Experts in the financial sector have applauded the nation's soaring non-oil exports growth stressing that if sustained, it would mark a watershed for Nigeria on the road to diversification of the economy.
The Central Bank of Nigeria (CBN) had revealed in its third quarter (Q3) 2013 economic report that non-oil exports soared to $2.64 billion in the review period.
In a report made available to THISDAY, analysts at FBN Capital Limited stated the federal government's decision to invest in sectors that create jobs the most in the economy would further enhance the country's economic growth.
According to the experts, "We hesitate to welcome a sea-change since the figure cited for the quarter is not far short of the 12-month totals for 2011 ($3.21 billion) and 2012 ($3.00 billion). Seasonal factors may be the answer although the CBN’s separate External Sector Development Report for second quarter (Q2) 2013 indicates that non-oil exports are more likely to peak in the first half of the year than the second.
"The breakdown of non-oil exports by sector is consistent with recent years. Agriculture’s share of the total amounted to 52.5 per cent in 2011 and 47.1 per cent in 2012. The predominance of agriculture also emerges from the CBN’s list of leading exporting companies in its annual report. The five largest in 2012 in descending order were exporters of: sesame seeds and cocoa beans; finished leather; cotton and cocoa beans; leather; and cigarettes."
They added : "Beyond agriculture and agro-processing, we are not aware of the emergence of any sizeable non-oil exporters. Steel exports were due to start this year, and the Dangote Group’s proposed $9 billion petrochemicals city could make Nigeria a net exporter of fertiliser and petroleum products by 2016. For now, we await the Q4 2013 data and longer commentary in search of a trend."
While hailing the federal government's strict fiscal stance, they pointed out that the National Assembly would likely challenge FG's fiscal stance when the presidency finally submits its 2014 budget.
“A reduction in projected fiscal revenue in 2014 in the budget office's latest Medium Term Expenditure Framework has reduced FGN retained earnings to N3.58 trillion from N4.10 trillion in the current year’s budget (and N1.85 trillion actual in H1 2013). In order to contain the deficit, the authorities have pruned expenditure. They have targeted capital items in a bid to limit opposition in the assembly. The largest recurrent item is personnel costs.