Massive investment needed in infrastructure to drive Nigeria’s non-oil exports
Nigeria needs to attract huge investment to its poor infrastructure if it must drive the non-oil export sector.
Experts particularly see a good railway system as critical infrastructure that can quadruple Nigeria’s non-oil revenue while developing strong linkages in the economy.
“The reason the Nigerian economy is not developed is the state of its infrastructure,” said Ayo Teriba, CEO of Economic Associates at a symposium organised by the Export Group of the Lagos Chamber of Commerce and Industry (LCCI) last Wednesday.
“The reason why we have much potential in the country but can’t convert it into manufacturing is because of the failure of infrastructure. And this can best be made through Foreign Direct Investment (FDI).If you want to boost manufacturing, think infrastructure. And this infrastructure is best attracted through the FDI,” Teriba said.
He explained that India toed this line and had succeeded in being the fastest economy in the world, overtaking Britain, its former colonial master.
Nigeria needs to spend $300 billion to address its basic infrastructure challenge. Roads in many parts of the country are dilapidated, making it difficult to move goods from rural areas to cities. The railway system is still not up and running, while information technology is still alien to many players in the non-oil sector.
According to Bamidele Ayemibo, chairman of LCCI Export Group, Nigeria must begin to think like the UK, which ferried goods to China by rail-across five countries.
“Another key issue is value addition. A ton of cashew nuts is $1,500 in the international market, but if you just remove its shell, you sell between $14,000 and $15,000,” Ayemibo explained.
He expressed the need to increase funding options for export, calling on the Central Bank of Nigeria(CBN) to hasten the disbursement of the N500 billion Export Stimulation Fund to stimulate non-oil exports.
Nike Akande, president of LCCI, called on the government to create an enabling environment to enable the private sector add value to primary products before exporting them. Akande said the reintroduced Export Expansion Grant (EEG) would stimulate exports and boost Nigeria’s foreign exchange earnings, commending the single-digit 10-year tenor of the Export Stimulation Facility of the CBN as one that would support the country’s dream.
Akinjo Abiodun, deputy director, Nigeria Agricultural Quarantine Service, said exporters must be conscious of the type of commodities and products they intended to ship out of the country to reduce the high level of rejections at the global market.
“The security agencies sometimes do not help matters. In other parts of the world, once a security agent sees perishable products, they allow them to go but can confiscate the vehicle’s papers. There have been instances where perishable goods got spoilt in this process and we are working to end this,” Abiodun said.
Odinaka Anudu