Friday, March 29, 2024

Despite efforts to diversify economy, Nigeria consumes more foreign goods than it exports

‘Eat what you produce and produce what you eat’ is the agenda of the administration of President Muhammadu Buhari. No doubt, efforts are being made by the Central Bank of Nigeria led by Godwin Emefiele to make the wish of the president happen. But it would appear the best of the present administration is not good enough as the most populous black nation on earth still consumes more of imported goods than it exports. BAMIDELE FAMOOFO writes.

While it is commendable on paper that Nigeria exported more goods than it exported in the second quarter of 2022 as indicated by the Nigerian Bureau of Statistics, export of mineral goods like oil remains dominant.

Breakdown of the trade in the review period indicated that export of manufactured goods (finished products) and agricultural goods (mainly raw materials) is far less than the nation still imports for consumption.

To start with, the value of total trade in agricultural goods in Q2, 2022 stood at N606.21billion of which exports were valued at N141.77billion in Q2, 2022. Exports in agricultural goods fell by 29.67 percent and 14.32 percent when compared to the value recorded in Q1, 2022 (N201.59billion) and Q2, 2021 (N165.46billion) respectively.

During the review quarter, most agricultural products were exported to Asia, valued at N98.62billion, followed by Europe with N33.92billion. Export of agricultural products was dominated by ‘Cashew nuts In shell’ valued at N41.27billion followed by ‘Sesamum seeds, whether or not broken’ with N25.04billion and ‘Superior quality Cocoa beans’ with N22.52 billion.

By direction of trade, ‘Cashew nuts In shell worth N22.21billion and N18.50 billion were exported to Vietnam and India respectively. Furthermore, ‘Sesamum seeds’ worth N9.53billion and N6.97 billion were exported to Japan and China respectively, followed by exports of ‘Superior quality raw cocoa beans’’ worth N8.30 billion and N6.91billion were exported to The Netherlands and Indonesia respectively.

On the other hand, total imports of agricultural goods imported in Q2, 2022 stood at N464.45billion or 8.55 percent of total imports in Q2, 2022. This shows an increase of 4.76 percent when compared to the value recorded in Q1, 2022 (N443.36billion) and rose by 13.70 percent compared to the value recorded in Q2, 2021(N408.49billion).

The major agricultural goods imported in Q2, 2022 included ‘Durum wheat (not in seeds)’ from the United States of America with N70.67billion and Lithuania with N60.87 billion. This was followed by ‘Blue whitings (Micromesistius poutassou, Micromesistius australis) meat, frozen.’ from Russia valued at N13.39billion and from The Netherlands with N7.31 billion and ‘Crude palm oil)’ worth N14.64 billion was imported from Cote d’Ivoire.

“The value of total trade of raw materials stood at about N1.07 trillion in the second quarter of 2022 of which imports were valued at N696.12billion while exports stood at N371.10billion”

Finished goods
The value of manufactured goods traded in Q2, 2022 stood at about N2.88 trillion representing 22.39 percent of total trade. Of this, the export component accounted for a paltry N119.53billion. The major export goods in this category were ‘Aluminium alloys, unwrought’ exported to Japan in values worth N17.14billion.

This was followed by ‘Cigarettes containing tobacco’ valued at N5.51billion and N1.83billion to Niger and Guinea respectively and ‘Oil-cake and other solid residues resulting from the extraction of soya bean oil’ exported to France valued at N10.63 billion. Exports by region showed that manufactured goods were mainly exported to Asia valued at N44.64 billion followed by Africa at N40.50 billion and Europe valued at N24.07billion.

In the second quarter of 2022, manufactured goods mainly imported were ‘Machines 4 the reception, conversion & transmission or regeneration of voice, images or…’ from China and Senegal worth N90.10billion and N6.22billion, followed by ‘Used Vehicles, with diesel or semi diesel engine, of cylinder capacity 2500cc’ from The United States of America and Italy valued at N79.66billion, N4.33billion respectively. ‘Other medicines not elsewhere specified’ were also imported from Malaysia (N46.51 billion) and India (N26.02 billion). Other goods imported in this category were ‘Other Herbicides, anti-sprouting products and planting’ from China (N49.71 billion) and ‘Imported motorcycles and cycles, imported CKD by established manufacturers >50cc<=250cc from India (N31.98billion). Raw material goods The value of total trade of raw materials stood at about N1.07 trillion in the second quarter of 2022 of which imports were valued at N696.12billion while exports stood at N371.10billion. During the quarter, ‘Urea whether or not in aqueous solution’ was exported to the United States at a value ofN106.89billion. This was followed by ‘Gold unwrought or in semi-mfr. forms, or in powder form’ exported to Switzerland valued at N17.68billion. In terms of imports, ‘cane sugar’ worth N94.45billion was imported from Brazil, this was followed by ‘Diammonium hydrogen orthophosphate (diammonium phosphate) imported from Morocco valued at N51.34billion. Another product imported under this category was ‘Other Glutamic acid and its salts not specified or included’ imported from China valued at N13.86 billion. Q2 export summary The value of total export stood at about N7.41 trillion in the second quarter of 2022, the value accounted for 57.68 percent of total trade. The export value rose in Q2, 2022 by 4.31 percent against the level recorded in Q1, 2022 and by 47.55 percent when compared to Q2, 2021. Exports by section revealed that Nigeria exported mainly mineral products which amounted to about N6.77 trillion, or 91.46 percent of total export value; followed by ‘Products of the chemical and allied industries’, which were valued at N318.51billion (or 4.30% of the value of total exports) and ‘Vegetable products’ worth N100.12billion (1.35% of the value of total exports). Exports trade by region in Q2, 2022 shows that Nigeria exported most products to Europe with goods valued at N3.28 trillion or 44.29 percent of total exports, followed by exports to Asia valued at N2.43 trillion (32.77% of total exports) and to America with about N1.20 trillion, (16.14% of total exports) while exports to Africa stood at N465.28billion or 6.28 percent of total exports of which N357.29billion worth of goods were exported to ECOWAS countries. Nigeria’s exports to her trading partners shows that India remained the top export destination for Nigeria during the quarter under review. The top five export destinations were India, Spain, The Netherlands, The United States of America and Indonesia and with goods valued at N1.10 trillion or14.85 percent, N1.04 trillion or 13.98 percent, N914.46billion or 12.35 percent, N661.19billion or 8.93 percent, and N625.65billion or 8.45 percent of export trade respectively. These five countries collectively accounted for 58.55 percent of the value of total exports in Q2, 2022.

“Emefiele hinted that the new 100 for 100 Policy on Production and Productivity, which is targeted at harnessing local raw materials to increase domestic production, as well as exports through deliberate credit and other support, will soon begin to yield quality results”

CBN interventions
The Central Bank of Nigeria, under leadership of Godwin Emefiele, has taken major leaps to diversify the economy away from largely oil-based economy through its numerous interventions.

According to Emefiele, “We have supported non-oil sectors such as agriculture, manufacturing, health care, education, power and aviation and other allied economic value chains. You may recall that our flagship Anchor Borrowers’ Programme (ABP) that heralded the recent rice revolution in Nigeria has changed the long-standing dependence on imported rice as the country is not only dependent on domestic production, but we have now become a rice exporting country. The Commercial Agriculture Credit Scheme (CACS) is a major special purpose vehicle to support commercial farmers in the country in different value chains including oil palm, cotton, cocoa, among others.”

Contrary to the results in the second quarter of 2022, the CBN boss argued that the Bank’s continued support to the manufacturing sector and MSMEs have been yielding great results as the implementation of 44 items not valid for FX for imports has been revealed.

He added: “Let me take this medium to inform you once again that our intervention in the health sector, for example, has begun to reduce the health care tourism being sought outside the country which is helping to conserve our foreign exchange and improve our well-being.”

Emefiele hinted that the new 100 for 100 Policy on Production and Productivity, which is targeted at harnessing local raw materials to increase domestic production, as well as exports through deliberate credit and other support, will soon begin to yield quality results.

“More so, the RT200 FX initiative designed to take advantage of our large domestic production to other regional markets is targeted to increase foreign exchange inflows to the economy and support exchange rate stability. In addition, the on-going work at the Dangote Refinery, when fully completed, will stop fuel importation just as we witnessed in cement, sugar and fertilizer market,” he enthused.

Popular Articles