- • Non-oil trade hits $4.8b, says NEPC
The United States President, Joe Biden, has announced the removal of export duties on cocoa and some other produce from Nigeria as part of the U.S. government’s incentives to boost the nation’s economy.
Biden, who was represented by a member of U.S. Advisory Council on the Ease of Doing Business in Africa, Franklin Amao, stated this during the inauguration of the Second National Working Committee of Cocoa Farmers Association of Nigeria (CFAN), in Ado Ekiti, the Ekiti State capital.
Meanwhile, the Executive Director, Nigeria Export Promotion Council (NEPC), Ezra Yakusak, yesterday said the non-oil export sector recorded $4.8billion in trade through its Export for Survival campaign.
Yakusak spoke during the Second Nigeria Employers Summit themed, “Trade and non-oil export: Changing the narrative for rapid national development” organised by the Nigeria Employers’ Consultative Association (NECA) in Abuja.
He said: “If we want to survive as a nation economically, we need to export. There is no way out of it. Last year, a program called Export for Survival was launched and we are thrilled that by our campaign and our other programs, the non-oil export sector recorded about $4.8bn in trade. We have to imbibe a non-oil export culture to ensure our survival.”
Amao said the U.S. had implemented the African Growth and Opportunities Act which allowed products from Nigeria into America on free waybill. Biden advised Nigeria to take advantage of this additional opportunity by investing in cocoa production, processing and exportation to stimulate her economy to prosperity.
He said the American government was working relentlessly towards providing investment funds for Nigeria, noting that he was committed to the nation’s growth and development.
“The US government is dearly interested in seeing more private sectors involved in U.S. Companies to engage with the Nigerian economy. I want Nigerians to be aware of African Growth and Opportunities Acts (AGOA),which allows products coming from Africa into U.S. free. Nigeria should take advantage of this opportunity by investing in cocoa production, processing and exportation to stimulate her economy.
The Ooni of Ife, Oba Adeyeye Ogunwusi, called on Federal Government to partner CFAN to improve the cocoa industry.”
Ogunwusi, who was represented by the Asanya of Isanya Kingdom, Oba Muraina Adedina, said that Nigeria, currently the fourth largest cocoa producer in the world, has lived below expectation due to lack of infrastructure to process cocoa, most of which is exported in its raw.
The CFAN National President, Comrade Adeola Adegoke said the removal of duty will help to increase government-set prices for cocoa production. He urged the Federal Government to implement initiatives to build a robust, resilient and sustainable cocoa industry . He appealed to President Bola Tinubu to implement radical policies to boost investment in the cocoa value chain.
Nigeria’s cocoa and derivatives export to the United States has being on the increasing in recent years.
According to the International Trade Centre (ITC) trade map, export of cocoa beans, whole or broken, raw or roasted, alone rose from $2.058 million in 2018 to $9.307 million in 2020. Cocoa paste, whether or not defatted, rose from $52,000 in 2018, dropped to $21,000 in 2019 and surged to $1.778 million last year.
Also, the value of cocoa butter, fat and oil exported in 2019 rose from $430,000 to $942,000 in 2020.
A consultant to the World Bank, Prof Abel Ogunwale attributed the improvement to ongoing cocoa rejuvenation programmes taking place across the country. He added that the sector can make more money by processing it rather than transporting it raw overseas.
He expressed concerns about declining output due to aging and diseased trees, urging the government to support large rehabilitation and replanting schemes which provide farmers with improved planting materials, plant protection chemicals and fertilizers.
Ogunwale said aging cocoa trees, poorly-managed plantations and drought have all played a role in the sector’s decline, adding that if production is to increase, efforts must be made to boost local production.
He stressed the need for stronger collaboration and research to increase cocoa production, as well as improve its quality to conform to global market requirements. According to him, there are incentives at attaining production goals.
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Most stakeholders put the nation’s cocoa annual output at approximately 250,000 tonnes,
Nigeria, which is the fifth-largest cocoa producer, could see its projected output of 300,000 metric tons for the 2021/22 season reduce to 225,000 metric tonnes due a high risk of flooding this year, according to the association.
Director- General of NECA, Adewale Oyerinde, noted that NECA and its partners are aiming at expanding the employment net in Nigeria by deepening economic activities in the area of non-oil trade export.
According to him, the summit was organised to boost forex and to address declining oil export revenues.
He also stated that because of the lack of job opportunities, Nigerians are migrating in large numbers and the overall gain was the creation of job opportunities in the country and its development.
The NECA DG said: “We put this summit together because we know there is no way to increase forex without investing in the non-oil export. So, this summit offers a unique opportunity for us to expand the employment net but we need policies to support this.
“As the voice of the private sector in Nigeria, it is important to contribute to discussions that have to do with national growth. We have forex issues that are bedevilling the country, affecting our trade balance and ability to support organised businesses. And if they (businesses) can’t produce, the need to expand and generate employment becomes compromised and the value chain of the problem becomes gargantuan.
“The quantum of oil we produce, sell and how much we sell is out of Nigeria’s control, however, we can control our natural resources. We need to massively leverage our agricultural raw materials, export them and then we can generate more forex.”
Speaking further, the NECA DG listed export financing, regulations, and standardisation as challenges affecting non-oil export, stating: “We have issues with financing exports, except you have a strong will, manufacturing and exporting is not very attractive. There are bottlenecks in regulations and standardisation.”
As a solution, Oyerinde urged the government to refocus its efforts to improve non-oil exports to augment the much-needed forex from trade.
The Director – General of the African Development Bank, Nigeria Country Department, Lamin Barrow, stated that Nigeria’s exports of goods and services at 10.7 per cent, was the lowest among its middle-income peers in Africa, compared to 31.2 per cent for South Africa, 44 per cent for Mauritius, 44.6 per cent for Botswana while Tunisia and Angola stood at 42.1 per cent and 44.3 per cent respectively.
He noted that while Nigeria’s economy was one of the most diversified in Africa, the oil sector accounted for 75 per cent of export revenues and 50 per cent of all government revenue.
He said: “The limited non-oil exports have left the country exposed to the vagaries of global oil markets with attendant adverse impacts on the fiscal space and constraining development spending.”
Barrow added that the performance of the sector had deteriorated in the past five years with a Gross Domestic Product (GDP) contribution of seven per cent.
Also speaking at the event, President, Manufacturers Association of Nigeria (MAN), Francis Meshioye, expressed hope that the summit would launch immediate measures that will shape the non-oil exports, increase foreign earnings, spur investment, create jobs, and reduce the country’s debt burden.
