company will reduce its workforce by about 14,000 people, split between employees and contractors from year-end 2019 levels. The cuts will come through attrition, targeted redundancy programs in 2021, and scaled-back hiring in some countries.

READ: Google fired up, post strong advertising growth

What this means

Another set of job losses in the oil sector in Nigeria is looming. Nigeria is one of Exxon’s biggest operational bases in oil and gas exploration and production globally. Also, this is another setback after Shell announced 9,000 job cuts globally, which includes Nigeria, and the announcement by Chevron that it plans to reduce its staff strength in Nigeria by 25%.

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