The latest quarterly Economic Report from the CBN puts non-oil exports provisionally at US$960m in Q4 2019, indicating decreases of -41% q/q and -17% y/y. The q/q decrease was largely driven by a sharp decline in export receipts from minerals and food products which stood at US$52m and US$50m respectively. The sectoral breakdown shows that export receipts from manufactured products, agriculture and industrial sub-sectors declined by 16%, 23% and 3% respectively when compared with the previous quarter. For full year 2019, receipts from non-oil exports totalled US$5.4bn.
The CBN’s commentary shows that export receipts from food products accounted for 5.3% of the total. The decrease in export receipts for this segment was largely driven by reduced exportation of fish, alcoholic and non-alcoholic drinks.
To sensitize Nigerians on the country’s export potential and encourage state governments to focus on production of non-oil products in which they have competitive advantage, the Nigerian Export-Import Bank (NEXIM) is conducting an Exporter Enlightenment Programme across each geo-political zone. The programme is scheduled to kick off this month.
To stimulate export activity, the FGN has made provision of N2.5bn tax credit for non-oil exporters in 2020. The tax credit is not cash funded, but provided as a Negotiable Duty Credit Certificate. It is expected to bring some relief to non-oil exporters.
Total non-oil export earnings by Exporters (US$bn)
Sources:: CBN ; FBNQuest Capital Research
The African Continental Free Trade Area (AfCFTA) agreement is expected to promote regional integration and boost diversification. For Nigeria to produce profitable standard products that can compete in markets across Africa, structural challenges (especially power shortages) need to be addressed.