Friday, July 22, 2016 9:37am /FBNQuest Research
The latest monthly Economic Report from the CBN puts non-oil exports provisionally at US$364m in April, indicating a decrease of 27% from the preceding month. The fall in receipts was seen across all components other than minerals. The largest proceeds came from manufactured products, which earned US$204m.
The Nigerian Export Promotion Council recently disclosed that half of its registered exporters are inactive. We suspect that fx sourcing challenges have stifled activity as most inputs used in processing export products are imported.
The breakdown by sector in April shows that proceeds from manufactured, agricultural and mineral products accounted for 56.0%, 7.1% and 25.6% of total receipts respectively.
Export earnings from agriculture in April stood at US$26m, less than 10% of total earnings. To boost receipts from this sector, the FGN recently developed a cashew segment strategy which is expected to earn Nigeria US$200m within the next two years. Vietnam and India remain the major recipients of Nigeria’s exported raw cashew.
This week, the federal ministry of agriculture revealed its roadmap for growth titled The Green Alternative. The initiative seeks to increase agricultural activity by 85% in crop production, and 15% in livestock and other non-crop produce.
If implemented effectively, it is expected to grow the sector’s share of non-oil exports earnings to 75%, thus serving as an alternative significant source of foreign exchange earnings.
Although the CBN’s flexible fx market regime is yet to gain full traction, non-oil exporters are now able to convert their export proceeds at a (broadly) market determined rate. This should spur growth within the sector over the medium term.
1. New initiative for non-oil exports
2. Nigerian Export-Import Bank Operating Guidelines for the Export Rediscounting & Refinancing Facility
3. Non-Oil Export Stimulation Facility Operating Guidelines
4. Nigerian Export-Import Bank Operating Guidelines for the Export Rediscounting & Refinancing Facility
5. Non-Oil Export Stimulation Facility Operating Guidelines
6. Revised Guidelines for the Operation of the Nigerian Inter-Bank Foreign Exchange Market
7. The 5 growth drivers for the non-oil sector from Q1 2015 National Accounts
8. The MPC and Encouraging Non-Oil GDP Growth