With the cry for diversification of the Nigerian economy growing ever louder, the Nigerian Export Import Bank (NEXIM) has announced that it will offer a N300 billion ($1.3 billion) funding to support Nigerian exporters. This move is expected to spark a surge in non-oil exports and further re-direct the income to other key growth sectors of the economy.
This was disclosed by Nexim’s Managing Director, Mr Roberts Orya, at the 2014 Nigeria Non-oil Export and Investment Development Conference organized by Business Journal in Lagos, adding that the bank is committed to further promoting export-import trade and attracting foreign investments. To date, the bank has facilitated upwards of $1.3 billion in foreign exchange, provided guarantees of over $430 million, while creating some 2,000 jobs.
As expected, he stressed the need for the diversification of the economy and the promotion of the non-oil sector, and implored stakeholders to seek out avenues to accomplish same. Tilting towards agriculture as a preferred destination for further investments, he revealed that other countries spend as much as 10 percent of their budgets on agriculture while Nigeria allocates just 3% to the sector, thus resulting in low output.
Dr Akin Ogunbiyi, Managing Director of the Mutual Benefit Group, while speaking on the theme “Nigeria – Beyond Oil and Gas,” said “It is incumbent on us as a country to pay much deserved attention to agricultural products, move towards greater industrialization, develop our solid minerals and revive other sectors of the economy.”
Non-availability of long term funds, poor infrastructure and transportation constraints were finally cited as key bottlenecks vis-a-vis trade and investment with other countries. Remedying these would be key to creating the enabling environment that enables the private sector to contribute its quota to the non-oil sector.
The African Development Bank (AfDB) says there are prospects in Nigeria for sustained growth driven by an improved performance of the key non-oil sectors – agriculture, information and communication technology, trade and services – but a decline in the contribution of the oil sector, as is currently the case, may dampen the positive outlook. In reality, the Nigerian economy is more diversified than was thought before the rebasing exercise that resulted in an 89 percent increase in the estimated size of the economy and a full disclosure of the contribution of promising non-oil sectors.
There is a national consensus, in a manner of speaking, and a case for further agricultural development because of its promising potentials. The Nigerian government is keen to drive that sector with its Agricultural Transformation Agenda (ATA) which adds value to exports of primary products in order to help the country climb up the value chain towards industrialization while also providing opportunities to bring the large informal sector progressively into the formal economy. This is a move that is sure to make growth more inclusive and boost the job creation, increase income and reduce poverty.
By Emmanuel Iruobe
