Introduction: Nigeria’s Untapped Export Potential
Nigeria is a land rich in resources, yet its position in the global export market doesn’t fully reflect its potential. While some states in Nigeria are more naturally endowed than others, each has something significant to offer to the country’s economic growth. However, inefficiencies in managing these resources have hindered their optimal use. In this series, we will explore Nigeria’s export potential by examining the resources and products each state offers. We will also analyse their current performance and identify opportunities for growth. In this introductory article, we focus on Nigeria’s overall performance in the global export market and its potential to expand beyond oil.
Current Export Landscape: Major Markets and Products
In 2020, Nigeria’s major exports were to India, Spain, Netherlands, South Africa, France, China, Portugal, Cameroon, Turkey and Italy. The major items exported were Mineral Fuel, liquefied natural gas, vessel and other floating structure, and others. For Agri-Products, the top 10 exported items include sesame seeds, fermented cocoa beans, superior cocoa beans, shelled cashew nuts, deshelled cashew nuts, natural cocoa butter, shea nuts, frozen shrimps and prawns, ginger and coconuts.
The Dominance of Oil Exports and Emerging Non-Oil Opportunities
Crude petroleum and petroleum gas constitute a larger part of Nigerian’s export with non-oil export taking only a minute part of the percentage. However, with the intervention in the Nigerian Export Promotion Council (NEPC), that seemingly minimal part of non-oil export continues to improve significantly. Even though oil exports generate more income for the government, the contribution of each sub-element to GDP is very low. Also, the job created from oil exp oil exports is also low. Additionally, compared to other countries exporting crude oil, Nigeria’s contribution only accounted for 5.4% of $992b recorded in 2019.
Comparative Analysis: Nigeria’s Position in the Global Market
Comparing Nigeria’s share of some non-oil exports to those of other major exports of the same products, it is also evident that Nigeria has a long way to go. For instance, as of 2019, the total market size for cocoa beans was about $9.45b and Nigeria’s share of this was just $0.7b (7.2%), while Ghana had 17.3%, Ecuador 7.05% with Cote D’Ivoire having the largest share of 41%. For cocoa butter, the market size was $5.86b with Nigeria contributing $6.4b (0.1%), while Netherlands, Indonesia, Malaysia, Germany, Cote D’Ivoire, France, and Ghana contributed 26.8%, 13.8%, 10.7%, 8.86%, 7.77%, 7.04% and 5.89%, respectively. Although, statistics like this seem unpleasant, it should give some hope in the sense of the huge opportunity for investment and expansion that these products offer Nigeria if we are willing to do the work required to make significant improvement.
Challenges Facing Nigeria’s Non-Oil Export Sector
Still on the statistics for non-oil exports, the global market share for spices was $2.93b and Nigeria’s share was $43m (just 1.4%), while countries like China, India, Netherlands and Germany dominated the market with 25.4%, 13.6%, 7.37% and 4.14%, respectively. Even though certain relevant bodies might have been ready to commit to the expansion of the non-oil exports sector, the major challenge has been the Federal government. This is why it would make a significant impact if the present administration could do its best to ensure that the sector is given some level of priority at the federal level. There are other factors that could inhibit businesses or individuals from investing in the non-oil exports some of such factors include lack of sufficient capital, tedious process of obtaining relevant documents, no representative in the country of destination, etc. Prospective exporters looking to surmount this challenge can reach out at info@3timpex.com.
Conclusion and Final Thoughts
Despite the current statistics, these figures should inspire, not discourage. With the right resources and increased awareness, Nigeria’s non-oil export sector has the potential to flourish in the coming years. Intending exporters can tap into these opportunities posed by these non-oil products for exports by exploring promising markets, investing in specific value chains, engaging with export promotion agencies, etc. All other things being equal, if these opportunities are well-tapped, Nigeria would do much better in non-oil exports in the years to come.
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