Nigeria Can Earn $100bn Annually from Non-oil Sector, Says Awolowo
Nigeria needs export revolution to rank among the greatest countries of the world with sound economy and foreign reserves comparable to the key global players, the Executive Director/CEO of the Nigerian Export Promotion Council (NEPC), Mr. Olusegun Awolowo, said wednesday in Ibadan.
Awolowo spoke while presenting a roadmap of the nation’s economy in a paper titled: “The ‘zero oil’ plan and an export revolution” he anchored during a Development Agenda for Western Nigeria (DAWN) Commission/NEPC dialogue on economic diversification with some representatives of six south-west states, at the headquarters of DAWN Commission, Cocoa house, Ibadan.
The event also had in attendance the management of the Odu’a Investment Company Limited led by its GMD, Mr. Adewale Raji.
The two-hour presentation centred on how Nigeria can evolve a workable economic plan and blueprint on agribusiness and other non-oil sectors that are capable of growing the nation’s external reserves, generating employment and by extension, drastically making the naira to rise against other currencies of the world especially the United States Dollar.”
He said Nigeria can lead the export revolution in Africa as a continent by leveraging on its diversities and natural resources in a way that “the One State One Product Programme (OSOP)” can be a success for all the states in the federation.
Awolowo said the Western Nigeria for example can grow cocoa, gold, rubber, palm oil, cashew, cassava etc, while the other states too can look inward and evolve workable resources that they can contribute to grow the nation’s economy and in the long run make Nigeria to fully earn more resources from a zero-based economy as a continental powerhouse.
He said to achieve the agenda, NEPC under him, has set a long term target of achieving a $100billion earnings for the nation from non-oil exports to salvage the country from its over dependence on oil.
Awolowo said the council was on a mission to diversify the country’s economy, buoyed by the words of President Muhammadu Buhari’s comment to a delegation of manufacturers last year that “Nigeria must begin to behave as if we have no oil,” and achieve government’s priority on economic diversification.
He said “Nigeria must think big to achieve big in the course of actually making huge revenue from exports.”
According to him, President Buhari’s comment has shaped Nigeria’s “zero oil economic agenda, and is essential to build a strong Nigerian economy for the future.
“For years, Nigeria has imported thousands of goods worth over US$50 billion a year, which we pay for mainly with crude oil proceeds of over $70billion each year.
“Our fears have now materialised, in the past two years, crude oil prices have fallen 60 per cent and Nigeria’s earnings have likewise fallen by at least $35billion, inevitably leaving a financial hole in the economy.
“The pressing question now is how to fill this funding gap- and the answer is simple: Nigeria must quickly find an alternative to oil revenue.
“If Nigeria broadens and grows its export basket, a positive chain reaction begings throughout the economy. The logic follows- when you grow exports, national output (agriculture, industry, solid minerals) will also grow; local businesses will grow; supporting infrastructure will expand; and jobs and investments will definitely follow. The overall macro impacts result in growing foreign reserves (from export forex) and a more resilisnt economy.
“At NEPC, first, we set a long term goal of earning over US$100 billion from non-oil exports, that is 20 per cent of today’s GDP. When compared with Export to GDP, ratios of other emerging market countries, this is reasonable- China’s is 24 per cent, Brazil 12 per cent, South Africa 31 per cent and Malaysia 76 per cent. Nigeria’s long term goal is however further broken down into two mid-term targets- which is to grow non-oil exports from US$5 billion today to $18billion by 2019 and $30billion in non-oil exports by 2025. Growing non-oil exports six fold in nine years will be a feat indeed, but then, again, these are extraordinary times, and we need extraordinary economic action.”
Awolowo added that in implementing this plan, hundreds of thousands jobs will be created every year from numerous activities of the non-oil economy.
He said: “The zero oil plan identifies 21 priority countries as markets for Nigerian products, termed ‘Export 21,’ and 11 strategic export products with high financial value to replace oil. “These include petrochemicals, palm oil, cocoa, soybeans, rubber, to name a few. To achieve this, Nigeria must scale up domestic production to levels unprecedented and create competitive channels to move cargo and get goods into foreign markets.
“The plan envisages increases in total non-oil export volumes in Nigeria which should grow by 70 million tonnes, clearly a logistical challenge that would require upgrades on major transport corridors to get goods from Nigeria’s hinterlands in every single state of the federation to ports in Lagos, Port Harcourt and Calabar. The plan facilitates export aggregators to source products from millions of micro, small and medium sized enterprises, which ensures our grassoots, youths and households also feel the economic impact of exports.”
Awolowo who exhibited confidence in the success in the diversification of Nigeria’s oil driven economy to non-oil export, said as a council, they are prepared for the task of achieving this lofty mission.
He said: “We are not starry-eyed optimists, as moving a Nigeria with zero oil will not be easy. But we should remember that we once had a country that was zero oil. The questions to ask are: what happened to our proud history in palm oil, cocoa, groundnuts, cotton? We were the toast of the world, where are these products now? We know in good days Nigeria typically makes over $70billion annually from crude oil exports, but the world is bigger than oil. Only three of the top 20 exporters in the world depend heavily on oil exports, and today even those three are fast diversifying.
Indonesia makes over $18billion from only palm oil exports (we understand the Indonesians took their first plan seed from Nigeria over 50 years ago); Brazil makes $17billion from soybeans; Saudi Arabia makes over $30 billion from petrochemicals Nd Bangladesh makes $5billion from T-shirts.”
The Director General DAWN commission, Dipo Famakinwa, assured Awolowo that the commission was ready to support and partner the council, noting that “NEPC is strategic to diversification of Nigeria’s economy.”