Technology sector driving non-oil export agenda
By Sharon O. Isaalah
Nigeria is regarded as Africa’s largest ICT market with 82% of the continent’s telecoms subscribers and 29% of internet usage. Sub-Saharan Africa is also projected to be the fastest growing region with a compound annual growth rate of 4.6% and an additional subscriber enrollment of over 167 million in the next five years. Nigeria is expected to account for over 55% of this. The NCC estimates that the country has about 76 million subscriptions on broadband (penetration of 40%) and 187 million lines in the voice segment as of May 2021, representing 97.9% teledensity.
The government of Nigeria recognizes ICT as the enabler for developing other critical sectors including education, healthcare, agriculture, and manufacturing. In its drive to diversify the economy from oil and gas, the GON is encouraging partnerships between local ICT companies and foreign investors. To promote these partnerships and grow an entrepreneurial ecosystem in the technology sector, GON has supported creating government- or private-sector led incubator hubs, youth innovation programs, and science technology parks.
Abuja Technology Village, which serves as an example, received government support to become a destination for research, incubation, development, and commercialization of ICT. Construction has begun at the site, and the government has granted Special Economic Zone status to Abuja Technology Village and other hubs to enable duty-free shipments and elimination of labor issues as a fiscal incentive to investors and entrepreneurs.
Speaking at a 2-day National Conference on Non-oil Export with the theme, ‘Export for Survival: Optimising Nigeria’s Non-oil Export Potential’, organised by the Nigerian Export Promotion Council (NEPC), Nigeria’s Vice President, Professor Yemi Osinbajo said “some of the country’s best stories are in the tech sector, with companies valued over $1billion each and all of these between two recessions.”
He said the tech sector is growing so well because there is a very large hand of the regulator upon it and added that “the country must seek to achieve a situation where regulators see themselves as facilitators of business.”
“This has been the focus of the ministry of Industry Trade and Investment especially with the MSME clinics where we try to show that the very best approach is for regulators to see themselves as those that must promote business,” the Vice President said.
Osinbajo said the government’s job is to assiduously enable businesses especially with the regulatory policies with its procedures and processes.
“The core mandate of the Presidential enabling business environment council found expression in the master action plan of 7.0 on the ease of doing business and in the way to consolidate and removal of regulatory constraints especially around agro-export and to drive the electronic filing of taxes and publication of insolvency regulation of companies and Allied matters Act 2020. The 7.O.agro export plan prioritizes trade facilitation reforms to minimize cross border trade and transport logistics and for Nigerian companies to do better and to be more compliant with the AFCTA export compliance regulations,” he said.
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“The plan for reduction of cargo clearance time has also begun with the facilitation of imports and exports with the introduction of installation of scanners supported also by the port community portal. One of the major problems and complaints that we have is that there is always physical inspection of goods as they come, but with the scanners we hope physical inspection will be greatly reduced.
“We have continued to meet the challenges facing us head-on and there are so many challenges, the government’s commitment to infracstural development and also looking for ways of funding the exports in trade and investment is one commitment that the government has taken very seriously,” he said.
The Executive Director of the Nigerian Export Promotion Council, Dr. Ezra Yakusak, observed that report from Pre-shipment Inspection Agencies (PIA) revealed a significant growth in export proceeds in the last 5 years 2017-2021 from $1.2 billion to $3.4 billion as against an annual average of $22 billion food importation alone into the country. “To close this gap, concerted efforts are required from all practitioners in the non-oil export value chain,” he said.
He explained that the theme of the Conference, “Export for Survival: Optimizing Nigeria’s Non-Oil Export Potentials” was carefully couched to reflect Council’s approach in repositioning non -oil export for increased foreign exchange earnings.
“The “#Export4Survival” campaign which was launched by the Council on 19th February, 2022, is a clarion call to action. It is a deliberate effort to stimulate national consciousness to current realities in the non-oil export ecosystem. It is also a wakeup call for massive investment and a campaign to leverage our vast potentials and increased opportunities in the sector. This is a sure way to sustainable economic growth and prosperity. We at the NEPC believe firmly that our survival as a nation depends on non-oil exports. We have therefore scaled up efforts to mobilize citizens to engage meaningfully in the sector which is the nation’s next line of defence,” the NEPC boss said.
He added that the NEPC has evolved cutting edge-projects and initiatives to promote and develop the non-oil export economy. Part of Council’s efforts in this regard is the Zero Oil Plan, which was designed at the heels of the economic recession to make the country less dependent on oil.
“Similarly, the Domestic Export Warehouse (DEW) initiative is a one-stop facility aimed at assisting exporters conduct their pre-export operations to ease logistical constraints.
“Of recent, the NEPC launched an Export Trade House in Egypt. In a few weeks, another Trade House will be launched in Lome, Togo. The rationale behind establishing these Trade Houses is to enhance the visibility of made in Nigeria products and increase Nigeria’s market share in the host country as well as other neighbouring countries. This is part of NEPC’s strategic efforts at positioning Nigeria’s products in anticipation of the full implementation of the African Continental Free Trade Area,” he said.
Also speaking on the theme “Sustainable Market Access for Nigerian Non-oil Export,” Ambassador Adamu Mohammed Abdulhamid, Nigeria’s Ambassador to the World Trade Organisation (WTO) said the negative impact on Nigeria’s external reserve has exerted unprecedented pressure on Naira and weakened Nigeria’s ability to finance its import and undermine its Balance of Payment position.
He cited increased poverty and livelihood security difficulties and unemployment as part of the aftermath of these negative indices.
In order to build a resilient economy, Economic Diversification and digitization especially export diversification is key.
“Nigeria needs to focus on ways of ensuring the growth and development of various components that make up the non-oil sectors with a view to boost non-oil export- agriculture, mining, service, MSMEs and manufacturing and focus on addressing constraints that continues to undermine productivity and the competitiveness of our non-oil sector,” he said.
Earlier in her opening address, the Minister of State for Industry, Trade and Investment, Ambassador Mariam Katagum said the Federal Government has been addressing some of the problems plaguing the non-oil export sector from achieving its potential.
“First is the N75bn MSME Survival Fund and the Guaranteed Off-take Schemes, which are both within the framework of the NESP approved by President Muhammadu Buhari, GCFR on 1st July, 2020. The main objective of the MSME Survival Fund is to sustain the livelihood of vulnerable MSMEs and self-employed individuals mostly affected by COVID-19 pandemic. Since inception, the Fund has impacted about 1.2 million beneficiaries across the five tracks of the Fund.
“In order to cushion the effects of the hardship, ensure sustainable production and minimize job losses, the Federal Government in 2021 approved a N50 billion Export Expansion Facility Programme (EEFP) as part of efforts to boost Non-Oil Exports and thereby increase the country’s foreign exchange earnings,” the minister said.
Nigeria is well documented to be a major exporter of natural resources especially crude oil but its impact on economic growth have been underwhelming. Perhaps, it’s time to look at the alternatives.
Nigeria needs to build strong and resilient institutions to provide a platform for driving innovative policies geared towards diversifying the economy, building capacity and a conducive environment for business growth, while considering the impact on marginalized groups. Export promotion strategies should identify priority sectors based on potential to create jobs, boost export earnings, and have robust market linkages. Policies on port reforms, simplification of export procedures, stable exchange rate, and indigenous technology advancement should be implemented.
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