[Nigeria Business Week] Andrea Ayemoba: A call for exports diversification for higher market gains
The Covid-19 pandemic seems to have affected Nigeria, and indeed Africa, much less than it did the rest of the world. This is assumed to be the case given the sickness and death toll which is far below what is easily seen in other continents. However, the ripple effect is evident in the economic performance and especially in foreign investment pouring into Nigeria. Last year produced the lowest FDI on record, according to data provided by the Central Bank. Another by-product is the decrease in travel – worldwide travel bans and requirements have grounded the population of Nigeria, causing a direct impact on the Travel and Tourism industry. Notwithstanding, other sectors have bloomed in the face of this challenge.
Banks, for example. Zenith recorded double digit growth earnings in 2021, Standard Chartered has expanded its digital operations and on the whole, Nigeria’s banking sector contributes trillions of naira to the national GDP on a yearly basis. The African Development Bank, in the year 2021, poured over $500m in loans to finance several projects in Nigeria.
Manufacturing and construction has also thrived, with the Dangote Group sitting at the head of this industry. The Cement arm of the conglomerate recorded a substantial increase in profit-before-tax earnings in 2021.
These positives do not altogether compensate for elements that remain a challenge for everyone, number one of which is inflation. Whatever the statistics indicate, undeniably prices have risen in everyday commodities like food and energy. Agriculturists and entrepreneurs are working harder than ever to address food sufficiency, but the latter rests firmly on the government’s shoulders. The national body responsible for petrol (NNPC) has entered a multi-party deal to ensure gas supply and the federal government has approved millions of dollars toward the availability of cooking gas (LPG). To a similar end, Nigeria has also signed a memorandum of understanding with Equatorial Guinea, though this agreement is to facilitate the neighbor country with gas.
While exports in general are a welcome transaction for economic prosperity, Nigeria needs to do more in diversifying its export portfolio; with such wealth in resources and fertile lands, there is much more to offer the world than just gas.