T he main issue of discussion in Nigeria’s economic space since the last quarter of 2015 has been the country’s slip into economic recession. First, the country’s economic managers expended considerable energy and resources trying to deny the eerie warning in the closing days of last year. Then, the National Bureau of Statistics affirmed a negative growth in the country’s Gross Domestic Product (and other critical indices) for the first and second quarters of 2016. Disturbingly, the managers of our country’s economy only began to admit that there was a problem just about the middle of 2016, a few months ago.
In admitting before a National Assembly Committee around the middle of June, that the country’s economy was, indeed, in recession, the Minister of Finance, Mrs. Kemi Adeosun, reeled out a “13-Point Agenda”, a list of steps either already being taken, or being contemplated by the Federal Government to rescue the country from the recession pit, within a short period. Economy watchers and strategists speedily criticised the Government’s timid response as none of the 13 steps was deemed smart enough to deliver a practical result, certainly not enough to address the very reasons why the country slipped into recession.
Since the Federal admission of the reality of recession, a plethora of seminars, workshops and strategic forums have been put together by almost all facets of the society, most with the same objective – to chart a course out of economic recession. The way the Nigerian polity has gone about confronting the recession monster gives one the impression that it is a plague from which there is no escape, an economic ebola, as it is deemed worse than the dreaded HIV Aids. One of the more constructive platforms to review and redress the recession conundrum was the recent Annual Independence Lecture on The Economy initiated by The Point Newspapers. The forum was aptly tiled What is the Economics of Change? And it drew dignitaries, speakers and panelists from the very creme de la creme of Nigeria’s socioeconomic landscape. Many thought provoking concepts, suggestions and strategies were put forward by such erudite speakers as the Emir of Kano and immediate past Governor of the Central Bank of Nigeria, HRH Sanusi Lamido Sanusi, the Governor of the State of Osun, Ogbeni Rauf Aregbesola, Intellectual Power-House and man of God, Pastor Tunde Bakare, etc.
While a lot of the points raised remain cogent, apposite and worthy of further consideration, I believe that one issue that still needs national understanding and desperate attention, is the potency of non-oil exports in lifting Nigeria out of the recession pit. In the first instance, we need to understand that recession, at least the Nigerian version, has quickly manifested in the form of depleted foreign reserves and acute dearth of foreign exchange, especially the US Dollar. What got the country into that abyss was the sudden drop in export proceeds from a mono-product on which Nigeria had depended for over four previous decades – crude oil. Suddenly, the international market price for the country’s crude crashed from nearly $148 per barrel to less than $30pb. Worse still, the emergence of the Niger Delta Avengers and some novel militant groups ensured that Nigeria began to lose almost 800,000 barrels per day and could no longer fulfil up to 60 per cent of its allocated quota of about 2.2MBPD.
While the (mis)fortunes of oil exerted an immediate negative impact, I believe, sincerely, that rather than see this as a death knell, our economic managers should actually begin to see a glaring opportunity to revamp our export proceeds receipts through other commodities. Away with oil should announce a new strategy to replace oil while keeping the national focus on generating export proceeds. This is where Non-Oil Exports come in as the only viable alternative. With over 5,000 exportable commodities available in Nigeria as well as over 48 Minerals and Gemstones in heavy commercial and exportable quantities, it certainly must baffle other countries of the world, why Nigeria would continue to bemoan her fate as a country in recession.
The availability of such huge export potential from non-crude-oil sources certainly demands a more serious, realistic and strategic response from the country’s MDAs, especially those with oversight responsibility for trade, industry ad economic growth. A school of thought believes that the Government’s agricultural transformation agenda will soon result in selfsufficiency in food production. Others believe that Solid Minerals hold the magic key, while yet others believe that increasing tax receipts will do the trick. The truth, however, remains that foreign exchange needs to be generated to refill the drying reserves as well as address the scarcity of same, for the country’s growing imports. Foreign exchange, such as Nigeria requires to stabilise again, can only come from radically increasing our sales to the world, and encouraging Diaspora remittances to come through the legal channels. While government seems to understand these imperatives, we have yet to see deliberate policies crafted to ensure they happen. The wide gap between the official exchange rate of the Dollar (N305/$) and the BDCs’ (read black market- N40/$) is enough to ensure that people and firms with capacity to sell abroad would rather do that through the unorthodox changes (Free Funds) than repatriate their export proceeds through the official channels, under the CBN’s recent draconian directive to “surrender 100 per cent of export proceeds to your commercial bank at the official exchange rate.”
Trade Support Institutions, including the Nigerian Export Promotion Council, must develop, discover and implement a completely new approach to selling abroad as the erstwhile strategies do not appear to be yielding desired results, certainly not as speedily as the country requires.
The Federal Government probably needs to do a deep study of the United States President Barack Obama’s National Export Initiative, introduced as immediate response to the economic recession of 2009. The initiative, instituted as Executive Order 13534 of 2010, which has now been extended, has clearly spelt out objectives, how to attain them and who does what. Indeed, the implementation necessitated the setting up of a Cabinet-Committee on Exports, comprising all ministries and agencies that have oversight for trade, and is chaired by the President himself. Exporting our way out of economic recession would require such a radical approach.
It is doable. We have the Human Resource capacity to do it. And we have the Commodities, Products and Services to achieve it.
