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Non-oil Exports Key to Nigeria’s Economic Rejuvenation, Say Stakeholders at Zenith Bank International Trade Seminar

Nigeria’s non-oil export is quite low compared to other African top oil producers. This exposes the economy to oil price/production risks.

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Zenith Bank Trade Seminar

Stakeholders unanimously called for support of Nigeria’s Non-Oil Export Sector at the 7th Annual Edition of the Zenith Bank International Trade Seminar themed “Unlocking Opportunities in Nigeria’s Non-Oil Export Business”, which was held on Wednesday, July 20, 2022, at the Civic Centre, Victoria Island, Lagos and virtually.

In his Goodwill Message Presentation, the Founder and Chairman of Zenith Bank Plc, Mr. Jim Ovia, CON, called for a concerted effort toward diversifying Nigeria’s export base through the promotion of non-oil exports. Highlighting the importance of non-oil export to the nation’s economy, Ovia pointed out that Nigeria exported cocoa and several other non-oil products for years before oil was discovered. He cited the example of the 25-storey Cocoa House in Ibadan, which was built with proceeds from cocoa exports.

He pointed out that many countries in the world, such as Japan and China been successful because they are doing a great deal of innovation, production and manufacturing of goods and services. According to him, we should also look at promoting the nation’s non-oil export sector through technology to create technological giants like Apple, Tesla, and Google. And we already have technology companies in this mould in Nigeria, such as Flutterwave, which has a valuation of $3 billion, making it more valuable than some banks in Nigeria.

Speaking further on the enormous potential in Nigeria’s non-oil sector, Ovia highlighted the phenomenal growth of Nigeria’s emerging financial technology (Fintech) companies such as Flutherwave, OPay, Interswitch, Kuda and Paystack, with market valuations of $3 billion, $2 billion, $1 billion, $500 million, $200 million, respectively. According to him, this underscores the enormous opportunity in the Fintech space. He also noted that the most capitalized companies in the world, such as Apple, Microsoft,  Alphabet (Google), Amazon, Tesla, Visa, etc., are not oil companies but are in the technological innovation space.

In his welcome address, the Group Managing Director/CEO of Zenith Bank, Mr. Ebenezer Onyeagwu, said that the annual Zenith Bank Trade Seminar has served as a veritable platform to deepen the conversation on promoting non-oil export in Nigeria, bringing together non-oil export practitioners and relevant government agencies to interact and explore the opportunities and proffer solutions to the challenges of non-oil export in the country.

Speaking on the origin of the Zenith Bank Annual International Trade Seminar, Onyeagwu said that the commodity price slump of 2014-2016 was a watershed moment. According to him, “when crude oil prices plummeted from $114.55 per barrel in June 2014 to $28.76 in January 2016, with an attendant effect on the availability of foreign exchange, it was time to look towards the non-oil export sector for a more sustainable source of foreign exchange that is not susceptible to external shocks and price volatility.

Highlighting some of the salient outcomes of the past six Zenith Bank Annual International Trade Seminar editions, Onyeagwu noted that previous editions’ outcomes have found expression and influenced policy initiatives. For instance, the extension of the period of repatriation of Non-Oil Export proceeds from 90 days to 180 days and the policy mandating shippers not to carry export without a Nigeria Export Proceeds (NXP) Form Number were recommendations from previous seminars.

Also, the need to incentivize exporters to repatriate their export proceeds through the official channels and the recommendation to create export terminals across various export hubs in the country were also from past seminars. Also, previous editions recommended having Export Desks in commercial banks, which has now been instituted. He also stated that Zenith Bank has trained over 100 exporters through its Zero to Hero programmes which provide a platform for grooming and exposing beginners to become strong exporters by providing training on documentation, product sourcing, access to market and financing. He noted that Zenith Bank will continue the advocacy of promoting non-oil export.

Delivering his goodwill message, the Central Bank of Nigeria Governor, Mr. Godwin Emefiele, CON, commended Zenith Bank and its leadership led by the Founder and Chairman of the Board, Jim Ovia, for its laudable initiative in organizing an annual export seminar to explore opportunities in Nigeria’s non-oil export with a view to increasing the nation’s non-oil export base and ultimately increasing its share as a percentage of total export. In his words: “This is why the theme of this year’s seminar “Unlocking Opportunities in Nigeria’s Non-Oil Export Business” is timely and appropriate. This is because the global economy and structure are changing rapidly before our eyes.

The previous world economic order underpinned by globalization and seamless trade possibilities seems to be suffering major disruptions lately. We believe Nigeria has a lot of potentials, and we can harness this for the good of our people and country.” He pointed out that the CBN has undertaken several initiatives to promote the non-oil export sector because of its firm belief that the non-oil export sector holds enormous potential to contribute to employment generation, wealth creation and economic growth of the country.

In his keynote address, the President & Chief Executive of Dangote Group, Alhaji Aliko Dangote, GCON, said that “Nigeria’s non-oil export is quite low compared to other African top oil producers. This exposes the economy to oil price/production risks. There is much room for growth, and the CBN is helping drive this through the RT200 programme”. According to him, the CBN RT200 FX programme, which aims to achieve $200 billion in foreign exchange earnings from non-oil proceeds over the next 3-5 years, has very laudable objectives, including enhancing foreign exchange inflow, diversifying the source of FX inflow, increasing the level of contribution from non-oil export, and ensuring stability and sustainability of FX flows.

In his Goodwill Message, His Excellency, Wamkele Mene, Secretary General, African Continental Free Trade Area (AfCFTA) Secretariat, enumerated the progress and achievements of the African Continental Free Trade Area and the efforts to improve intra-Africa trade. Also, in his Goodwill Message, Professor Benedict Oramah, President / Chairman of African Export-Import Bank (Afreximbank), highlighted the efforts of Afreximbank to enhance intra-Africa trade through the implementation of the Pan-African Payment and Settlement System (PAPSS). According to him, the Pan-African Payment and Settlement System will make it easy and seamless for Africans to trade amongst themselves and receive payment for goods and services in their local currencies, eliminating currency conversion challenges.

Zenith Bank remains committed to promoting the non-oil export sector in Nigeria by identifying emerging opportunities which help stimulate non-oil exports and develop robust financial products and incentives for operators in the sector. The bank launched the Non-Oil Export Seminar in 2017 as an initiative to deepen the discourse on promoting the non-oil export business in Nigeria.

 

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

2025: The End of Gas Flaring

The Federal Government through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has inaugurated a 12-member ‘Gas Flare Commercialization Program Team’ to manage the nation’s gas flaring.

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gas flaring

The Federal Government through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has inaugurated a 12-member ‘Gas Flare Commercialization Program Team’ to manage the nation’s gas flaring.

According to Engineer Gbenga Komolafe, the Chief Executive of NUPRC, gas flaring in the oil gas industry has been a continuous menace that needs to be eradicated because of its adverse effect on the people’s health, the Environment and also a major resource waste and value erosion to the country.

Gbenga mentioned that to monetize gas resources is to take a positive step toward securing energy security, especially in this period of global energy transition. He said as a nation, Nigeria needs to ensure it harnesses every available gas resource in other to create value.

He declared that the NUPRC is resuming the procedure of issuing flare sites to competent technical companies, after a complete bidding process.

This process is crucial and important in respect of the direction of the federal government’s policy to ensure every gas resource is properly developed for national development.

He laid emphasis that the wasteful disposal of natural gas is not only hazardous with serious health and environmental consequences but also a waste of resource and value to Nigeria.

In addition to this, he stated that the FG declared the period 2021 to 2030 as the DECADE OF GAS, a period which the country must change direction from oil centered exploitation to a gas-focused industrial development.

Although the World Bank has set 2030 as the target year to end gas flaring, Nigeria has set the country’s deadline tp 2025.

President Muhammadu Buhari made a commitment towards the Paris Agreement during the COP26 Leaders’ Summit to achieve Net Zero carbon emissions by 2060,” he said.

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Economy

China Reaffirms Commitment to Maintaining Cooperation With Africa

Wu- Peng, has reaffirmed China’s commitment to maintaining cooperation with Africa

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China Nigeria

The director general of the ministry of foreign affairs of China, Wu- Peng, has reaffirmed China’s commitment to maintaining cooperation with Africa.

Wu-Peng disclosed this at a meeting held with African journalists under the auspices of the China Africa Press Centre (CAPC) in June 2022 in Beijing.

Quoting the president of China, Xi Jinping, Wu-Peng said China will work hand in hand with African countries to implement linked programs in the next three years”.

According to Wu-Peng, this includes programs related to the medical and health sector, poverty alleviation, agricultural growth and promoting investments.

We’re still fighting to contain Covid-19 since the outbreak of the pandemic, China has so far provided about 260 million doses of vaccines to 55 African countries and African Union,” the Director General said.

He also mentioned that China had also made provision for about 120 batches of emergency supplies to African countries and they all have diplomatic relations with China and also contributed to Africa’s early recovery from the Covid-19 pandemic.

China has already constructed the African CDC in Addis Ababa and it will be completed in 2023.

The other program I would like to make mention is the agricultural sector. When FOCAC was held in 2021, there was no Russia-Ukraine crisis, yet we focus and invested in Agriculture in Africa.

The reason been, we believe in the potential of Agriculture in Africa, the growth and development is huge, there are still lots of arid land in Africa, Wu-Peng stated.

Unfortunately, Africans still have to import grapes from the outside which costs a lot of currency and actually damages Africa’s international balance sheet.”

He said that the failure to prioritize agriculture could obstruct fast economic growth in Africa, suggesting that more should be done through Public Private Partnership (PPP) to ensure food security.

The director general laid emphasis on the need for proper implementation of the report from the FOCAC meetings to bring to life the realization of set goals and objectives.

“This does not make sense, you have lands, you have labor forces, I think we just need the right policy to promote price investments in industrial large scale farms to improve our food security.

Why this is has become very important is due to the Ukraine crisis, food prices globally surged and going forward, we must finish construction of the project in the nearest future.

African governments have already noticed developments of agriculture is a huge priority to deal with the crisis of hike in food prices, we want Africas countries to have up to date plans from FOCAC meetings and the findings of the results.

“Usually, when we have FOCAC meetings we just produce documents, we need more concrete actions, we must be focused,” the director general said.

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Economy

Inflation Rises to 17 Year High in Nigeria

Inflation rate, grew at a 19.64% rate in July, the highest since September 2005 when inflation peaked at 24.32%

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consumer prices

Prices of goods and services rose to a 17-year-high in Africa’s largest economy Nigeria in the month of July, the National Bureau of Statistics (NBS) reported on Monday.

The Consumer Price Index (CPI), which measures the inflation rate, grew at a 19.64% rate in July, the highest since September 2005 when inflation peaked at 24.32%. This was 1.04% higher than the 18.60% recorded in June 2022.

On a monthly basis, inflation expanded by 1.817%, an increase of 0.001% from 1.816% filed in June 2022.

As expected, food inflation also grew by 0.99% from 21.03% year-on-year in July 2021 to 22.02% in July 2022. According to NBS, the increase in the food sub-index was caused by increases in prices of Bread and cereals, Food products n.e.c, Potatoes, yam and other tubers, meat, fish, oil, and fat.

On a month-on-month basis, the food inflation rate in July was 2.04%, this was a 0.01% insignificant decline compared to the rate recorded in June 2022 (2.05%). This decline is attributed to a reduction in the prices of some food items like Tubers, Maize, Garri, and Vegetables.

Rising economic uncertainties amid a series of policy changes like the increase in duty on imported raw materials, high electricity tariffs,  fuel, etc needed to manufacture the necessary food items are responsible for the persistent increase in inflation.

Also, the extended decline in the value of the Nigerian Naira against its global counterparts has made foreign goods or imported goods expensive for Nigerians. Therefore, manufacturing companies are now passing the increase to final consumers already struggling with low earnings and a high unemployment rate.

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