NEPC: Non-oil Exports Yielded $2.7bn at Half-year

•CBN survey reveals businesses anticipate lower inflation compared to households

•Says rising costs push Nigerians into debt amid optimism

James Emejo in Abuja and Nume Ekeghe in Lagos

Executive Director/Chief Executive, Nigerian Export Promotion Council (NEPC), Nonye Ayeni, yesterday disclosed that $2.7 billion was generated from non-oil exports in the first half of the year (H1 2024).

The disclosure came as the latest Inflation Expectations Survey (IES) by Central Bank of Nigeria (CBN) for July 2024 revealed that businesses in Nigeria were slightly less pessimistic about the current inflationary trends compared to households.

Ayeni said the performance indicated an increase of 6.26 per cent compared to the $2.5 billion recorded in H1 2023.

Total volume of exports during the review period stood at 3.834 million metric tonnes.

Addressing journalists at the presentation of the progress report on non-oil export performance for the first half-year 2024, in Abuja, Ayeni explained that 211 products were exported in H1, ranging from agricultural commodities to extractive industries.

She said the performance further showed that Nigerian products were gradually diversifying from traditional raw agriculture exports to semi-processed/manufactured products.

Ayeni attributed the increase in the value of exported products to the successful transition of government in May 2023 and the policy strides of President Bola Tinubu’s Renewed Hope Agenda.

The NEPC boss also said the strategic achievements of the council’s “Operation Double Your Exports” mantra made a positive impact on the scorecard.

She stated that through partnerships, advocacy, capacity building and export intervention programmes, the council recorded wins that reflected in the increase in the volume and value of Nigeria’s non-oil exports.

She said the council remained committed to working with critical stakeholders to stimulate export growth.

Ayeni added, “I am optimistic that with the several export intervention programmes and projects we have started and are ongoing, complemented by the NEPC flagship campaign programme, ‘Operation Double Your Exports,’ the sector is positioned to contribute immensely to the country’s Gross Domestic Product (GDP), increase the country’s foreign exchange earnings and thereby ensure sustainable economic growth, which aligns with the Renewed Hope Agenda of His Excellency, President Bola Ahmed Tinubu, for job creation, poverty alleviation, among others.”

The NEPC chief executive also said, “When I assumed office in October 2023, I and my management team resolved to reposition the non-oil export sector towards global competitiveness.

“To this end, a management retreat was held in January 2024 with the objectives to among others, re-evaluate the council’s export promotional programmes by developing new strategic plans to strengthen its operational efficiency and consolidate on previous gains.”

Ayeni pointed out that many exportable products and their derivatives were progressively gaining prominence, as their demand in the global market continued to increase.

She listed the products to include fresh vegetables, citrus peel, and sorghum, adding that while their contributions are still in the process of attaining significant levels, their regular inclusion on the export table suggest a growing presence in the export landscape.

Ayeni explained that there were a lot of potential in the services segment that needed to be explored and harnessed, particularly, logistics and ICT.

She appealed to financial institutions to take advantage of the opportunities in the non-oil export sector by supporting exporters to enhance their capacity to scale up production and access international markets, “especially now that we have the African Continental Free Trade Area (AfCFTA).”

Ayeni stated, “This support is critical to increasing the basket of exportable products and stimulating value-addition, thereby increasing Nigeria’s foreign exchange earnings.

“No doubt exporting companies can scale up production and harness the opportunities in the global market to increase the volume of exports if they have access to affordable finance.”

She added that reducing the volume of rejects on Nigerian products remained a core objective of the council.

According to her, “The council is addressing the issues by collaborating with relevant agencies and parastatals to create awareness, build capacity for good agricultural practices, labelling and packaging and ensure adherence to the quality and standards of exports in the global market.”

Meanwhile, CBN’s IES for July 2024 revealed that businesses in the country were somewhat less pessimistic about the current inflationary trends compared to households.

The survey, which gathered insights from 1,600 businesses and 1,650 households across the country, revealed that while both groups perceived inflation as high, businesses held a marginally better outlook.

The survey results showed that 83.7 per cent of respondents believed the current inflation level was high, with an overall index of -61.1 points. However, when broken down, businesses reported a slightly less negative perception with an index of -58.7 points, compared to households at -63.3 points. This difference suggested that businesses were more optimistic about the inflationary environment than households.

Large businesses, however, expressed greater concern, with an index of -70.8 points, indicating that they perceived inflation as particularly high. Despite this, businesses generally anticipated a lower inflation rate in the near future compared to households.

Another survey released yesterday, “Household Expectations Survey for July,” which measures consumers’ expectations, also revealed that the overall outlook of consumers in July 2024 was downbeat, as consumers anticipated drawing down on their savings or getting into debt.

The report stated, “The outlook for next month, two months, and six months, shows that respondents expect inflation to rise further in the review months with indices of -37.4 for the next month, -26.3 for the next two months, and -15.8 for the next six months. Generally, respondents expect the inflation rate to gradually reduce over the next six months

“A further breakdown reveals that businesses anticipate lower inflation rate compared to households, with indices of -34.4 and -11.0 points for next month and the next six months, respectively. However, for next month, households expect lower inflation with an index of – 26.1 compared to businesses that recorded an index of -26.5. Overall, both businesses and households believe that the inflation rate will rise further in the review periods.

“Over the next six months, businesses expect their inflation outlook to be primarily driven by changes in energy prices at 92.8, exchange rates at 89.8, and transportation costs at 88.6 index points.

“Households also expect their inflation outlook to be primarily driven by energy prices at 88.1, transportation costs at 85.0, and exchange rates at 82.7 index points. These factors consistently remain the top concerns influencing inflation expectations for households.”

A further breakdown by income group showed that respondents’ earning between N150,001 and N200,000 perceived inflation as too high, with an index of -66.4 points.

Those earning above N200,000 had a less negative index of -58.3 points, indicating the least pessimism regarding current inflation expectations.

Furthermore, factors such as rising energy costs, a consistently high exchange rate, and transportation expenses were identified as the main drivers of inflation. Energy costs, in particular, increased from 90.6 points in June to 91.8 points in July, making it the top contributor

The survey added, “The overall perception of inflation in July 2024 showed that 83.7 per cent of the respondents believed that the current level of inflation was high with an index of -61.1 points. A breakdown of the responses revealed that businesses at -58.7 points, has a slightly lower index compared to Households (-63.3 points). This indicates that businesses were less pessimistic in their outlook, as their current month inflation rate perception is slightly better than that of the households. A further breakdown shows that large businesses believed that the current level of inflation is too high with index of -70.8 points.

“Further breakdown by income group revealed that respondents in the N150,001- 200,000 income group believed that inflation in the current month was too high with an index of -66.4 points.

“The above 200,000 income group which stood at -58.3 index point, had a less negative index, indicating the least pessimism on inflation expectation for the current period.

“Factors that played a crucial role in shaping the perception of inflation among businesses include: Energy costs increased from 90.6 points in June to 91.8 index points in July, making it the top driver.

“Exchange rate remained consistently high with a slight increase from 88.3 in June to 88.8 in July. Transportation is the third driver of inflation during the review period with 88.5 index points.”