Olusegun Aganga, Trade and Investment Minister
There are indications that Nigeria’s trade policy has placed it above other countries in the sub-Saharan Africa as it accounts for about 30 percent of the entire exports of the Sub-Saharan African countries to the outside world.
However, the international financial advisory firm, Renaissance Capital, which made the disclosure said the sheer volume of Nigeria’s exports makes the country vulnerable to the current global economic downturn.
Rencap, in its latest report titled “Sub-Saharan Africa: Export Patterns-How Trade Dependencies Have Changed,” said Nigeria is SSA’s biggest exporter to the rest of the world.
“Almost 30% of SSA’s exports outside the region originate in Nigeria, and three countries – Nigeria, SA and Angola – dominate extra-regional exports, accounting for 70% of the total, implying that SSA’s exposure to a global downturn through trade is concentrated in these three countries. We believe the impact on Nigeria and Angola is mitigated by their limited exposure to the EU.
Nigeria is said to have exported non-oil products worth over $1.40 billion this year. The figure represents about 11 per cent decline from the over $1.43 billion recorded over the same period last year.
Value of the exported goods for January was put at $161.6 million dollars compared to $307.2 million realised a year ago.
The Executive Director, Nigerian Export Promotion Council (NEPC), David Adulugba, had put the value of non-oil export for the first and second quarters of the year at $660.1million and $686.2 million as against $818.8 million and $676.2 million recorded for the same period in 2011.
According to him, Nigeria exported non-oil products worth $242.9 million in February, this year compared to $273.6 million recorded in the same period last year, adding that Nigeria exported non-oil products worth $255.7 million and $220.6 million in March and April, this year, as against $237.9 million and $250.6 million recorded for 2011.
Meanwhile, the nation’s growth was said to have softened in 2012 to less than 7% on the back of a slowdown in the non-oil sector’s activity, particularly Agriculture and wholesale and retail trade, owing to insecurity in Northern parts of the country.
Rencap explained that floods have also threatened to further undermine growth in 2H12. “We project growth of 6.3% in 2012, down from 7.4% in 2011. Floods also increase the upside risk to inflation, with inflation likely to return to the low double digits and the policy rate likely to remain flat at 12% in the short term,” Rencap said.
In a similar vein, watchers of the unfolding scenario in the global market said trade is the channel through which SSA experiences the most severe effect of a global downturn.
Rencap in its report maintained that SSA economies like Nigeria that largely trade with US, which is facing the challenges in its fiscal policy, may experience slower demand in 2013, whereas the region experiencing the worst downturn – the EU (such as Southern Africa) – and/or have high export/GDP ratios (such as the Republic of Congo) are most exposed to the slowdown in global growth we expect in 2012 and 2013
As at today, China is now SSA’s biggest bilateral trade partner. This is because the country in 2009 surpassed the US to become SSA’s biggest trade partner.
It, however, singled out countries (such as Angola) with greater exposure to emerging markets (EM), particularly China as those that will not be unaffected, given the softening of growth in these economies, which has challenged the decoupling argument. “The US fiscal cliff implies that SSA economies that are big exporters to the US may experience slower demand in 2013,” the report stated.