Oil Still Accounts for 92% of Nigeria’s Earnings — Investigation

• Oil Still Accounts for 92% of Nigeria’s Earnings

Despite the efforts of the Federal Government to diversify the economy away from oil to non-oil sector, receipts from oil and gas sector still account for a huge chunk of the country’s total exports’ earnings, an investigation has revealed.

An analysis of the foreign trade statistics obtained from the National Bureau of Statistics revealed that out of the total export earnings of N3.1tn for the second quarter of this year, oil and gas accounted for N2.43tn, while the non-oil sector accounted for the balance of N670bn.

A breakdown of the export earnings showed that petroleum oil and oil obtained from bituminous minerals generated the sum of N2.42tn, representing 78.18 per cent.

This was followed by natural and liquefied gas with N412.49bn or 13.3 per cent, other petroleum gases with 1.16 per cent, and other liquefied petroleum gases and gaseous hydrocarbons, N19.63bn.

A further analysis of the report showed that the country earned N17.81bn from naphthalene; N16.59bn from propane; N13.52bn from cashew nuts; N12.51bn from medium petroleum oil; N10.29bn from butanes and N10.14bn from urea.

In the same vein, the sum of N9.62bn was received as export earnings from cigarettes; N9.41bn from electrical energy; N8.33bn from cocoa; N7.02bn from sesamum seeds and N4.16bn from kerosene jet fuel.

In terms of countries where these products were exported to, the report showed that India accounted for the highest amount with N519.7bn, followed by Spain, United States and Netherlands with N374.4bn, N317.09bn and N241.2bn, respectively.

France followed with export value of N224.88bn; Italy, N88.4bn; Indonesia, N107.49bn; Canada, N90.06bn; Togo, N158.14bn; and South Africa, N137.3bn.

Speaking with our correspondent in an interview on the sidelines of a workshop on revenue generation in Abuja, the Acting Chairman, Revenue Mobilization Allocation and Fiscal Commission, Shettima Abba-Gana, said the commission was putting in place strategies to enable the country to generate more revenue from alternative sources such as solid minerals, public-private partnerships, tourism and agriculture.

He said the decline in allocation from the federation account by over 30 per cent had made it imperative for the commission to assist states to increase their Internally Generated Revenue.

He said while some states had made efforts at increasing their IGR to a level up to the amount they were getting from federation account, others were yet to make such efforts.

He explained that there was a need for government at all levels to show serious commitment to providing the necessary and required enabling environment for the full exploitation of the potential of the agricultural (cultivation of commercially viable produce), solid minerals and tourism sectors.

Abba-Gana said, “We have a resilient economy that despite the drop in revenue by one third, things are still going on although with difficulty; and we are improving.

“Some states have now been able to raise the Internally Generated Revenue to a level that is enough to pay their salaries. And the others are also catching up. There is an increase in interest by the states to raise their IGR and to diversify.

“Some states are already generating the same amount that they receive from the federation account and we must commend those states.

“But what we want is that other states should also improve on their IGR and grasp the opportunities of the diversification programme in the areas of agriculture, solid minerals and tourism.”

He added, “Every state in Nigeria has solid minerals and what needs to be done now is to get them to create employment, economic growth and generate revenue.”

The Executive Director/Chief Executive Officer, Nigeria Export Promotion Council, Mr. Segun Awolowo, said if the country could effectively key into the zero-oil plan of the agency in taking advantage of the opportunities in the agricultural sector, there would not be any need to depend on oil revenue for survival.

Through the plan, he said the NEPC had identified 22 priority countries as markets for Nigerian products while 11 strategic products with high financial value had also been identified to replace oil.

These products were listed as palm oil, cashew, cocoa, soya beans, rubber, rice, petrochemical, leather, ginger, cotton, and Shea butter.

He said the volatility in the oil market had made it imperative for the government to look inwards, adding that Nigeria could no longer depend solely on oil revenue for the implementation of government’s programme.

For instance, the NEPC boss said between 2014 and 2016, the country recorded a total oil revenue shortfall of $40bn.

He said in 2014, the country earned $70bn from crude oil, adding that oil receipts dropped to $40bn and $30bn in 2015 and 2016, respectively.

He said as a result of the volatile nature of the oil market, the country could no longer depend on such commodity, hence the need to partner Nigerians in the Diaspora to diversify the economy.

He said, “In 2014, we had $70bn from oil; in 2015, it was $40bn; and you can see that we had a shortfall of $30bn.

“In 2016, it was about $30bn; and so we can see that the challenge is not on really the demand for foreign exchange but the supply of foreign exchange. We are targeting manufacturing and industry so that we can produce and export more.”

He expressed optimism that the plan could have achieved better results if all stakeholders had collaborated with the NEPC, noting that the ultimate goal of the agency was for Nigeria to survive in a world where it would no longer sell oil.