Nigeria has recorded N8.24 trillion from its non-crude export between 2002 and March, 2014.
The country exports from the period to 2011 was N2.65 trillion but it began to soar when Nigeria’s non-oil exports suddenly rose to 117, from 106 reported by year-end 2012.
Non-oil exports totaled $2.97 billion in 2013, recording 16 percent increase from $2.56 billion recorded in 2012. Data from the Nigerian Export Promotion Council (NEPC) revealed that 126 companies, mostly small-and medium-scale enterprises (SMEs) exported non-oil products to many countries.
In the first quarter of 2014, exports of manufactures and industrial products by Nigeria reached N254.7billion in two months.
Some of the export products include: leather, rubber, wood and articles of wood, charcoal, plastics cocoa, prawns and fish, cashew nuts, aluminium, gum arabic, edible fruits and copper It would recall that exports in Nigeria increased to N128.40 billion in March of 2014 from N126.30billion in February, 2014.
The Central Bank of Nigeria (CBN) data for Q1 2014 revealed that manufactures and industrial products accounted for 77percent of total non-oil exports.
The data noted that non-oil products accounted for just 5percent of total annual Nigerian exports in 2013 on a balance of payments basis. Nigeria’s main exports partners are: USA (30percent), Equatorial Guinea (8percent), Brazil (6.6percent), France (6percent) and India (6percent).
Interestingly, six of the ten major destinations of Nigeria’s exports are also among the ten leading countries where Nigeria imported most of its goods from in the first quarter of 2014. The countries and the value of Nigeria’s net exports to the countries during the period are: India (N450.8 billion), Netherlands (N385.2 billion), Brazil (N334.7 billion), France (N274.4 billion), United Kingdom (N198.3 billion), and USA (-N17.3 billion).
But despite the improvement, FBN’s Purchasing Managers’ Index released this month explained that the Economic Community of West African States (ECOWAS) did not offer attractive export markets as non-tariff barriers and the modest level of integration within the region were not encouraging pointers.
However it said the community planned to introduce a common external tariff in January 2015.
The company noted that a 5percent rate for raw materials and capital goods, 10percent for intermediates and 15percent for finished consumer goods al would be applied.
However, it was not clear whether the tariff would be implemented on schedule.
It added: “We do not expect significant export diversification. Nigeria’s economic model is based upon supplying domestic demand, mostly unmet, and manufacturing policy upon import substitution.
“The reading for new orders fell sharply from 62 to 57 in September. The number of respondents reporting higher orders secured 36percent, compared to 50percent in August.”
Since the early 1970s when Nigeria started the exploration of crude oil in commercial quantity, the Nigerian economy has remained largely a mono-product economy. This is in spite of government’s attempts to shore up the share of non-crude oil in the domestic economy.
In the first quarter of 2014, Nigeria earned N3.2 trillion from crude oil export. This was about 81 per cent of the total exports income Nigeria earned during the period. When sale of liquefied natural gas is included, the oil and gas exports revenue in the first quarter of 2014 rose to N3.5 trillion, representing 90 per cent of the nation’s aggregate exports income during the period.
“But beyond the domineering nature of crude oil export, there is a budding positive story among the Nigeria’s leading exports. No fewer than six agricultural/agribusiness products were among the items on the list of Nigeria’s top 15 exports in the first quarter of 2014 (even though their relative values are not too significant). What this suggests is that with right policies and other necessary support, Nigeria may unleash its potential in the sale of the products,” according to data by the Nigerian Bureau of Statistics and FirstBank Research,
The data explained that Nigeria spent 12 per cent of its total imports on just one commodity – premium motor spirit (PMS, petrol). For a country that earns the majority of its forex income (81 per cent of its exports in the first quarter of 2014)
A further analysis of the quarter-on-quarter trade values and changes reveals a more interesting trend. Whereas the total value of Nigeria’s imports decreased from N1.65 trillion in the first quarter of 2013 to N1.55 trillion in the first quarter of 2014, the aggregate revenue that Nigeria earned from its exports rose from N3.45 trillion in the first quarter of 2013 to N3.97 trillion in the corresponding period of 2014.
Tellingly, Nigeria maintains trade surplus. But if we remove crude oil from the imports category, and PMS from the exports group, Nigeria will record trade deficit. This provides a further boost to the campaign for domestic economy diversification from crude oil and liquefied natural gas.
It was learnt that Nigeria earned more income from the exports of its crude oil and non-crude oil in the first quarter of 2014 when compared with the total exports revenue the country earned in the corresponding period of 2013. But in spite of the increase in aggregate exports income, the worth of both the crude oil and non-crude oil exports in the first quarter of 2014 was significantly below the value of total exports in the first quarter of 2012. This suggests a worrisome conclusion: Nigeria’s exports income in 2014 may just be a fraction of the exports revenue the country earned two years ago!
Also it was discovered that the drop in crude oil exports income was as a result of lower crude oil price and the prevalence of oil bunkering. While crude oil price (Bonny Light) averaged $115.6 per barrel in the first quarter of 2012, it was about $110.2 per barrel in the corresponding period of 2014.
The discovery, extraction, and export of shale oil by the US also affected the demand of Nigeria’s Bonny Light crude oil. For decades, the US was a major buyer of Nigeria’s crude oil. But the US’ decision to explore its shale oil advantage meant that Nigeria had to look for other economies that the country could supply its crude oil.—Business Monitor