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Non-oil export earnings increase to $426.46m in February

By BusinessNews Staff on May 12, 2014

The 12.5 per cent leap in the total value of non-oil export recorded in the month of February may have raised the prospect of bumper revenue earnings and foreign exchange accumulation by the Federal Government this year.

This is because provisional data released by the Central Bank of Nigeria to cover the nation’s economic performance for the month of February this year has indicated that total non-oil export, which was put at $426.46 million, represents a 12.5 per cent increase above the level in the preceding month.

The development is said to have reflected largely, the 32.2 and 5.6 per cent increase in manufacturing and industrial sectors, respectively.
A breakdown by sectors showed that proceeds of manufactured, industrial, agriculture, minerals and food products sub-sectors stood at $246.12m , $121.82m, $33.79m, $17.32m and $ 7.5m respectively.

The report said the transport sector recorded no receipts during the review month but explained that the shares of manufactured, industrial, agriculture, minerals and food products sub-sectors in non-oil export proceeds were 57.7, 28.6, 7.9, 4.1, and 1.7 per cent, respectively.

Financial analysts therefore said that should the tempo of increase in the value of non-oil exports be sustained till the end of the year, Nigeria would not only witness a systematic reduction in demand for foreign exchange at the various segments of the market, but also record higher yields from non-oil export activities which will assist in the accretion of foreign exchange.
In Nigeria, non-oil exports include: cocoa, cashew, fried snail, gari, gallstones, ginger, dried vegetable, cassava chips/leaves/roots, bones, sesame seeds, pepper, honey, charcoal, spices, various manufactured or processed products and intermediate goods.

The 2013 non-oil exports data obtained from the Nigerian Export Promotion Council (NEPC) showed that the total earnings by end of 2013 were $2.97 billion.
Of the total non-oil exports within the year, earnings from cocoa and its preparations amounted to $758.64 million. This implies that the agricultural commodity made up 26 per cent of the total non-oil exports within the year, which is over one-quarter of the total.

NEPC data revealed that this was followed by sheep, goat skin and leather, sesame seeds, aluminum, rubber, tobacco products, cotton yarn and woven fabrics. Also on the list were copper, cashew nuts, edible nuts, prawns, shrimps, fish and crustaceans.

The CBN document, which also highlighted sectoral utilisation of foreign exchange for the month of February, said the invisible sector accounted for the bulk (56.8per cent) of total foreign exchange disbursed in February 2014.

“Of the visible sector, minerals and oil sector accounted for 13.5 per cent. Other beneficiary sectors, in a descending order included: industrial sector (11.2 per cent), food products (8.1 per cent), manufactured product (6.8 per cent), transport (3.2 per cent) and agricultural products,” the report stated.

Still on foreign exchange utilisation, the report noted that estimated aggregate demand for foreign exchange by authorised dealers under the retail Dutch Auction System (rDAS), Bureau-de-change (BDC) and rDAS-Forward contract was $4.64 billion in February 2014. This indicated a decrease of 32.0 per cent below the level in the preceding month, but showed an increase of 217.3 per cent above the level in the corresponding month of 2013.

According to the report, “A total of $6.25 billion was sold by the CBN to authorised dealers during the period, reflecting an increase of 54.9 and 355.84 per cent above the levels in the preceding month and the corresponding period of 2013, respectively.

“Under the DAS, the average exchange rate of the naira vis-à-vis the US dollar, decreased by 0.01 per cent to N157.31 per US dollar, compared with N157.29 and N157.30 in the preceding month and the corresponding period of 2013, respectively.
“At the BDC segment, the average exchange rate appreciated by 1.4 per cent above the level in the preceding month, but depreciated by 6.2 per cent to N169.28 per US dollar below the level in the corresponding period of 2013.

“The average exchange rate at the inter-bank segment depreciated by 2.0 and 3.7 per cent below the respective levels in the preceding month and the corresponding period of 2013 to N163.49 per US dollar.
Consequently, the premium between the rDAS and Bureau-de-change narrowed to 7.6 per cent from 9.2 per cent in the preceding month, while the premium between the inter-bank and rDAS widened to 3.9 per cent.”

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