• We need a radical new thinking to make the most of exports
Nothing better describes the continuing imbalance in our trade relations than the first quarter trade statistics showing Nigeria’s non-oil imports by sea surpassing exports by a staggering 463 per cent. According to National Bureau of Statistics (NBS) data, whereas the value of non-oil exports for Q1 was N604.4bn, value of non-oil imports for the same period stood at N3.4tn.
When broken down, the figures are certainly revealing. Between January and March, of the total N322.3bn trade in agricultural goods, exports accounted for N86.1bn while imports took a higher chunk of N236.3bn. Same with raw materials totalling N366.5bn; whereas Nigeria exported N36.4bn in value, it brought in a much higher value N330.08bn in imports; for solid minerals, the story is the same: of the total trade valued at N26.8bn, exports accounted for N8.99bn while imports took N17.8bn); same for energy goods valued at N10.7bn; exports came to N10.6bn and imports N32.1m. For manufactured goods, the difference is stark clear; of the outlay of N3.3tn, the value of exports was a mere N462.3bn in contrast with N2.7tn imports.
In other words, much as the Buhari administration is wont to showcase what is increasingly an aggressive push in the area of economic diversification, including an unrelenting curb through forex restrictions on so-called frivolous imports of which the country is said to possess the capacity to produce, tangible progress remains a tall dream both in the competitive arena of international trade and on the domestic front.
That we are not entirely surprised at this latest finding by the NBS is merely stating the obvious. The development, if anything, is merely an explication of the inherently flawed trade policies under which the country has been reduced to a dumping ground for all manner of manufactures with terrible consequence in the killing of local manufacturing efforts – and expectedly – jobs. It is certainly a reflection of the adverse infrastructural situation and how this continues to present formidable challenge to local entrepreneurial efforts with correlates in the multi-layered capacity issues of standards and competitiveness.
Whereas the identified problems are fairly well known, the indication is that ongoing therapies are either ineffectual or that the strategies need to be fine-tuned for better results. For, even if we concede that the Buhari administration has done quite a lot, albeit with far less resources in the area of infrastructure delivery, the scale of the problem is such that requires radical new thinking and initiatives, perhaps far beyond what the administration has conceived, or shown readiness to undertake. The starting point would naturally be to move more swiftly in the area of infrastructure delivery – of power and transportation – in particular.
Secondly, we need a deliberate redirection of our existing trade policies to ensure that the country not only derives optimal value from exports but also to ensure that our trade partners are not allowed to short-change our country.
A lot, no doubt, could be said of a few indigenous players making a foray into the global market; however, the preponderance of our exports is still done with nary value addition. A composite trade policy anchored on a solid industrial base is what is needed at this time – and urgently too – to buck the trend, as this is the only guarantee of optimal values for our poorly priced exports and long-term goal of reciprocity in trade. Without the twin policies in place, we guarantee that the current restrictions placed on access to forex for some categories of imports to boost their local production, and the ongoing interventions by the apex bank to give muscle to local producers, will ultimately be undone in the chaotic environment.