[Nigeria Business Week] Andrea Ayemoba: Government, experts look to non-oil exports for economic recovery
The current events in the world, political and health crises we’re facing are having an impact everywhere, and Nigeria is no exception. The math is really simple – a rise in fuel prices leads to a rise in price in everything on the market because it costs more to transport it. Inflation is the inevitable result of this, and Nigeria’s inflation rose above 15% in February. Energy and cooking gas are also experiencing severe instabilities. The Federal Government has confirmed a power tariff hike and frozen electricity subsidies and industry leaders have weighed in on why the energy crisis may linger longer than expected.
International organizations have pointed out one strong limitation in Nigeria’s economic management – the failure to diversify our export portfolio. Last year non-oil exports generated just over $3bn, an arguably modest number given Nigeria’s size, resources and potential. The Federal Government is outlining measures to increase export volume, eliminate obstacles to trade and encourage investment. Also in the works is the creation of several free-trade zones across the country, a move expected to result in employment and more jobs on the market.
Given the unstable revenue coming in from the oil sector, the logical next step is to turn focus on other industries capable of adding value to GDP. Entrepreneurship and agribusiness are the favored areas with promise. West Africa’s food economy is projected to be worth near half a billion dollars in another few years and pro-entrepreneurship organizations like Google and the Tony Elumelu Foundation have recently announced new opportunities for young startups across Africa’s 54 States.
The Central and local banks continue their tussle between the naira and the dollar, a tussle borne out of scarcity of foreign exchange. Several banking institutions have now reduced and limited foreign currency spending on naira cards. In further efforts to improve cash management efficiency, the CBN created cash collection centers, setting transaction limits on businesses and individuals. 2021 figures just released show a 16% rise in total banks’ assets. All told, the banking system, one of the most advanced on the continent, maintains its soundness and resilience.
Andrea Ayemoba is a Senior Editor at Africa Business Communities.
