Agric exports lead silent shift in Nigeria’s economy

Nigeria’s economy is undergoing a significant transformation as it moves away from its reliance on oil towards a diversified export base. According to recent data from the Nigerian Export Promotion Council (NEPC), non-oil exports grew by 6.26%, reaching $2.7 billion in the first half of 2024. This marks a key turning point as sectors such as agriculture, solid minerals, and manufacturing drive this shift, emphasizing the country’s strategy to reduce dependence on oil.

Agriculture is leading the diversification effort, with exports rising by 123% in the first quarter of 2024. Products like sesamum seeds and cocoa beans are in high demand in Asia and Europe. Similarly, Nigeria’s solid minerals sector is gaining momentum, with trade reaching ₦134.79 billion in Q1 2024, driven by tin ores and cement clinkers. The manufacturing sector is also showing growth, exporting goods such as aluminum alloys and refined lead to international markets.

However, Nigeria faces challenges in sustaining this growth. Inadequate infrastructure, post-harvest losses, and limited access to financing hinder productivity and export efficiency. Despite these obstacles, the potential for diversification remains strong, with sectors like agriculture and solid minerals offering significant opportunities for growth.
Source: BusinessDay

Expert Review for Agri-Food Stakeholders:
For stakeholders in Nigeria’s agribusiness sector, the country’s shift towards non-oil exports represents an opportunity to expand the agricultural value chain. Agriculture continues to lead the diversification efforts, supported by the growing demand for Nigerian produce like cocoa beans and sesamum seeds. Exporters can benefit from tapping into international markets, particularly in Asia and Europe, where demand is high.

However, the sector’s success depends on addressing critical challenges like post-harvest losses, which exceed 50% and cost the economy trillions of naira annually. Stakeholders should advocate for improved infrastructure, better storage facilities, and investment in mechanization to minimize these losses and enhance productivity.

Similarly, the solid minerals and manufacturing sectors offer untapped potential. With 44 commercially viable minerals, Nigeria can replicate the success of countries like Chile by boosting investment and combating illegal mining. The African Continental Free Trade Agreement (AfCFTA) also presents a platform for Nigerian manufacturers to access new markets across Africa, but stakeholders must focus on overcoming bottlenecks such as power supply and financing limitations to remain competitive.

Overall, Nigeria’s diversification efforts are promising, but sustained investment in infrastructure, regulatory reforms, and improved security is crucial to fully unlocking the potential of its non-oil sectors.