Journalism of Courage

Nigeria needs deep dive into non-oil exports — Zenith Bank founder, Jim Ovia

Ovia said these are the areas where our Gross Domestic Product (GDP) continues to grow.

The Founder and Chairman, Zenith Bank Plc, Jim Ovia, has advised the federal government on the need to deep-dive into non-oil exports.

According to him, intellectual capital and other aspects of products manufacturing, telecommunications, information technology are very valuable to the growth of Nigerian economy.

Ovia said these are the areas where our Gross Domestic Product (GDP) continues to grow.

Ovia, who disclosed this at Zenith Bank’s 7th Annual International Trade Seminar on Non-oil Export on Wednesday in Lagos, noted that Nigeria’s GDP contribution in terms of oil is not really much.

He said: “The GDP contribution from oil well was only about 11 percent and the balance comes from services and other aspects of the economy. Perhaps we need to deep-dive into non-oil exports.”

Persecondnews reports that the seminar with the theme : “Unlocking Opportunities in Nigeria’s Non-Oil Export Business”, is part of Zenith Bank’s efforts to support the Central Bank of Nigeria’s initiatives to grow the country’s non-oil export sector.

Participants were drawn from trade practitioners, local and foreign exporters, manufacturers, financial institutions, as well as government agencies.

Speaking on the theme of the seminar, the CBN Governor, Mr Godwin Emefiele, described the theme as both timely and appropriate.

According to Emefiele, the global economy and the structure within are changing rapidly.

“The previous world economic order underpinned by globalization seems to be suffering disruption lately. As the governor of the Central Bank of Nigeria, I have long recognized that Nigeria cannot rely on other countries to get us on the track of sustainable economic growth.

“So over the years and under my leadership at the central bank we have heralded several initiatives and interventions and devices on the non-oil sector because of our firm believe that the non-oil sector holds enormous potentials to contribute to employment generation, wealth creation and economic growth of our country.

“The initiatives and interventions of the CBN seeks to bridge the gaps in the non-oil export sector by providing funding for working capital and capital expenditure that may be deployed to value chain chain expansion,” he said.

The CBN Governor listed the initiatives as N500 billion stimulation non-oil facility, which he disclosed was introduced by the CBN in October 2017 to diversify the economic base of the nation’s economy and expedite the growth of the economy in the non-oil sector in Nigeria.

“Secondly, N300 billion real sector facility using the differentiated cash facility in DCRR; thirdly the commercial agriculture credit scheme cards. The primary purpose of this initiative was to provide funding to the agricultural sector targeting agricultural commodity production, processing, storage, farm input supplies and marketing.

“There is also the anchor borrowers program. This program was created to provide economic linkages between smallholder farmers and representatives of companies involved in the production and processing of key agricultural commodities.

“This strategy is to increase banks financing, to improve agricultural productivity by creating an ecosystem that drives value chain financial.

“We also have the creative industry financing initiative. This was an initiative of the CBN in collaboration with the bankers association as part of efforts to boost job creation in Nigeria particularly among the youths.

” Our areas of interest includes technology, fashion, movie production, distribution and music, and we also had the N600billion SME facility.

“I am delighted to note that through our concerted efforts and those of our stakeholders the total value Of Nigeria’s non-export grew from a low of N344 billion in 2016 to about N2.14 trillion in 2021.

“While this may seem like a laudable increase, we have to recognize that the room for improvement is just too big for us to rest on our ores. Many comparator countries are doing much better,” Emefiele said.

In his keynote address, the President and Chief Executive of Dangote Industries Ltd, Alhaji Aliko Dangote, noted that Nigeria’s non-oil export is low compared to other Africa’s top oil producers.

He further noted that this had exposed the economy to oil price and production risk, adding “right now we are not facing issues with oil prices, but we are facing issues with export or production because of oil theft.”

According to Dangote, export opportunities abound in Nigeria but there are two main routes- import substitution and export-oriented industries.

“import substitution strategy is ideal for economies like Nigeria which has a large domestic market and a huge import bill. Investors can build industries which initially target the domestic market, then subsequently target export markets as they build scale and competitiveness.

“Export-oriented industries builds on a country’s competitive advantage, example access to cheaper natural resources or labour, to develop industries that are primarily geared towards export,” he explained.

He said Nigeria has a little over a decade successfully achieved import substitution in the cement industry with Dangote Group playing a pivotal role.

Dangote said: “We converted our cement import terminals to export terminals capable of handling eight million tons of clinker. To date, we have exported three million metric tons of cement/clinker.

“Our recently commissioned 3MMtpa fertilizer plant has commenced export operations. We have commenced export of fertilizer to India, North and Latin America. At a steady state, we will export 2 million tons per an um after meeting domestic consumption.”

He also noted that cash crops have been a major component of non-oil exports, adding “there is room to grow this.”

On the ease of doing business for exports, Dangote stressed the need to reduce port charges by 50 percent to promote export competitiveness and drive implementation of single window/e-Customs to achieve a target of 48 hours clearing.

Also speaking, Mr Olusegun Awolowo, trade expert and immediate past Executive Director of the Nigeria Export Promotion Council (NEPC), said Nigeria must survive in a world in which “we sell no more oil”.

On ‘The Zero Oil Plan’, Awolowo noted that it is a strategic plan to diversify Nigeria’s export portfolio to include non-oil exports such that 20 percent of the GDP is attributed to non-oil exports.

“In NEPC, We were looking at $30 billion in 2025 in non-oil exports and 500,000 additional jobs created annually.

“The private sector is key to the success of the zero oil plan. The federal government and private sector need to work assiduously with NEPC to make the attainment of a zero-oil economy a reality,” the late Chief Obafemi Awolowo’s grandson said.

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