CEM REPORT, TRADE | Nigeria’s economic diversification drive through non-oil exports, aimed at reducing dependence on oil revenues, suffered a setback in 2023 as non-oil exports fell by 6.25% from $4.8 billion in 2022 to $4.5 billion, according to the Nigerian Export Promotion Council (NEPC).
The NEPC, the federal agency responsible for developing and promoting non-oil exports, attributed the decline to several factors, such as rejections of Nigerian products by foreign buyers due to poor certification and quality standards, political crises and insecurity in neighbouring African countries that affected trade routes, exchange rate fluctuations that made exports less competitive, and a surge in international trade that increased competition from other countries.
The NEPC Chief Executive Officer, Nonye Ayeni, disclosed this yesterday while presenting the council’s progress report on the non-oil export performance in 2023 in Abuja, the nation’s capital.
Non-Oil Export Volume
She said that despite the drop in value, the volume and variety of non-oil exports increased in the period under review, as a total of 273 different products were exported, ranging from manufactured, semi-processed, solid minerals to agricultural commodities. This represented a notable increase of approximately 28.04 per cent compared to the preceding year when 213 products were exported.
“A breakdown of the result shows the following based on information received from pre-shipment inspection agents (PIAs), of the top 20 products exported in the year 2023, urea, cocoa, beans, sesame seed, soya-beans/meal, cashew nuts/kernels, aluminium ingots and hibiscus flower were top of the list,” she said.
She added that the top commodities in terms of total exported products were urea/fertilizer, which accounted for 20.1 per cent, followed by cocoa beans at 13.19 per cent and sesame seeds at 9.03 per cent. These three products alone contributed 42.32 per cent of the total non-oil export value in 2023.
Exporting Companies and Banks
She also revealed that of the top 20 exporting companies in Nigeria, Indorama, Eleme Fertilizer and Chemical Limited took the lead with $524.33 million in value, while Dangote Fertilizer Limited recorded the second-highest value of $383.07 million. These two companies, both in the fertilizer industry, accounted for 20.16 per cent of the total non-oil export value in 2023.
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She further stated that a total of 32 banks participated in the establishment of NXP forms for export for the year, with a total number of 21,390 NXP forms processed. Zenith Bank Plc processed the highest NXP forms at 39.09 per cent, while United Bank of Africa (UBA) Plc and First Bank of Nigeria Plc recorded 10.55 per cent and 9.88 per cent respectively.
Looking Ahead
The NEPC boss implored financial institutions to take advantage of the opportunities in the non-oil export sector by supporting exporters to enhance their capacity to scale up productivity and access international markets, especially with the Africa Continental Free Trade Area (AfCFTA) implementation.
The AfCFTA, which came into effect on January 1, 2021, is a landmark trade agreement that aims to create a single market for goods and services among 54 African countries, with a potential market of 1.3 billion people and a combined GDP of $3.4 trillion.
Ayeni said that the NEPC was committed to facilitating the participation of Nigerian exporters in the AfCFTA, as well as other regional and global markets, by providing them with relevant information, training, incentives and linkages.
She also said that the NEPC was working closely with other stakeholders, such as the Ministry of Industry, Trade and Investment, the Standards Organisation of Nigeria, the Nigerian Customs Service, the Nigerian Export-Import Bank, and the Nigerian Export Processing Zones Authority, to address the challenges and constraints facing the non-oil export sector.
She expressed optimism that the non-oil export sector would bounce back and contribute significantly to the economic growth and development of Nigeria in the coming years.
