Nigeria recorded a very poor performance in the export sector in 2015 as the country’s non-oil export receipts from the Economic Community of West African States (ECOWAS) fell by a whopping 56 percent at the end of last year.
According to data compiled by Cobalt International Services, the non-oil export revenue of Africa’s biggest economy and oil producer from ECOWAS, fell from $350.86 million in 2014 to $154.47 million in 2015.
This is bad news for Nigeria whose biggest export market is ECOWAS and also worse that the country’s premium commodities/products in the region such as tobacco, footwear, plastics, salt, beverages, lime and cement, lost their grip to Asian’s throughout last year.
Exporters say the result of this quarter could be worse, given the harsher operating environment facing exporters, farmers and manufacturers, as well as government’s silence of the Export Expansion Grant (EEG) and exporters’ negative attitude to the CBN’s policy of foreign exchange repatriation.
“The whole thing is still hinged on the Export Expansion Grant (EEG),” Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group (MANEG) told BusinessDay.
“Study the non-oil export receipts since the EEG was suspended in August 2013 and you will appreciate what I am saying. What this means is that since EEG’s suspension, exporters could no more compete. Once you destabilise a scheme that helps to make non-oil export products competitive in the global market, you will see some ripple effect,” Oyelola said.
Oyelola said there is also increase in barriers within the region, which is also stalling free movement of goods.
Nigeria’s non-oil export to ECOWAS in 2013 was $375 million. But this fell to $350.8 million in 2014 and $154.47 million in 2015.
The total non-oil export earnings fell from $2.71 billion in 2014 to $1.10 billion by the end of 2015, indicating a 59 percent drop. When compared with $2.97 billion earned in 2013, this will represent a 63 percent drop.
The 2013 figure represented a 14 percent rise from $2.56 billion earned from non-oil exports in 2012.
According to Jon Kachikwu, exporter and chairman of the Small and Medium Scale Group of the Lagos Chamber of Commerce and Industry (LCCI), part of the problem being faced in the export sector may be attributed to the CBN policy on forex repatriation.
Kachukwu, CEO of Jon Tudy Interbix, said most exporters now feel reluctant to find new markets, as the CBN insists on giving them the official rate (197-N199 for ever dollar) when they repatriate forex, even when the current market price is much higher (N320 for one dollar).
Nigeria, with a population of almost 180 million and GDP of over $500 billion, needs foreign exchange desperately, as oil receipts nosedive, owing to the crash in oil prices.
President Muhammadu Buhari believes he can diversify the economy and export more agricultural, solid minerals and manufactured products, but some experts are sceptical that with the harsh economy and almost zero plan for export, the country’s hope of achieving this could hit the rocks.
Manufacturing currently contributes 9.2 percent to the GDP, while agriculture and mining make 22 percent and 0.34 percent to the country respectively.
Ede Dafinone, an exporter of crumb rubber, said the situation may go from bad to worse, except the government resuscitates the EEG scheme and the Customs begins to accept the Negotiable Duty Credit Certificates to boost export.
Dafinone, who is the CEO of Sapele Integrated Industries Limited, said the uncertainty in the scheme which has been suspended eight times since 2005 when it was started, cannot support the growth of export.
Data show tobacco export fell 62 percent to $37.73 million in 2015, as against $99.58 million in 2014.
Receipts from footwear fell 38 percent to $13.5 million in 2015, from $21.79 million in 2014.
Plastics and articles’ export value nosedived 49 percent to $11.18 million in 2015, as against $21.79 million in 2014.
More so, export receipts from soap, waxes, scouring products, candles, remodelling plates and dental waxes crashed 64 percent to $7.04 million as against $19.82 million in 2015.
Jaiyeola Olarewaju, executive secretary, Organised Private Sector Exporters Association (OPEXA), said it is paradoxical that one sector that has the potential to cushion the commodity shock has been paralysed due to lack of support and inter-ministerial coordination.
ODINAKA ANUDU
