Post Covid-19: Non Oil Sector To The Rescue

96

The desire of President Mohammadu Buhari to fund part of the nation’s budget mainly from non-oil exports is quite laudable. This quest to depart from the usual reliance of funding our budget from crude oil sales is long over due given the economic crisis that engulfed the world recently.

From rising cost of food items, crash in stock prices and crude oil to an unprecedented high cost of living, it is crystal clear that any nation that fails to diversify its economy but depends solely on one source of revenue to drive its economy is laying a foundation for crisis and indeed, bequeathing an unpredictable future for its generation.

The recent global economic crisis has again drawn our attention to the fact that repositioning our non-oil export sector is the only road map to sustainable economic development. There is no gain saying the fact that soon there will be a major break through by the industrialized and technologically advanced countries of the world regarding the issue of alternative energy source.

We are now too familiar with issues like Biofuel, an alternative source of energy which is produced from any (biological) carbon source, the most common sources being photosynthetic plants while steady progress is being made in other areas like solar power, wind mill etc in an effort to reduce over dependence on crude oil and gas supply from OPEC countries like Nigeria.

Reports have further confirmed that Biofuel industries are rapidly expanding in Europe, Asia and the Americas. The question, therefore is with all these developments in the energy sector coupled with the fact that the economies of the developed countries are knowledge-driven (not resource based) how then do we reposition our non-oil export sector to guarantee a secured future for us all particularly in the wake of dwindling oil fortunes.

The answer to this question is not far-fetched as all we need to do especially those saddled with the responsibility of running the affairs of the country is to channel our developmental effort towards the non-oil export sector by ensuring that agriculture and our agro-allied industries are given all the necessary support by the federal and state governments.

Reason being that agriculture, till date, remains the only sector that can provide the leeway to productively engage our (restive) youths, create employment opportunities as well as for wealth creation.

Besides, for Nigeria to belong to the league of highly industrialized nations there must be concerted effort towards revitalizing the agricultural sector, as it remains the only sector that guarantees regular source of raw materials for some of our ailing and now moribund industries.

And until we are determined to reposition our non-oil export sector by conscientiously initiating and implementing policies that will catapult our economy to the league of 20 largest economies of the world, we will continue to depend on crude oil sales as our only source of revenue.

The saying that a journey of a thousand miles begins with the first step aptly describes the manner in which the funding of our budget from non-oil revenue can be realized. But adopting a defeatist approach to the issue is definitely not the way to go rather putting the right structures in place viz – feasible policies, adequate support for our entrepreneurs particularly the small and medium ones in terms of adequate incentives (tax holidays, interest free loans etc), regular power supply, good road networks among others, should be top on the list of things that can be done to reposition the non-oil export sector for sustainable economic development.

There is no doubt that to realize these objectives is a Herculean task. However, repositioning the sector for sustainable economic development can be realized through the Nigerian Export Promotion Council (NEPC), an agency statutorily responsible for driving activities in that sector. Since its establishment 42 years ago, the Council, within the limited resources available has put in place structures that have, significantly, assisted in growing the sector.

Only recently, the Nigerian Export Promotion Council unveiled its service charter that would raise the expectations and define the standard of service to be provided to customers and members of staff.

The move is part of the strategies to stimulate improvements and reforms in the way businesses would be conducted in the export promotion agency.

The charter would also guide the activities of service provision and delivery as well as enable the agency to process exporters’ certificate within 24 hours provided all the relevant documents and payments are submitted and confirmed.

The unveiling of the charter would further give impetus to the promotion, development and diversification of Nigeria’s exports trade.

It would also assist in promoting the development of export-related industries in the country as well as spearhead the creation of appropriate export incentives.

Also, early this year, the Agency, in collaboration with the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT), inaugurated a 26-member committee in Lagos with the aim of researching and recommending procedures that simplify trade procedures and avert trade bottlenecks. 

The Nigeria-UN/CEFACT Trade Facilitation Committee (NUTFAC) functions to streamline the documentation procedures and promotion of a single window for exporters is working in tandem with the National Committee on the Single Window chaired by the Vice President of Nigeria, Professor Yemi Osibajo. The single window for export is a trade facilitation mechanism that allows the submission of all trade-related documents for exporters at a single entry point.

At the workshop, Mr Olusegun Awolowo, Executive Director of the Nigerian Export Promotion Council (NEPC) and champion for zero-oil export in Nigeria, in his keynote address said in line with UN/CEFACT’s drive to introduce workable e-business solutions, the Single Window for export is aimed at opening up opportunities for Nigeria by increasing benefits from international trade and contributing to economic growth and poverty reduction.

He further expressed that the committee marks an important turning point in Nigeria’s quest to re-establish a collaboration between the Public and Organised Private Sector (OPS) in addressing the growing challenges of trade.

In his presentation, Mr Aleksei Bondarenko, UN/CEFACT Single Window Domain Coordinator and Professor of MGIMO University, Russia advocated that every country should be a part of the single window, and for it to be effective, a common trading language between the government and businesses is pivotal for success.

The committee comprises of institutions from both the public and private sectors; Nigerian Export Promotion Council (NEPC), Federal Ministry of Industry, Trade and Investment (FMITI), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA-Group), Nigerian Agency for Food and Drug Administration (NAFDAC), Central Bank of Nigeria (CBN), Standards Organisation of Nigeria (SON), Nigeria Customs Service (NCS), MAN Export Group, Federal Ministry of Budget and National Planning, Federal Ministry of Finance, Federal Ministry of Agriculture and Rural Development (Department of Veterinary and Pest Control Services, Federal Ministry of Foreign Affairs, Federal Produce Inspection Service (FPIS), Nigerian Agricultural Quarantine Service (NAQS).

Not long after, the House of Representatives asked the management of the Nigerian Export Promotion Council (NEPC) to redouble its efforts toward improving non-oil revenue.

Chairman of the House Committee on Commerce, Mr Femi Fakeye, gave the charge in Abuja on during an interactive session with the Chief Executive Officer of the NEPC, Mr Olusegun Awolowo, and other members of management team during an oversight function to the council.

Fakeye stated the need for the council to attain minimum of 35 per cent of non-oil export ratio in no longer distance.

He said the most important thing for us to realise is that this country needs this effort that NEPC is saddled with; that is to push for non-oil export.

He said: “Apart from the existing fact that we all know; the country is still dependent much on crude oil sales.

“We should be doing about 35 per cent minimum non-oil export. I don’t think we are anywhere close to that.”

 

Awolowo, in his remarks, sought the intervention of the National Assembly on the full implementation of the 10 per cent freight collections by the Nigerian Maritime Administration and Safety Agency, being the only statutory source of fund for the council.

The NEPC boss decried that since December 1992, it had never been implemented despite the positive directives by the president, Attorney-General of the Federation and the National Assembly.

Awolowo stated the council’s resolve towards resolving issues bothering on the outstanding payment of Export Expansion Grant and disclosed that over N50bn worth of EEG was disbursed annually to exporters.

He added that there was a need to enforce payment of three per cent of the value of every EEG payable to a beneficiary as a source of revenue to the NEPC to offset the cost of administering the grant.

According to him, efforts are underway to increase Nigeria’s cocoa export, which currently stands at 300,000 metric tonnes of $2bn out of the $80bn revenue being generated by European countries where cocoa is being exported to. He noted that it would raise revenue of 22 non-oil products that could generate up to $30bn yearly.

Awolowo added that Nigeria could also take advantage of the $150bn petrochemical global markets by selling its abundance petrochemical products as well as $31bn palm oil market, where countries like Malaysia and Indonesia leverage on.

He also announced that the NEPC planned to increase Nigeria’s revenue by extra $150bn through the exportation of palm oil.

Obviously, the non-oil export sector boost of huge, yet untapped potentials that can drive our economy, and thus reduce our dependence on crude oil. Take for instance our music and movie industry. Through dint of hard work, creativity and sheer determination to succeed players in that industry have succeeded in developing and promoting that industry to the level it is presently, in spite of the menace of piracy and seeming lack of support from our mega banks. Oil and gas will not last for ever, now is the time to concentrate our effort towards diversifying our economy in order to ensure sustainable economic development by repositioning our non-oil export sector.

aoloruntoba@yahoo.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here