In a significant setback for Nigeria’s economic diversification goals, non-oil exports earnings witnessed a stark decline of 24% year-on-year, falling to $4.46 billion in the first nine months of 2023, compared to $5.88 billion during the same period in 2022. This challenging trend defied the government’s multiple efforts to boost this vital source of foreign exchange.
The Central Bank of Nigeria (CBN) attributed the decline to lower commodity prices in the global market. However, experts are pointing to the cancellation of non-oil export-focused policies by the new government as a primary factor behind the downturn.
According to quarterly economic reports from the CBN, non-oil exports faced a consistent quarterly decline. In Q1’23, non-oil exports dropped by 11.8% quarter-on-quarter (QoQ) to $1.72 billion. The decline persisted in Q2’23, witnessing another 2.3% QoQ reduction to $1.68 billion. By Q3’23, non-oil exports further dwindled by 3.5% QoQ to $1.06 billion.
Consequently, the total earnings from non-oil exports dwindled by $890 million over nine months, plummeting to $1.06 billion in Q3’23 from $1.95 billion in Q4’22. This resulted in the share of non-oil exports in the nation’s total exports sliding to 7.7% in Q3’23, marking a 5.7 percentage points decline from 13.4% in Q4’22.
Renowned economist Marcel Okeke attributes the decline to the cancellation of policies encouraging non-oil export repatriation and recent forex reforms by the CBN. The discontinuation of the CBN’s Race to $200 billion initiative, aimed at repatriating $200 billion from non-oil exports within a specific timeframe, has left a void in industry initiatives.
Nnamdi Nwizu, Co-Founder of Comercio Partners Limited, identifies structural impediments within the Nigerian economy as a significant contributor to the decline. Inadequate infrastructure, regulatory bottlenecks, and bureaucratic complexities are hampering efficient export processes, discouraging potential exporters and hindering the non-oil sectors’ overall performance.
Nwizu emphasizes the need for streamlined regulations, improved infrastructure, and diplomatic efforts to foster international trade relationships. Addressing these challenges is crucial to reviving Nigeria’s non-oil export sector and achieving sustained economic growth.
