Non-oil export development and promotion as a vital strategy for increasing foreign exchange earning in an economy
| Author | Mustapha Abiodun Okunnu, Lagos State Polythenic, Ikorodu, Lagos, Nigeria Senior Lecturer,Lagos State Polythenic, Ikorodu,P.M.B 21606 Ikeja-Lagos, Nigeria Oludare Tolulope Adeyemi, Dimension Consult Limited, Lagos, Nigeria |
| Pages | 273-282 |
Page 273
Recent developments in the Nigerian economy had led to the recognition of the ultimate significance of development and marketing of quality agricultural produce as a means of enhancing the foreign exchange earning capacity of Nigeria. Simultaneous with this awareness is the growing concern of adherence to standard in order to maintain a reputation in the export market. It is therefore imperative that quality and standards are necessary conditions that must be given adequate attention in order to ensure the sustenance of Nigeria's competitiveness in the global market.
Nigeria is very popular in the area of production and export of top quality produce like Cocoa, Groundnut, Cotton, Gum Arabic, Sesame seed, Rubber, Ginger, mangoes, pineapples, coffee and host of others. Export markets for these products exist in USA, European Union, Gulf States, Japan, Singapore, China etc. Nigeria also has an added advantage over major Agricultural producers and exporters in the Eastern and Southern Africa in terms of fertile land, proximity to traditional and terminal markets in Europe by Air or by sea. The advantages are numerous but the question has been whether Nigeria has succeeded over the years to translate this comparative advantages into gains. This brings us into the problem of "Quality" and "Standards". While Quality deals with the inherent nature of the product, standards reflects the "in use" requirements imposed by the local environment which may require modifications of the product. (Sasore, 2004)
Page 274
A prominent feature of Nigeria's external sector has remained basically the same since 1960. The sector is characterized the dominance of a single export commodity. In the decades of the 1960's and 1970s the Nigerian economy was dominated by agricultural commodity exports. Such commodities included cocoa, groundnut, cotton and palm produce. From the mid-1970s crude oil is of the light and sweet type and is highly sought after in the international oil market.
The export of crude oil now constitutes about 90% of total exports. The performance of the non-oil export sector in the past two decades leaves title on nothing to be desired. The policy concern over the years has therefore been to expand non-oil export in a bid to diversify the nations export base. The diversification of the Nigerian economy is necessary for important reasons. Firstly, the volatility of the international oil market with the attendant volatility of government revenue gives credence to any argument for diversification of exports. Secondly, the fact that crude oil is an exhaustible asset makes it unreliable for sustainable development of the Nigerian economy. This paper attempts to study the performance of non-oil exports on economic growth and proper solution to the over reliance on revenue from oil export.
The objective of this study is to examine the economic effect of overreliance on Oil export and also try to find role played by authorities to encourage the participation of non oil export both by the private and public sectors.
In this paper, our task is to examine the economic effect of overreliance on Oil export and also try to find role played by authorities to encourage the participation of non oil export both by the private and public sectors. In doing so, the authors made use of regression analysis to measure the efffect of non oil export on the nation's Gross Domestic Product
The development of the export sector has been shown to be critical to the growth of a developing nation like Nigeria's Leonidon and katsikeas (1996) postulate that export expansion improves economic development but requires incentives in the area of finance in developing nations. Zinkota (1994) states that export performance is important because it allows for accumulation of foreign exchange reserves, increased, employment level, Squire and waters (1990) and Terpstra and Sarathy (2000) concluded that export growth increases the corporate profit, strengthens competitive edge, and resource. According to Ajakaiye (1987) in examining the structure and growth of non-oil export since the late 1980s, it is pertinent to compare the situation with those that prevailed prior to the commencement of Structural Adjustment Programme (SAP). Oyedeji, (1986) prior to the mid 1980s, policies about agriculture prices were specially rigid, often amounting to revaluation of the naira led to the discouragement of the agricultural export. In the same vain, pegging of interest rate were mostly beneficial to the "big" borrower farmers, Ojo (1989). The domestic prices paid to export crop producers relative to the external prices reared by the erstwhile commodity boards were low, virtually amounting to implicit taxation or negative projection of farmers, Abalu (1975).
Page 275
However, a number of empirical studies which have investigated the...
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