Thursday, June 23 2016 9:15AM /FBNQuest Research
The latest quarterly Economic Report from the CBN puts non-oil exports provisionally at US$1.02bn in Q1 2016, indicating an increase of 39% from the preceding quarter but a 44% decrease on a y/y basis.
The fall in receipts on a y/y basis can be traced to the steep decline in receipts from industrial and agricultural export products. The largest proceeds came from manufactured products, which earned US$546m.
The breakdown by sectors in Q1 2016 shows that proceeds from manufactured, agricultural and industrial products accounted for 53.8%, 8.6% and 25.1% respectively.
The Nigerian Export Promotion Council (NEPC) recently disclosed another strategy, known as “the zero oil plan” geared towards boosting the country’s non-oil exports. The plan identifies 21 priority countries as markets for Nigerian products termed “Export 21” and eleven strategic export products. These include palm oil, cocoa, soybeans and rubber.
We see that the CBN has set aside N500bn (US$1.8bn as of this week) for loans to non-oil exporters. Loans for up to three years will be granted at a maximum interest rate of 7.5% per year while those with a tenor above three years will be granted a maximum rate of 9% annually.
This facility should improve export financing and offer opportunities for exporters to scale up their businesses.
Given the recent fx policy announcement, non-oil exporters can now convert their export proceeds at a more market determined rate. This should encourage growth within the sector.