Policy Imperatives for a Non-Oil Export-Driven Economy for Nigeria (2)
The concluding part of the series provides clues on how to transform Nigeria into a non-oil-export-driven economy
Read Part 1 of the series here.
5. Facilitate Access to Finance
– Improve Access to Finance for Exporters: Access to affordable financing is crucial for businesses to invest in production, processing, and marketing for export. Financial institutions need to be encouraged to provide loans and other financial products tailored to the needs of exporters.
– Explore Export Credit Guarantee Schemes: Government-backed export credit guarantee schemes can mitigate risks for exporters and financial institutions, making it easier for businesses to finance export ventures.
6. Promote Non-Traditional Exports
– Diversify Export Products: Nigeria must explore opportunities in non-traditional export commodities beyond oil, cocoa, and palm oil. Nigeria can quickly diversify its export profile with an export potential of over 5,000 products. This requires identifying new products with export potential, conducting market research, and supporting businesses in entering new markets.
– Promote Product Diversification by Region: Encourage states to focus on promoting the export of products where they have a competitive advantage. This localised approach can utilise existing expertise and resources, facilitating the development of specialised export hubs.
7. Reinstate Commodity Boards with a Modern Approach
– Reintroduce Commodity Boards:
There is a call to reintroduce commodity boards to regulate and standardise key export commodities, ensuring quality and consistent supply. This can help address issues like rejecting Nigerian products in international markets due to quality concerns. However, these boards should not be politicised and should operate transparently and efficiently.
– Focus on Market Development: While promoting exports is crucial, efforts should also be made to develop new markets for Nigerian products. This involves conducting market research, participating in international trade fairs, and establishing trade relationships with potential buyers in target markets. Some may argue that the NEPC is already doing a few of these activities. But whatever they can deliver right now should be seen as just scratching the surface when thinking of the efforts and funds that must be invested to reap the benefits attached to these international engagements that provide foreign exposure to Nigerian traders/exporters.
8. Enhance Institutional Capacity and Coordination
One keyword in global parlance regarding growing international trade is “institution-strengthening.
– Strengthen Trade Support Institutions: Agencies like the Nigerian Export Promotion Council (NEPC) must be adequately funded and equipped to promote and support non-oil exports effectively. It should be a simple semantic understanding that an oil-producing nation like Nigeria needs to invest a portion of its earnings from crude oil exports to develop a non-oil export economy. More importantly, while it is important to “reward those who worked for our election”, the government must seriously consider identifying agencies that are crucial to the attainment of its Renewed Hope Agenda” and ensure that such key trade support institutions are staffed with personnel who are not only knowledgeable but have proven track records in the institutions they are assigned to work at.
In 2002, the Federal Government, in response to the push by Engr. Mustafa Bello, the then Minister of Commerce, elevated the Ministry to a “Professional Ministry” status. A staff audit of that Ministry (which is supposed to the engine room of the country’s economic growth), will clearly show that it has never been staffed by “professionals”. You can almost count the number of career economists and investment experts on the fingers of one hand. Successive ministers have their own “Technical teams,” which they usually carefully select based on industry knowledge and expertise. The current administration must consider overhauling the workforce at this important Ministry and injecting it with the proper personnel.
– Improve Coordination among Agencies: Better coordination between various government agencies involved in export-related activities is needed to streamline processes and avoid conflicting policies, as well as reduce overlapping of functions and duplication of concepts, programmes, and projects. Trade Support Institutions must be dissuaded from maintaining the erstwhile “silo-mentality” rightly identified by the former Vice President, Professor Yemi Osinbajo.
9. Foster Public-Private Partnerships
– Engage the Private Sector:
The private sector is crucial in driving export growth. Government must actively engage with private sector stakeholders to understand their challenges, provide necessary support, and create a conducive policy environment. Thankfully, the Minister of Industry, Trade, and Investment, Dr Jumoke Oduwole, quickly prioritised collaboration with the private sector when she orchestrated the first Ministerial Export Consultation within her first thirty days in office. Continuous engagement with captains of key economic sectors is a sine qua non in pursuing a non-oil-export-driven economy.
– Promote Collaboration and Networking: Encourage the formation of industry associations, cooperatives, and export clusters to facilitate information sharing, knowledge transfer, and joint ventures. Collaborative efforts can help businesses overcome challenges, achieve economies of scale, and enhance competitiveness. One of the significant problems of Nigerian exporters is their fragmented structure (a contradiction to the title “Organised”). U UKAID technical assistance project PDFII, which wound up in 2020, identified this fragmentation as a significant challenge for export growth in Nigeria and, therefore, came up with (and funded the setting up of) the Network of Practicing Non-oil Exporters of Nigeria (NPNEN). The body was conceived to serve as an umbrella vehicle for all stakeholders in Nigeria’s non-oil exports value chain. It was launched with pump and pageantry at the Eko Hotels, Lagos, by the then CEO of Nigeria Export Promotion Council, Olusegun Awolowo Esq.
While it is difficult to exhaust ideas and concepts that will deliver promptly, President Bola Ahmed Tinubu’s Renewed Hope Agenda, implementing the policy imperatives suggested in this write-up can effectively transition Nigeria to a non-oil export-driven economy. However, success hinges on strong political will, commitment to good governance, and a sustained focus on implementing the outlined policy reforms and strategic initiatives. This transformation demands a collaborative approach involving the government, private sector, and civil society to build a more resilient and prosperous Nigerian economy.
Olufemi Boyede, CITP
International Consultant & Member, BoT,
Network of Practising Non-oil Exporters of Nigeria (NPNEN)
