Nigeria Economy | |
Nigeria Economy | |
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PROSHARE | |
PROSHARE |
Wednesday,
January 29, 2020 /09:15 AM / By FBNQuest Research
/ Header Image Credit: FBNQuest Research
The
latest quarterly Economic Report from the CBN puts non-oil exports
provisionally at US$960m in Q4 2019, indicating decreases of -41% q/q and -17%
y/y. The q/q decrease was largely driven by a sharp decline in export receipts
from minerals and food products which stood at US$52m and US$50m respectively.
The sectoral breakdown shows that export receipts from manufactured products,
agriculture and industrial sub-sectors declined by 16%, 23% and 3% respectively
when compared with the previous quarter. For full year 2019, receipts from
non-oil exports totalled US$5.4bn.
The CBN's commentary shows that export receipts from food products
accounted for 5.3% of the total. The decrease in export receipts for this
segment was largely driven by reduced exportation of fish, alcoholic and
non-alcoholic drinks.
To sensitize Nigerians on the country's export potential and encourage
state governments to focus on production of non-oil products in which they have
competitive advantage, the Nigerian Export-Import Bank (NEXIM) is conducting an
Exporter Enlightenment Programme across each geo-political zone. The programme
is scheduled to kick off this month.
To stimulate export activity, the FGN has made provision of N2.5bn tax
credit for non-oil exporters in 2020. The tax credit is not cash funded, but
provided as a Negotiable Duty Credit Certificate. It is expected to bring some
relief to non-oil exporters.
Total non-oil export earnings by
Exporters (US$bn) |
|
Sources::
CBN ; FBNQuest Capital Research |
The African Continental Free Trade Area (AfCFTA) agreement is expected
to promote regional integration and boost diversification. For Nigeria to
produce profitable standard products that can compete in markets across Africa,
structural challenges (especially power shortages) need to be addressed.
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