‘Why Nigeria’s Non-oil Export Declined in 2015’

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Dele Ogbodo in Abuja

The Executive Secretary of the Organised Private Exporters Association (OPEXA), Mr. Jaiyeola Olarewaju, has said Nigeria’s earning from non-oil export declined from $3billion in 2013 to $1.6billion in 2015 due to the disruption in the implementation of the Export Expansion Grant (EEG), scheme since 2010.

Olarewaju, who painted a glooming picture of the sector’s export earning potential, said there are indications that the earnings will slide further downward before the end of 2016.

In a statement made available to journalists in Abuja, Olarewaju said the non-acceptance of the Negotiable Duty Credit Certificate (NDCC), an instrument through which the grant is disbursed has resulted in the backlog of N123billion of unutilised NDCC fund.

According to him, Nigeria’s GDP in 2015 grew at 2.7percent with forecast for 2.3percent and 3.5 percent for in 2016 and 2017, however showed a sharp contrast with Ivory Coast, which has GDP growth above 8 percent.

“East African countries of Kenya, Tanzania, Uganda and Ethiopia are growing at 6 percent plus. A common thread among these countries is that they have a diversified production base of agro-allied industries.” he said.

Olarewaju said exporters were paralysed by the backlog and therefore had no option but to scale down exports, which bore a stark reflection on the country’s non-oil expert performance since 2014.

The report which was based on impact assessment report prepared by the Nigerian Export Promotion Council released in May, according to him, was based on a survey of 105 export oriented firms from across the country.

He said: “Based on the positive government policy on export incentives, the direct employment in the non-oil export sector increased from 105,220 in 2005 to 211,291 in 2010. However due to the disruption in the incentive policy, the employment started to decline in 201.”

While bemoaning the country’s export as suffering from neglect, he said IMF world economic outlook released in April 2016, showed Nigeria in a worst performer among sub Saharan African economies.

He admitted that Nigeria’s non-oil export sector is still in its infancy and only came into mainstream in the last ten years due to the policies that were put in place that encouraged the sector to invest in agricultural supply chains, export processing factories and overseas marketing.

“Nigeria’s export basket comprises agro-allied commodities such as cocoa, cashew, cotton, sesame seeds, and rubber, finished leather, tobacco, textiles, processed marine products, footwear and plastics.

“Europe Union (EU) is our largest trading partner accounting for about 40per cent of the market share followed by Asia and ECOWAS accounting for 25 percent and 18 percent respectively.

“For the past 2 years’ exporters have been sitting on a backlog of over N 100 billion worth of unutilised export certificates issued under the seal of the ministry of finance. These are sovereign instruments and the government should honour its financial commitments as per extant law.” Olarewaju said.

He said it is unfair that some exporters were issued the certificates for exports made till 2013 whereas many others who had submitted their applications remain outstanding for no fault of theirs.

He added: “This is part of the backlog lying with NEPC. After all, government policy is not based on first come first served. By any principle of fairness and justice, all pending applications for EEG on account of exports made till 2013 should be treated by the Finance ministry.

“We are happy to learn that NEPC is working on a so-called zero oil export strategy. However, ultimately it is the private sector that has to achieve the production and export targets. And this can only happen, if the nagging issue to EEG backlog is addressed.”