Abdulwahab Isa 
Statistics on non-oil export from the Central Bank of Nigeria (CCBN) and the Nigeria Export Promotion Council (NEPC) indicated a decline both in volume and earnings last year. Yet the country is gifted with vast deposits of assorted non-oil commodities that could be exported for needed foreign exchange earnings.
Regretfully, the country’s failure to prioritise non-oil exports by not addressing persisting challenges such as regulatory bottlenecks, bureaucratic complexities, and other sundry setbacks is a major albatross. Unintentionally or for lack of drive, government’s years of being laid back in the manner in which it handles nonoil export commodities denies it lofty opportunity, huge gains in form of foreign exchange earnings that could have gone into the foreign reserves.
Non-oil export
A Central Bank of Nigeria’s non-oil export data confirmed that Nigeria’s non-oil export earnings fell by 24 per cent year-on-year, YoY, to $4.46 billion in nine months to September 30, 2023. The poor performance showed government’s efforts to enhance this critical source of foreign exchange had yet to pay off. The figure was $5.88 billion in the corresponding period of 2022.
While the apex bank report attributed the non-oil export decline to lower commodity prices in the global market, experts identified inconsistent government policies as a major reason. Another report by the NEPC early in the year on non-oil exports indicated that revenue declined by 6.25 per cent in 2023 compared to $4.8 billion recorded in 2022. Presenting the non-oil export revenue score card for 2023 in January, Executive Director/Chief Executive, Nigerian Export Promotion Council (NEPC), Mrs. Nonye Ayeni, said the country attracted a sum of $4.5 billion from non-oil exports last year.
Speaking at the presentation of the progress report on the non-oil export performance for 2023, Ayeni stressed that an increase in the volume and value of exportable goods and services and the repatriation of export proceeds would enhance foreign exchange inflow into the country as well as assist in stabilising the value of the naira. Ayeni attributed the shortfall to instances of export rejection, the 2023 general election, and the economic recession, among others, adding that though there was a decline in value exported, a substantial volume increase was recorded.
According to the NEPC chief executive, the volume of non-oil exports continued to increase over the years, with 6.685 million metric tons of exportable products last year, thereby reaffirming the widely held assertion that the sector holds the key to economic revitalisation.
She noted that 273 different products were exported in the period under review. They ranged from manufactured, semi-processed, solid minerals to agricultural commodities. The NEPC records provided by Pre-shipment Inspection Agents (PIAs) showed that, of the top 20 products exported in 2023, urea, cocoa beans, sesame seed, soya beans/meal, cashew nuts/kernels, aluminum ingots, and hibiscus flower topped the list, respectively.
Reflecting on the non-oil export performance and the effort by the Council to scale up future improvements, Ayeni pledged the Council’s commitment to consistently build the capacity of non-oil exporters across the value chains – product and market development – among other requisite skills to enable them to penetrate the international market.
To equip exporters with the requisite skills, she said the Council organized no fewer than 92 capacity-building programs, held across the NEPC regional offices in the six geopolitical zones, with 13,751 participants within the review period. “NEPC is very optimistic and remains committed to working with the various stakeholders to ensure that our non-oil exports double in a short time,” promised the NEPC boss.
Bottlenecks
There are a number of impediments stifling non-oil export performance. Chiefly, there is a problem of weak institutional framework and inconsistent government policies that limit the promotion of non-oil exports in Nigeria. Added to it are poor capacity skills and a lack of knowledge in the areas of non-oil export commodities. The lack of requisite skills is responsible for the rejection of most of Nigeria’s non-oil export commodities overseas. Poor handling of non-oil commodities billed for export exposes such goods to rejection. There is poor access to finance.
Window of opportunities To address the challenges hampering non-oil exports in the economy, the Nigerian Export-Import (NEXIM) Bank initiated various strategies to build capacity and enhance market access by small and medium enterprises (SMEs) in the country. The development bank has a dedicated funding window for non-oil export drives. Short- to medium-term loans are dedicated to funding Nigerian exporters.
Speaking recently at a formal launch of the Nigerian Exporters Hub Regional Office in Lagos, Managing Director of NEXIM, Abba Bello, identified access to finance as one of the major challenges faced by small and medium enterprises (SMEs) in their non-oil export activities. Speaking on the theme “Making Exporting Your Everyday Business: Providing Easy Access to Export Finance,” Bello said that although access to finance posed a major problem, SMEs face other challenges associated with the production value chain, logistics, and quality standards.
Apart from the peculiar challenges of the country’s export sector, which has constrained non-oil export credit to less than one percent as a percentage of the total private sector loans, Bello said low volume and availability of export credit, high cost of funds, the absence of medium- and long-term funds, and the absence of suitable trade finance instruments limit the capacity of SMEs to embark on nonoil exports.
Under production challenges, the NEXIM Chief identified high operational costs associated with power supply, a lack of export incentives as a result of long delays in securing export expansion grants (EEG), a low rate and scope, outdated factories, aged plantations, and poor compliance with packaging standards that also affect the potential of the potential of SMEs.
In terms of logistics challenges, he said high transportation costs, non-tariff measures, and long administrative delays by the Nigeria Customs Service (NCS) and inspection agents at the ports hinder the operations of SMEs, while conditioning and warehousing facilities, activities of accredited laboratory facilities, as well as activities of packaging and labeling companies, also pose serious challenges to SMEs.
Export devt facility
To boost non-oil export products across states, the bank has enlisted some states in the Export Development Facility (EDF). EDF is the bank’s N50 billion debenture issued by the bank to stimulate and increase deliberate funding to small and medium enterprises (SMEs). It’s meant to facilitate regional industrialization for value-added exports and broaden Nigeria’s export basket and market destinations.
Yobe Taraba, Edo and recently Kwara states are among the states that signed the memorandum of understanding (MOU) with NEXIM for facilitating export-related industrializ Sation and promoting non-oil export commodities in their states. The bank uses the EDF facility to promote non-oil commodity exports across many states. Kwara state is the latest in the line-up for EDF support. Any state that signs an EDF facility with the bank is qualified.
Private exporters of non-oil commodities operating in the state for Export Development Funds and other supports upon fulfillment of relevant terms are qualified to access the window. Speaking to the array of supports at NEXIM Bank disposal in assisting the non-oil export sector, Abba said: “We have various financing and risk-bearing facilities for large-scale exporters and SMEs, including working capital and stocking facilities, local and foreign input facilities, medium- and long-term project finance facilities, regional and state export development programs, women and youth export development facilities, SME export facilities (for women and SMEs in the export value chain), and export credit guarantees and export credit insurance.”
Apart from working and collaborating with other government agencies to address the identified challenges, Bello said Nexim has developed specific schemes to improve access to finance for SMEs. Some of these schemes, he said, include providing longer-term funds at single-digit rates to qualified SMEs and working with state governments under the State Export Development Programme levels to promote the development of at least one exportable product per state.
Besides, he said NEXIM also helped to develop SME exporters through a state or regional incorporated aggregator scheme to provide finance and market access to SMEs; promotion of the SME Export Facility (SMEEF) to address the needs of SMEs in a special way by using moveable assets as collateral for loans. For him, the bank also encourages players in the export value chain to access funding through schemes like the Women and Youth Export Facility (WAYEF), targeted at women (who constitute about 50% of the population) and youth (with 65% of Nigerians under 35 years old).
Also, the bank also helps SMEs secure the Project Preparation Fund developed in collaboration with Afreximbank to increase the pipeline of bankable projects by SMEs; Produce, Add Value, and Export (PAVE) is designed to promote value-added exports.
Last line
To spur desired growth in the nonoil export value chain, stakeholders comprising exporters and exportpromoting agencies at all levels of government need to key into NEXIM bank’s various funding support windows and programmes. More importantly, the government must weed out inhibitive policies that are clogging the smooth progress expected in the non-oil export sector.
