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Bank chief seeks value-added commodity exports to boost Nigeria’s revenue

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The Managing Director of the Fidelity Bank, Nneka Onyeali-Ikpe has urged Nigerian commodities exporters to switch to the export of value-added processed commodity items to earn more foreign exchange and improve Nigeria’s balance of trade.

Onyeali-Ikpe, who spoke weekend at the yearly Finance Correspondent Association of Nigeria (FICAN) workshop in Lagos said transitioning to value-added exports would provide immediate revenue uplift even without expansion of the primary commodity supply side.

She said a step forward was to move from cocoa beans to cocoa butter or powder and also move from raw cashew nuts to kernels, to triple the foreign exchange revenues Nigeria earns from these commodities.

“Most of our raw cashew nut exports go to Vietnam where more value is added to it and then re-exported. In 2020, Vietnam imported $1.5 billion worth of raw cashew nuts from Africa, added value to them and exported $3 billion worth of processed kernels.

“The uplift of $1.5 billion represents jobs and tax revenue opportunities that we could have created if this value addition was done in Africa,” the Fidelity Bank chief said.

Onyeali-Ikpe, who was represented by a Divisional Head in Fidelity Bank, Isaiah Ndukwe at the workshop stated that: “At three times increase in revenue, Nigeria can move cocoa exports to $3 billion per annum (currently about $1 billion) and cashew to $600 million (currently about $200 million) in the short term to medium term.

“If we then double the capacity of our plantations as well as processing capacity, we can exponentially move the numbers.

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“This is not a reinvention of the wheel; it is a tried and tested lever for sustainable economic development. This is the same model that was used by the Association of South-East Asian Nations (ASEAN) i.e. Malaysia, Indonesia, Thailand and Vietnam to transform their economies into global manufacturing powerhouses.”

Also speaking at the workshop, the Director General of the Securities and Exchange Commission (SEC), Lamido A. Yuguda, noted the Nigerian capital market had a significant role to play in contributing to the country’s sustainable foreign exchange earnings by attracting more foreign portfolio and direct investments.

Yuguda said the 10-year Nigerian Capital Market Master Plan (2015-2025) was built around four strategic themes, one of which is to “promote competitiveness by establishing practices that improve transparency, efficiency and liquidity and to attract sustainable interest in the capital market from domestic, as well as foreign investors and participants.”

He regretted that over the past fifteen years, foreign transactions in the Nigerian exchange decreased by 29.38 per cent from N616 billion to N435 billion. In 2021, total domestic transactions accounted for about 77 per cent of the total transactions carried out in 2021, whilst foreign transactions accounted for about 23 per cent of the total transactions in the same period.

“These are not the kinds of statistics we want, but they have been brought about by sustained forex illiquidity concerns which have resulted in many foreign investors pulling out of the Nigerian market, leading to the decline in foreign participation in the equity market.

“But we believe that implementation of the roadmap for vibrant commodities trading ecosystem in Nigeria by the commission will support the development of the agricultural sector and diversification of the Nigerian economy and ultimately, advance the country towards attaining sustainable foreign exchange earnings.”

The Chairman of FICAN, Titus Nwokoji, in his welcome remarks called on the government to provide incentives to the non-oil exports sector, which “holds a lot of potential for significant growth provided there is a lot more attention from policymakers in terms of enabling reforms and regulations to support value-addition activities and generate employment.

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