It is no longer news that Nigeria’s economy has relied heavily on crude oil revenues for decades, making it susceptible to global price fluctuations. However, it has also become clear that Nigeria can no longer depend on this commodity as a major foreign exchange earner. Nigeria must urgently transition to a non-oil export-driven economy to achieve sustainable economic growth and prosperity. This transition requires immediate action in the form of policy reforms, strategic initiatives, and targeted investments across different sectors.

In my last article, I illustrated the high potential for Nigeria to trade its way to economic recovery, prosperity and growth. In this writeup, we shall highlight some key policy imperatives to achieve this goal:

1. Policy Coherence and Alignment

Developing a National Export Plan is pivotal in guiding Nigeria’s transition to a sustainable, non-oil export-driven economy. This plan must clearly and comprehensively articulate a long-term vision prioritizing the manufacturing sector. This will stem the current preponderance of exporting Nigeria’s agricultural commodities in their raw form (thereby exporting jobs and reducing industrialization). Such a plan will attract investors, guide policy decisions, and coordinate efforts across stakeholders.

In recent years, severe lip service has been paid to acronyms like OLOP (One-Local-Government-One-Product) and OSOP (One-State-One-Product). A well-articulated National Strategy on Non-oil Exports will accelerate the attainment of this objective while fostering a culture of export-oriented production.

– Ensure Policy Coherence: Ensure policy coherence and alignment between national economic goals and the specific needs of the available economic sectors. This includes promoting non-oil exports and a swift transition from overreliance on crude oil. Existing policies may need to be reviewed and revised to be consistent with the goals of export diversification. At the inception of the Structural Adjustment Programme in 1986, the then military Government promulgated the Export Incentives and Miscellaneous Decree (No 46), now an Act of Parliament. Less than half of the support instruments provided in that document have been activated. It is undoubtedly time for the present administration, especially the supervising ministry (Ministry of Industry, Trade and Investment), to revisit and comprehensively review this and other policy instruments to support economic diversification through non-oil exports.

2. Improve the Business Environment

Addressing Macroeconomic Instability is crucial to creating a stable and conducive business environment. A stable macroeconomic environment, characterized by low inflation, a predictable exchange rate, and sound fiscal policies, is essential for attracting investment.

Tackle Bottlenecks and Bureaucracy: The Government should prioritize addressing key constraints on business operations, such as bureaucratic hurdles, lengthy permit processes, multiple taxes, and access to land.

Streamlining regulations, implementing a one-stop shop for business registration, and ensuring transparent land administration can enhance the ease of doing business and attract investors. Nigeria seems to have recognized the need to implement and sustain reforms that improve business efficiency, simplify regulatory procedures, and establish transparent systems by setting up the Presidential Enabling Business Environment Council, PEBEC. Under the spirited leadership of the now Minister of Industry Trade and Investment, Dr Jumoke Oduwole, PEBEC addressed many of the bottlenecks suffocating Nigeria’s business environment, including non-oil exports. The investing public is eagerly expectant that the Minister is now even better placed to implement some of those policies.

Address Infrastructure Deficits: Inadequate infrastructure, especially in transportation, power, and logistics, significantly increases the cost of doing business in Nigeria. Improving roads, rail networks, and port facilities and ensuring a reliable power supply are crucial to making Nigerian exports competitive in the global market. Indeed, most Nigerian manufacturers believe that if the Government could solve the power problem, manufacturing costs would be reduced by as much as 40%!

– Establish Export Clusters: Clustering exporters along product segments can significantly address the current quality problems (leading to the recurrent rejection of Nigerian products abroad). It will also speedily guarantee higher volumes and a stronger ability to meet enormous market demands. These initiatives can attract foreign investment, promote value addition, and create specialized manufacturing hubs for export-oriented industries.