Exporters urge intervention to beat Nigeria’s diversification target
Nigerian exporters say an urgent non-oil sector intervention from the Muhammadu Buhari-led administration is paramount if the country is serious about economic diversification and expansion.
They say efforts must be made to raise the combined GDP contribution of manufacturing, agriculture and mining to 50 percent, adding that this is only way Nigeria’s struggling economy can create sufficient jobs, diversify and raise the foreign reserves.
Nigeria’s non-oil sector, which is made up of primary, semi-finished and finished products, currently contributes about 0.005 percent to the GDP. Manufacturing’s contribution to the economy still stands at nine percent, while agriculture has about 22 percent share in the GDP. Mining contributes less than one percent to the GDP.
Manufacturers add that addressing issues such as Apapa gridlocks, incentives, transnational trademarks and infrastructure will cut costs and fast-track creation of additional five million jobs within the next four years.
Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group (MANEG), said hitting these targets must start with reinstating the suspended Export Expansion Grant (EEG) scheme not only to increase the level of exports and production but also to save exporters who borrowed money from financial institutions with the expectation that the government would pay back.
“I believe there is the need to look closely at the suspended incentive,” Oyelola said, in an exclusive interview.
“Incentives are given to exporters in Brazil, China and other countries. That is why they are well ahead of us. Secondly, some manufacturers borrowed from their bankers with the NDCCs as security but due to the suspension of the EEG, the bankers have been forced to ask for additional and better collaterals, thereby pushing those manufacturers into further distress,” he added.
He said government should intervene quickly in Apapa gridlock as the area remains the gateway to the export sector and economy of Nigeria.
He admonished setting up a cabinet rank committee in collaboration with the Lagos State government to fast- track effort to remedy the transportation challenges in Apapa.
He called for an ECOWAS railway and transnational trademark for goods produced within the West African region.
Obiora Madu, chairman, Lagos Chamber of Commerce and Industry (LCCI) export group, asked the government to reinstate the EEG to spike non-oil export and diversify the economy.
Frank S.Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), said as Nigeria targets more non-oil export volumes to bring in foreign exchange, attention should be drawn to the review the EEG guidelines and acceleration of ECOWAS Trade Liberalisation Scheme.
At a press conference held recentlyin Lagos, Jacobs pointed out that deepening Nigeria’s manufacturing sector must begin with consistent financial policy that will not destroy the manufacturing sector.
“If the productive sector continues to find it difficult to procure necessary raw materials and spare parts within the next few weeks, closure and retrenchment may become inevitable,” Jacobs warned.
Nigeria’s foreign reserves have continued to fall on the back of over-reliance on oil and weak non-oil sector that cannot bring in sufficient foreign exchange.
Nigeria exports cocoa, rubber, plastics, hides and skins, tin, copper, leather, oil seeds, grains, plants, tobacco, aluminium, edible fruits and nuts, among others, to several parts of the world. Netherlands is Nigeria largest trading partner in terms of volume.
Non-oil exports declined significantly to $2.43 billion in 2014, from $2.97 billion recorded by the end of 2013, data compiled by Cobalt International Services and released by the Nigerian Export Promotion Council (NEPC) have shown.
“You cannot expect any difference when the only incentive for the sector was suspended unofficially,” said Ede Dafinone, CEO, Sapele Integrated Industries, in an exclusive interview.
“This is a scheme that raised the non-oil export value from $700 million in 2005 to $2.9 billion in 2013. So, tell me, why should we abandon it?” asked Dafinone.
ODINAKA ANUDU