Nigeria’s Non-Oil exports earnings fell by 24 per cent, year-on-year, YoY, to $4.46 billion in nine months to September 30th 2023, defying various efforts of the government to enhance this critical source of foreign exchange. The figure was $5.88 billion in the corresponding period of 2022.
While the Central Bank of Nigeria, CBN, blamed the decline on lower commodity prices in the global market, experts however, attributed the decline to cancellation of non-oil export focused policies by the new government.
Vanguard findings from the quarterly economic reports of the apex bank also showed a steady decline in Non-Oil exports on a quarterly basis.
In the first quarter, Q1’23, Non Oil exports fell by 11.8 per cent, quarter-on-quarter, QoQ, to $1.72 billion from $1.95 billion in Q4’22. The decline continued in the second quarter, Q2’23 by another 2.3 per cent, QoQ to $1.68 billion. Non Oil exports further declined by 3.5 per cent, QoQ to $1.06 billion in Q3’23.
Consequently, quarterly earnings from Non Oil exports fell by $890 million in nine months to $1.06 billion in Q3’23 from $1.95 billion in Q4’22.
As a result, the share of Non-Oil exports in the nation’s total export fell to 7.7 per cent in Q3’23, representing a 5.7 percentage points decline from 13.4 per cent in Q4’23.
Commenting, a renowned economist, Marcel Okeke, said the decline in non-oil export earnings should be expected given the cancellation of policies to encourage repatriation of non-oil exports as well as recent forex reforms of the CBN.
Okeke, who is also former Chief Economist of Zenith International Bank, Plc, said; “The change in government led to so many changes in policies that drive all business activities, including non-oil export. For instance, the new President Tinubu administration practically threw away the baby with the bath water, when it stopped the CBN’s Race to $200 billion, RT200, under which the apex bank set a target of having about $200 billion repatriated from non-oil export within a time frame of two to three years.
“The new leadership at the CBN cancelled this initiative without any replacement. So, for upwards of six months now, there’s hardly any industry initiative to encourage non-oil export. It’s individual banks that are doing their thing in their silos.
On his part, Nnamdi Nwizu, Co-Founder, Comercio Partners Limited, an investment banking firm, said that the decline in Non Oil exports reflects a confluence of challenges that have persisted despite concerted efforts to stimulate growth.
Highlighting the challenges, Nwizu said: “One significant factor contributing to this decline is the presence of structural impediments within the Nigerian economy. Insufficient infrastructure, including transportation and logistics networks, hinders the efficient movement of goods and increases transaction costs for exporters.
“Moreover, regulatory bottlenecks and bureaucratic complexities persist, creating obstacles for businesses seeking to navigate the export process. In some cases, these challenges may discourage potential exporters or slow down the exportation process, affecting the overall performance of the non-oil sectors”.
“Simultaneously, there should be a focused effort to streamline and simplify export-related regulations and bureaucratic processes to make them more business-friendly.
On the international front, fostering diplomatic relationships and engaging in trade negotiations can open new markets and increase demand for Nigerian exports.”