- Non-Oil Exports: FG Lost $10b to Poor Funding, Others
The Nigeria Export-Import Bank (NEXIM) has said the country lost about $10 billion in the last five decades for not taking advantage of opportunities in crops such as oil palm, cotton, groundnut and cocoa.
Mr. Abubakar Bello, the Managing Director/Chief Executive Officer, NEXIM, stated this during a keynote address at a finance conference in Lagos.
He said, “It has been observed that Nigeria lost about $10bn export opportunities in crops like cocoa, oil palm, cotton and groundnut alone.
“In spite of the corrective measures over the years, the imbalance in our export trade has persisted with the non-oil sector now accounting for just about five per cent to seven per cent of Nigeria’s exports by value.”
Mr. Bello, who was represented by Mr Tayo Omidiji, the Head of Research, NEXIM, spoke on the conference’s theme, ‘Unlocking opportunities in Nigeria’s non-oil sector.’
According to the head of research, Nigeria’s non-oil export accounted for 97 percent of Nigeria’s exports in the 1960s but that number dropped immediately crude oil was discovered and currently stood at 13.17 percent.
He explained, “In the immediate post-independence period, non-oil exports, which were mainly agricultural commodities and solid minerals, made up 97 per cent 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 per cent to seven per cent due to rapid increase in the international oil price and Nigeria’s production.
“The ensuing Dutch Disease led to movement of resources out of the non-oil sector, contributing to its neglect and lack of investments in the erstwhile export sectors, particularly value-added export.”
He also noted that the country’s non-oil sector had been characterised by “systemic decline in the contribution of total exports to Gross Domestic Product, dropping from 31.44 per cent in 2012 to 18.44 per cent and 10.63 per cent in 2014 and 2015, respectively before rising to 13.17 cent in 2017.
“The figures from 2014 to 2017 have been below global average of exports to GDP of about 30 per cent, according to World Bank data.”
This, he attributed to poor funding, policy constraints and other issues like quality and standardisation.
He added that all these happened despite the nation being “one of the highest producers of these commodities, according to data from the Food and Agricultural Organisation.”