Persistent economic uncertainty, rising costs of goods and services, high interest rates, and multiple policy restrictions have made a significant dent in the nation’s non-oil exporters’ performance, analysts have warned.
They said that Nigeria’s trade statistics reveals that not only does the country import too little as evidenced by its low import-to-GDP ratio in comparison to peer countries, it also exports a pittance, which leaves it with too little foreign exchange to comfortably afford imports.
According to NBS, Nigeria’s total exports in Q1 2025 were valued at N20,598,48 billion, reflecting a 7.42% rise compared to N19,176.19 billion in the corresponding quarter of 2024 and a 2.92% increase compared to N20,014.33 billion in Q4, 2024. Nigeria’s total merchandise trade stood at N36,604.83 billion in Q4, 2024.
Records also showed that the Central Bank of Nigeria (CBN) reported a current account surplus of $3.73 billion for the first quarter of 2025, citing growth in non-oil and gas exports as key drivers.
The figure reflects a 1.08 percent increase from the $3.69 billion recorded in the corresponding period of 2024.
Muda Yusuf, the Director General of Centre for Promotion of Private Enterprise, told Daily Independent that for the non-oil exports to thrive in Nigeria, the country must work to create a competitive environment for exports.
He described the current pattern of exporting raw goods and importing processed products at higher prices as unsustainable and economically unwise.
Yusuf, who argued that slow foreign exchange inflows are confronting exporters and crippling the non-oil export sector, insisted that government policies that would create enabling environment for businesses to thrive are urgently needed.
“These policies entail lowering the cost of production, streamlining the logistics, raising the quality of product, and moving up from the primary to value added products, as well as improving their competitiveness and make the sector stable”, he said.
Felix Oladunjoye, Chairman of the Cocoa Processors Association of Nigeria (COPAN), told Daily Independent that barriers like rising inflation, naira depreciation, and high borrowing rates are hindering export growth.
“Exporters now have to meet five times the working capital they used to as the costs of exporting have multiplied and borrowing costs are now around 35 percent”, he said.
He added: “The Federal Government needs to tackle issues arising from policy restrictions on foreign exchange repatriation and delayed issuing of export grants.
“Improving competitiveness, logistics and access to export proceeds is urgently needed”.
Dr. Victor Iyama, Chairman, Federation of Agricultural Commodities Association of Nigeria (FACAN), in a chat with Daily Independent, said price volatility in commodities such as cocoa is discouraging exporters.
He emphasised that restrictions placed on how exporters should use their foreign exchange proceeds is another reason that is further complicating the matter.
Mr. Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), said that a challenging environment, rising costs and high interest rates are hindering production of exporters in the country.
Ajayi-Kadir, who underscored global manufacturing struggles due to economic variables, said: “Rising costs of goods and services, high interest rates, and multiple policy restrictions have made a significant dent in exporters’ performance, especially in the first half of 2025
“High bank interest rates that surpass 30 percent to be precise have pushed it to the point where businesses cannot secure enough the funds to keep or expand production.
“This has eaten into their profits and left exporters in the profession struggling to compete in the international market”.
An executive director of a new generation commercial bank, who craves anonymity, identified the urgent need for compliance with international standards, increased public awareness and proper implementation of the African Continental Free Trade Agreement (AfCFTA) to correct the trade imbalance and improve market access across African borders.
The financial expert urged the Federal Government to refocus its trade priorities to address these long-standing challenges.
He explained that the frequent rejection of Nigerian exports was not necessarily due to the quality of the goods, but rather the failure to meet documentation and certification requirements expected by international markets.
He added: “Exporters, particularly small and medium-sized enterprises (SMEs), often lack the necessary education and support to comply with bank requirements, which leads to financial loss and lost trade opportunities.
“Without adequate preparation and awareness, exporters, especially SMEs, risk wasting capital and missing global trade opportunities.”
To stem the tide of rejection, the financial expert called on the Nigerian Export Promotion Council (NEPC) to intensify its interventions to boost export readiness. These include guidance on proper packaging, facilitation of relevant certifications, provision of financial grants and the distribution of seedlings to exporters in the agro sector.
He said: “More systemic challenges like flooding, port congestion, have complicated the difficulties and weakened growth in non-oil exports (NOEs).”
SOURCE: independent.ng
