UGO AMADI
Worried about the current challenges in the economy occasioned by the global pandemic COVID19 and possible ways of navigating out from this major crisis, the Managing Director, Nigerian Ports Authority, Ms. Hadiza Bala-Usman has disclosed that diversification of the non-oil export sector is the key to economic development, sustenance, and growth of the nation.
She made the disclosure while speaking at a recent BudgIT webinar tagged ‘Non-oil export: Disrupting Nigeria’s Growth Cycle.’ Stressing that Nigerian port handled 191 million metric tonnes of export cargo in 2019. Out of this crude oil accounted for 78 percent while non-oil cargo accounted for only 22 percent
Bala-Usman noted that the crisis has reaffirms the vulnerability of the Nigerian economy to oil-related shocks. ‘’It underscores the need for Nigeria to look outward, diversifying its export base away from the volatile commodity if the country is to win its battles against poverty and inequality.
A recent report has indicated that a unit increase in non-oil export stimulates the growth of the Nigerian economy by 0.03 percent. This outcome reveals the grossly underdeveloped state of the non-oil sector of the Nigerian economy.
Also, data from the National Bureau of Statistics shows the monetary value of the goods exported during the period. According to the NBS, Nigeria shipped $53.6bn worth of goods around the globe in 2019.
Although this shipment amounts to an increase of 10.7 per cent since 2015 and a 1.3 percent increase from 2018, it shows that Nigeria made $11.8bn from non-oil exports while $41.8bn came from crude oil exports during the period under review
Bala-Usman also expressed worry about the data, saying that with the of dwindling of oil prices, it was not a good signal for the economy
Nigeria is currently the largest African crude oil producer, and the resource accounts for 90% of its exports and foreign exchange earnings and 60% of government revenues.
.Bala-Usman said, “Nigeria’s crude shipment is tied to exportation and it contributes to the highest revenue of the ports.”
She projected that with the reduction in oil shipment and price, occasioned by the COVID-19 pandemic, the revenue of the government from the port was likely to dip by 75 percent. Stressing that it was time to increase the shipment of non-oil exports.
Invariably, according to her “This underscores the importance of diversification of the economy through non-oil exports so that we can reverse this trend. “There is a need to encourage local investors. We are a large country of consumers; we need to increase local production. We need to make domestic investment a priority.”
In his own remarks during the webinar, the Executive Secretary/Chief Executive Officer, Nigeria Investment Promotion Council, Yewande Sadiku, said the pandemic may see foreign direct investment into African countries fall by 30-40 percent.
She agreed with Bala-Usman on the need to strengthen the local production base and increase non-oil export while also attracting more FDI.
Also speaking the Publisher of Nairametrics, Mr. Ugo Obi Chukwu reiterated the need for the country to do away with reliance on crude oil.
He noted that currency depreciation will continue if we don’t diversify because a country relying on the oil will not develop.
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