In
real numbers, Nigeria’s BOP was in a huge black hole at $4.54 billion in Q3 2018.
Undeniably, it wiped off its losses in Q4, inching up moderately to a surplus
of $2.8 million, which the Godwin Emefiele-led bank considers “a significant
improvement.” This is promising, but the challenge is how a mono-product
economy like this will sustain the gains.
Fellow Nigerians, are you aware that our crude oil will soon
become useless? Yes, it will, in no distant time, become valueless owing to the
fact that the countries that rely on it as their only source of energy are
developing more affordable alternative sources of energy. When this finally
happens, what will we do? How are we currently preparing for this imminent
economic doom? Which other sector will continue to stabilize our economy?
Nigerians, the only solution is developing the agricultural sector. In fact,
this is the only solution. Very soon, the major source of revenue will become
agriculture and agro-exports. How are you positioning yourself to play big in
agro-export business? Why don’t you get a practical manual that explains the
stages of export trade from processing and packaging of commodities to receipt
of payment by the foreign buyers? Yes, arm yourself with the contemporary
trends in export trade. This manual explains export operations, export
management, export documentations and methods of payment in export trade? Yes,
it is a contemporary step-by-step guide to export trade. It tells all the
contemporary dynamics in export trade. To get it, click on the link below:
Typically,
balance of trade, which is defined as the monetary transactions between a
country and the rest of the world, could indicate economic success when it is
in surplus. Although the Q4 result is a marginal achievement, it tells only
half of the story. Intrinsically, it was driven by crude oil and gas exports. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
In
2017, for instance, the country recorded a trade surplus of N4.03 trillion.
That year, the National Bureau of Statistics noted that this was because oil
exports, at over 93 per cent, outweighed imports. “Nigeria’s manufacturing
capacity is limited,” the NBS said, “so it imports most of what it consumes.”
Obviously,
without oil and gas, Nigeria’s BOP would be in the red. In 2016, when oil sold
for an average of $40.68 per barrel, Nigeria logged a BOP deficit of N290
billion. With oil selling higher in 2017 at an average of $52.51pb and $69.52pb
in 2018, the country witnessed better trade balances. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html This is the crux of the
matter: the economy would likely collapse in record time if oil and gas
(income) were to be taken out. Consequently, with oil selling for about $27pb
early in 2016, the economy slipped into what would become a 15-month recession
that August.
Repeatedly,
government has stated that it would end the dependence on oil, but such avowal
has not significantly changed anything. In 2017, the data showed that cocoa
beans exports to the Netherlands, Malaysia and Indonesia, contributed
fractionally with 0.37 per cent of exports. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html This crop was a major
foreign exchange earner in the three decades to the 1970s, but because of the
ruinous fixation on oil, Ivory Coast and Indonesia have taken over the prime
spots off Nigeria. Consequently, Ivory Coast netted $3.79 billion from cocoa
beans exports in 2017, $1.04 billion from cocoa paste and $634 million from
cocoa butter, according to the US-based Observatory of Economic Complexity.
It is
a similar debacle in palm oil, rice, wheat, machinery, raw materials for the
real sector and information technology. A March 2019 report by the CBN stated
that Nigeria – once the global leader in palm oil exports – spent about $500
million to import the product in 2017. Although domestic rice production has
climbed up because of the Anchor Borrowers Programme, Nigeria still imports
rice to augment the shortfall. There is a hefty bill on this, but the
haemorrhage goes on. In cassava, its share of 20 per cent is the highest
globally, but it is a net importer of ethanol. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Nigeria’s
agriculture and agribusinesses are underperforming. According to the World
Bank, many developing countries such as Brazil, Indonesia, and Thailand now export
more food products than all of sub-Saharan Africa combined. Also, because
domestic production has collapsed, Nigeria spends $4 billion on textile imports
annually. It is a net importer of refined petroleum products, though it is
Africa’s largest producer of crude oil. The NBS said petrol imports alone cost
Nigeria N2.3 trillion in 2018. With its four moribund domestic refineries, this
is senseless.
Worse,
the prices of locally produced goods are not competitive in the international
market because the country lacks good roads, railways and electricity. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
For
years, the Apapa ports, which host 70 per cent of Nigeria’s maritime trade,
have been locked down because of decrepit roads, crude technology and
administrative incompetence, evident in a slew of vetting agencies. With
lending rates between 15 and 40 per cent, locally manufactured goods are at a
massive disadvantage against imported cheaper products.
For
Nigeria, therefore, there are overwhelming impediments. Unravelling them
demands a strong political will to retune development programmes and a genuine
understanding of economics: the only way to attain qualitative BOP is to export
more than it imports. Essentially, exports success should not be driven by oil
but by other products.
This
is why, for decades, China concentrated and built up its export market. Today,
it is the largest exporter in the world, making $2.3 trillion in 2017, the
World Bank noted. To go with it, it had a BOP of $421 billion in the same year,
the global BOP leader. Likewise, Germany, which had the second highest BOP in
the world in 2017 at $281 billion, was the third highest exporter-nation, as it
recorded $1.05 trillion in exports. Russia and South Korea – the four leading
economies per BOP – can flex their economic muscles globally.
To
improve on the modest surplus, Nigeria has to return to the basics and ensure
that reforms are implemented in a disciplined manner. Our focus should be on
export of products that are in high demand worldwide. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html A coherent and integrated
approach that addresses challenges related to productive education, rural
infrastructure, land access and tenure, access to financial services and access
to markets should be adopted in putting agriculture at the centre-stage of our
export drive. The most difficult ingredient in all of this is how to accumulate
collective productive knowledge to develop our productive capacity in
agriculture. President Muhammadu Buhari should assemble a crack economic
management team for his second term.
First,
the power sector privatisation has to be reviewed to deliver efficient
electricity to the real sector. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html Without that, both
agricultural and manufacturing exports will be imperilled by the high cost of
goods. Government should plug leakages in public finance, including the
loss-making refineries, and redirect funds to road and railway infrastructure.
In this, the seaports have a major role: the associated infrastructure should
be reconstructed immediately, the public agencies there streamlined to aid a
quick turnaround and technology upgraded to reduce the choking delays. (Punch)
Are you an exporter? Do you like
to master the contemporary dynamics of non-oil export trade and avoid getting
defrauded by the foreign buyers of your exportable products? Click on the link
below:
Have you ever imagines how the
financial status of your company will grow when more than 20,000 CEOs and top
managers of multinational companies pay for your products and services? For
more information, click on the link below:
http://www.tectono-business.com/2015/07/tectono-business-review-in-conjunction_21.html
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