Non-oil Exports Provisionally At US$1.26bn in Q1 2019; Rises 15% QoQ and 41% YoY


Tuesday, May 28, 2019   / 08:55AM / By FBNQuest Research    


The latest quarterly Economic Report from the CBN puts non-oil exports provisionally at US$1.26bn in Q1, indicating rises of 15% q/q and 41% y/y. The sectoral breakdown shows that there was a significant increase in receipts from all sub-sectors. Receipts from manufactures posted the highest increase, of 19.1% q/q to US$190m. However, they accounted for just 15.1% of total earnings. Meanwhile, industrial goods and food products accounted for 10.8% and 2.5% respectively.

Export earnings from minerals stood at US$750m and comprised the largest share (59.2%) in Q1. The solid minerals industry remains hugely untapped but we note that there has been visible traction over the past eight quarters. Challenges hampering its expansion include the lack of accurate minerals production statistics and a severe shortfall in concise geosciences data.

Export receipts from agricultural products grew by 12.8% q/q to US$160m and accounted for just 12.4% of total receipts in Q1. We understand that exports of some agricultural products are rejected by a few countries due to poor quality. Tackling logistics issues such as storage, packaging and warehousing should assist with improving standards.  


Non-oil export earnings by sector, Q1 2019 (% shares) Total: US$1.26bn

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Sources: CBN; FBNQuest Capital Research

The FGN has reiterated its commitment to boosting non-oil exporters through payment of the export expansion grant (EEG). We learn that there is a N1.2trn EEG payment backlog. The claims cover a backlog of ten years (2007 to 2016) for about 270 companies. The FGN has converted the backlog into national debt, to be paid through promissory notes. However, payments are still pending due to the slow pace of verification.

The African Continental Free Trade Area (AfCFTA) is due to become operational on 07 July. Ideally, the AfCFTA should encourage export activities from Nigeria. However, manufacturers continue to struggle with producing profitable standard products able to compete in the global village due to infrastructural issues. Nigeria is yet to sign the agreement.

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