By the second quarter of 2020, the sector experienced a decrease in the total value of non-oil export by 45.64 per cent
Aftermath of Federal Government’s refusal to re-open the country’s borders, Nigerian exporters, under the umbrella of the Manufacturers Association of Nigeria Export Promotion Group (MANEG), have said its harsh decision is still affecting the country’s export sector with sharp decline in value of non-oil export.
MANEG’s Chairman, Chief Ede Dafinone, a Chartered Accountant, in a chat with New Telegraph, explained that the country’s manufacturing export sector had been witnessing decline as a result of border closure, which trajectory is harshly impacting on the sector’s revenue one year after.
He said that the decline was reflected in National Bureau of Statistics (NBS)’s Q3, 2020 report. Dafinone noted that in the second quarter of 2020, the country’s export sector experienced a decrease in total value by 45.64 per cent.
Speaking further, the MANEG chairman said that the last one year had been very challenging and tough for export firms operating in the country’s manufacturing sector, with some of them closing their operations in the process.
Dafinone said: “Over the last one year, as a result of the border closure, it maybe only one or two that have had to close down operations, reasons being that those companies had only cross border export as their sole business while the rest are exporting a percentage of their products.
“Export through land borders has been totally stopped, but the sea route is still available, but this option is largely more expensive than the land borders.”
While reacting to the NBS’ report trade, the renowned chartered accountant said: “The export sector witnessed a decline as a result of border closure, which harshly impacted on the sector’s output.
“According to the National Bureau of Statistics, the value of manufactured goods trade in Q4’19 stood at N4.4 trillion, accounting for 43.69 per cent of total trade while the export component accounted for N509.2 billion. “The sector witnessed 48.9 per cent decrease in value during the fourth quarter (Q4,2019) in 2019 lower than what was recorded in Q3,2019 and 573.19 per cent higher than Q4,2018.
“By the second quarter in 2020, the sector experienced a decrease in the total value of the non-oil export by 45.64 per cent.” He, however, stated that the group had been engaging with the Federal Ministry of Industry, Trade and Investment on reopening of the borders that has been closed since last year.
“The border closure as you all know has really affected the export trade volume between Nigeria and most neighboring West African countries. “It is, however, unfortunate that the decision of the Federal Government to close the borders has negatively affected genuine exporters, especially those that ply the Seme-border corridor.
“We continue to engage the Federal Gvernment on this issue and trust that the border would be opened in the near future as many of our member’s export prosperity depends on it,” he concluded. Trade is Nigeria’s second biggest sector by percentage contribution to output.
The sector has been in recession since Q3’19, majorly due to the land border closure, port inefficiencies and weak consumer spending among other structural challenges.
These challenges coupled with the global pandemic amplified the magnitude of contraction to 16.59 per cent in Q2’20, compared with 2.82 per cent decline reported in Q1’20.