By Merit Ibe
At a time when economic diversification should be at the forefront of national priorities, the continued decline in non-oil exports has become a major concern for manufacturers and exporters. Industry stakeholders have consistently called on the federal government to take deliberate and sustained action to revitalise the sector, emphasising the need for strategic incentives that will not only boost exports but also ensure a more favourable balance of trade.
The non-oil sector, which contributes nearly 90 per cent to Nigeria’s Gross Domestic Product (GDP), holds immense potential for driving economic transformation.
However, unlocking this potential requires more than just policy rhetoric; it demands bold and proactive industrial reforms. Stakeholders are urging the government to introduce forward-thinking policies that enhance production capacity, promote value addition, and streamline trade processes to make Nigerian exports more competitive on the global stage.
To achieve this, targeted interventions such as export expansion grants, tax incentives, improved trade infrastructure, and access to low-cost financing must be prioritised.
According to experts, a well-supported non-oil export sector will not only bolster foreign exchange earnings but also create jobs, foster industrialisation and strengthen Nigeria’s position in the global economy.
They insist that more than ever, a decisive commitment to non-oil export growth is essential for building a resilient and diversified economy.
A major programme on the table designed to fast-track non-oil exports is the EEG. It was created to encourage exporters to increase the volume of their exports and to compensate them for the high costs they may incur in the country because of lack of infrastructure, high cost of power, insecurity, among others.
EEG is a grant issued to non-oil exporters to reduce production, distribution and logistics (Production) costs.
Though such programmes have not been consistent in the last few years, the operators decry near paralysis of the EEG scheme.
The manufacturers and exporters are, therefore, emphasising the importance of consistency for any government policy to build their confidence.
President of the Manufacturers Association of Nigeria (MAN), Francis Meshioye, pointed out that the federal government had introduced several export incentives in the past, however, only a few of them are being effectively pursued, adding that manufacturers often experience counter-policy regulations and actions from some government agencies and ministries that are inimical to the export business growth in the country.
He said the government must always ensure that exporters, manufacturers and investors do not lose confidence in it.
“We need to take immediate action to ameliorate the prevailing initial negative impact of government reform measures on the manufacturing sector,” adding that escalating exchange rate, high cost of logistics, insecurity, high energy cost and increasing cost of borrowing among others have combined to weaken the performance of the manufacturing export sector.
“We need to address these issues, as signposted in the government stabilization plan. Speedy and diligent implementation is of essence.”
Convener, Talking Trade Investment Global (TATRIG), Olufemi Boyede, lamented that one of the sad realities of Nigeria’s economy today is that it still remains a mono-economy, depending on crude oil as its mainstay. “That has been the albatross hanging on our neck as a nation from the time oil was discovered in Oloibiri, Bayelsa State, in 1956.”
Boyede noted that this reality has however made governments over the years to introduce programmes and policy instruments that would help enhance non-oil exports.
“Such programmes have not been consistent though. But they have somehow helped to keep the non-oil sector in the front burner of discussions.
“One of such support instruments is the Export Incentives and Miscellaneous provisions Act No. 18 of 1986. The scheme came with a technical mix of 18 different incentives, the most prominent of which were: The EEG, Export Adjustment Scheme Fund and the Export Development Fund.”
He listed the policy imperatives for a non oil export-driven economy for Nigeria to include facilitated access to finance; promotion of non-traditional exports; promotion of product diversification by region; reintroduction of commodity boards; focus on market development; strengthened trade support institutions; fostering public private partnership among others.
The Chairperson, MAN Export Promotion Group (MANEG), Odiri Erewa-Meggison, who spoke at the 3rd National Conference on Non-Oil Export, organised by the Nigerian Export Promotion Council (NEPC), emphasised the significant potential of the non-oil exports sector to diversify the nation’s economy and foster sustainable growth.
Erewa-Meggison outlined a comprehensive strategy to tackle key obstacles facing Nigerian exporters, which included reducing production costs, improving market access and enhancing export incentives to ensure Nigerian goods gain traction in the global market.
“From packaging to product quality, Nigeria’s exports must meet international standards to avoid rejection.We must enhance awareness around compliance requirements for specific markets, such as the prohibition of certain pesticides in exported produce,” urging Nigeria’s diplomatic missions and global banking networks to facilitate market entry and acceptance for local goods.
The MANEG boss underscored the critical role of the EEG in boosting exporters’ competitiveness even as she lamented inefficiencies in its implementation.
“The EEG is a vital incentive that has helped our exporters overcome cost challenges and maintain competitiveness. However, persistent backlogs and reliance on promissory notes for grant payments have undermined the programme’s effectiveness.
“We need the government to prioritise timely disbursements and reliable budget allocations for the EEG to demonstrate their support for the manufacturing sector, “she explained.
She advocated for a return to export credit certificates to ensure faster access to funds, noting: “Transitioning back to export credit certificates would enable our exporters to have quicker and more streamlined access to the incentives they need to succeed in global markets.”
Beyond domestic incentives, she stressed the need for enhanced cross-border cooperation within the ECOWAS Trade Liberation Scheme (ETLS), calling on ECOWAS leaders to unify their efforts and ensure consistent implementation of the free trade agreement among member states.
She believes in the potential of non-oil exports to reshape Nigeria’s economy adding: “Non-oil exports are essential for driving Nigeria’s economic growth. With adequate resources, government support, and collaborative strategies, we can overcome the persistent challenges facing Nigerian manufacturers.”
A professor of Economics and past president of the Chartered Institute of Bankers of Nigeria, Olusegun Ajibola, said it is embarrassing that the economy is still permissive of all kinds of imported manufactured goods from all over the world, including basic items like toothpicks, biscuits, drinks, textiles, perfume, etc, six decades after independence.
Ajibola emphasised that the new trade policies which manufacturers seek should be able to articulate new incentives and drive implementation to replicate.
Citing an example from the India industrial policy, he said such a paradigm shift calls for courage, sacrifices, determination, patriotism and collaboration to achieve results.
The economist highlighted the success of other countries in terms of boosting non-oil exports and the need for similar determination in Nigeria, identifying poor road networks, multiple taxation, high energy costs, logistic costs and Customs duty as major issues limiting manufacturing exports.
He criticised the current practice of waving duties on finished products, which has minimal economic impact.
“What are those things manufacturers need to enable them to produce locally and add value? Instead of waving duties on finished consumable products, let’s waive duties on the imported spare until we can develop local counterparts for those raw materials.”
Ajibola emphasised the importance of backward and forward integration in the agricultural sector while noting that challenges such as insecurity, flooding and high costs of farming inputs are creating a supply shortfall of the raw materials manufacturers’s need.
“The agricultural sector should provide the base for supplying certain raw materials for the manufacturing sector. But the issues in the sector are causing a supply shortfall.
Meanwhile, the Lagos Chamber of Commerce and Industry (LCCI) has continued to harp on the need for provision of incentives for the production of exportable goods in Nigeria.
The Director General of LCCI, Dr. Chinyere Almona, in a statement said the current inflation environment should also be used as an opportunity to look beyond and consider longer-term issues, particularly in the economy’s agriculture, manufacturing and export sectors.
“We urge the government to support the economy’s productive sector and incentivize the production of exportable goods where the country has a comparative advantage to increase FX earnings and sustain stability in the FX market.”
She advised the government to sustain and expand programmes and policies like the import duty waivers on food and drugs, the introduction of Compressed Natural Gas (CNG) vehicles to give way to cheaper means of transportation, the several foreign exchange market reforms to boost supply, the decision to make provision for direct crude supply to local refineries, and the transition to renewable energy.