For decades, Nigeria’s economic health has been heavily tied to oil exports, accounting for over 80 per cent of the country’s foreign exchange earnings despite abundant non-oil resources. The imbalance leaves Nigeria vulnerable to global oil price fluctuations. However, there is good news from the non-oil sector. A recent report from the Nigerian Export Promotion Council (NEPC) showed that the non-oil sector recorded $1.7 billion in Q1, 2025, the highest in 49 years. This is a remarkable achievement.
This could signal a path forward for strengthening the economy if the government provides all the necessary incentives for exports and move the economy away from the present over-reliance on oil revenue. According to the Executive Director, NEPC, Nonye Ayeni, the value of the non-oil exports recorded in Q1, 2025 is 24.75 per cent higher than the corresponding value in Q1 2024. This is as a result of the significant contributions of some agriculture and processed commodities like cocoa and its derivatives that contributed 45 per cent of the total revenue. Others are cashew nuts, sesame seeds, and soyabeans.
Other non-oil sector contributors to the GDP growth include trade, telecommunication, insurance and financial services, manufacturing and real estate. All of them played crucial role in stimulating infrastructure, and providing human capital development. Statistics show that in recent years, the non-oil sector has been contributing about 90 per cent of Nigeria’s GDP, and a significant number of jobs across various industries in the labour market. While the oil sector dominates foreign exchange earnings, the non-oil sector generates revenue that makes diversifying the economy and promoting sustainable development a priority.
The huge contribution of the non-oil sector in the Q1 2025 reflects the new structure of the economy, which is dominated by Micro, Small and Medium Enterprises (MSMEs), with 96.7 per cent. In all of this, government policies, including protectionism, trade liberalisation and a robust export promotion incentives, are vital to strengthening growth in the non-oil sector, especially at this time that President Donald Trump’s administration has unleashed sweeping tariffs across many economies, including Nigeria.
With volatility in the global oil market, government should build a strong, diversified economy that thrives outside the oil sector. This is what countries like Brazil, Malaysia, Vietnam and Indonesia have been doing. For instance, Vietnam generates over $50billion annually from electronics as export, and additional $4billion yearly from rice exports, thereby solidifying its position as the world’s second-largest rice exporter. Also, Brazil’s economy generates more than $41billion from soyabeans exports, making it the world’s largest exporter of soyabeans.
Its beef export contributes $9billion to its foreign exchange earnings annually. Malaysia, which in the sixties imported palm seedlings and rubber from Nigeria, is now a global exporter of these commodities. According to the Food and Agricultural Organisation (FAO), Nigeria accounts for 70 per cent of global yam production, and 10 per cent of global sorghum. But this has not been leveraged for exports. By capitalising on the commodities that abound in the country, Nigeria can replicate the successes recorded by Brazil, Indonesia, Malaysia, and other countries in export-value products like cassava, palm oil that can boost nation’s foreign exchange earnings and enhance the value of the naira.
Undoubtedly, the non-oil sector is the key to unlocking the economy and making it self-sufficient in food security.
In all, to boost Nigeria’s non-oil sector, the government should design policies that will focus on infrastructure development, improve the regulatory environment in key areas like agriculture and manufacturing. Besides, there should be expanded irrigation of wheat cultivation across the country, supporting agricultural research and improving market access for agricultural products, including the development of Mining Resource Corridors (MRC) necessary to enhance Nigeria’s abundant mineral resources.
Beyond this, the development of the agro-allied value chain will help boost value addition and generate more employment. The much-talked about diversification of the productive sector and broadening the revenue base is a policy imperative the government should aggressively pursue. But the country remains at the crossroads in terms of revenues and veritable forex receipts. This requires a pragmatic multi-agency approach and the collaboration of all stakeholders as well as the support of Nigeria’s international development partners.
This is the time to elevate the value of the nation’s non-oil products. The Nigerian Export and Import Bank (NEXIM) should rise to the challenge of sensitising the people on the country’s export potential and encourage state governments to focus on production of non-oil products, which they have competitive advantage.