Nigeria’s $4bn target earnings from cashew

Media report last week, quoting the African Cashew Alliance (ACA) and the federal government, to the effect that Nigeria’s annual earnings from the production and sale of cashew increased to about $450 million or N192.64 billion with a $4 billion target annually is quite cheery.

The development portends good tidings as Nigeria accelerates its drive towards the diversification of its economy from oil export dependency to non-oil export such as agriculture and solid mineral.

The government and ACA spoke at a press conference on the just concluded 16th ACA Annual Cashew Conference and Expo in Abuja, an event that attracted delegates from across the globe. Also, the federal government announced plans to develop 22,910 metric tonnes cashew processing plants, with the target of creating one million jobs through the value chain.

The President, Board of Directors of ACA, Babatola Faseru, said the $450 million Nigeria earns annually from cashew production is too small compared to Vietnam, which earns $3.5 billion annually. He noted that the gap is brought about by the value addition to their production.

“Vietnam produces about 350,000 metric tonnes a year. Nigeria produces about 270,000mt, but we don’t process enough cashews to increase our earnings. This conference is to look at this issue, among other concerns, in the value chain. We want to industrialise the sector from which we earn $450 million, while our target is to generate about $4 billion from this commodity in the next few years.”

The Minister of Industry, Trade and Investment, Niyi Adebayo, said Nigeria currently has 15 active cashew processing plants with an estimated capacity of 55,750mt and eight inactive plants with an estimated capacity of 8,500mt.

Adebayo, who was represented by the Permanent Secretary, FMITI, Evelyn Ngigi, said, “New investments are being planned for the development of six new plants with an estimated capacity of 22,910mt.”

It is instructive that Nigeria’s non-oil exports have fallen by 39 per cent from N6.914 trillion to N4.194 trillion in 10 years, according to a media analysis of the National Bureau of Statistics’ Foreign Trade Statistics.

Specifically, figures show that the N4.194 trillion non-oil exports recorded in 2021 is 39 .34 per cent lower than the N6.914 trillion non-oil exports recorded in 2012. In 2012, Nigeria’s total exports amounted to N22.446 trillion. Out of this, N15.531 trillion was crude oil export while N6.914 trillion was non-oil exports. The non-oil exports comprised 30.8 per cent of the total exports that year.

However, in 2021 the nation’s total exports were estimated at N19.057 trillion, with the non-oil segment occupying N4.194 trillion. The non-oil exports comprised 22.07 per cent of the total exports last year.

The analysis of the National Bureau of Statistics’ Foreign Trade Statistics between 2012 and 2021 last week showed the levels of growth of the non-oil exports and the shares of its contribution to the nation’s total exports over the period.

The data revealed that the non-oil exports’ share of total exports was highest at 30.8 per cent in 2012 and lowest at 11.86 per cent in 2015. Manufacturers have said the decline in the non-oil sector is an indication that critical issues in the industry are yet to be resolved.

Non-oil exports are defined as the export of products and commodities that are neither crude oil nor minerals. They involve the export of agricultural commodities such as cocoa and cashew nuts; the export of finished products such as aluminium and plastics; and the export of capital goods such as machines and their parts.

The share of oil or non-oil export to total exports indicates how much Nigeria depends on crude oil or non-oil products for its foreign exchange earnings. In 2021, the fortunes of the non-oil export sector brightened. Total exports were estimated at N19.057 trillion, with the non-oil segment occupying N4.194 trilion, representing 22.07 per cent.

Nigeria’s non-oil export earnings are insignificant when compared with other emerging economies. In dollar terms, the total value of Nigeria’s non-oil exports in 2021 was $10.083 billion. This was realised from more than 20 items exported to various countries in 2021.

But Bangladesh, a country once touted as poor, exported knit and woven garments alone estimated at $30 billion in the first seven months of 2021, according to the country’s Export Promotion Bureau.

India exported textiles and apparel worth $29.8 billion between April and December 2021, according to the Ministry of Textiles in the country. Vietnam, another emerging market, earned $57.54 billion from export of phones and accessories in 2021, said the General Department of Vietnam Customs in the country.

It is on the backdrop of the volatility of the international market that Blueprint views the federal government’s target of $4 billion earnings annually from cashew exports as laudable.

We, however, advise the federal government to put in place mechanisms that will make Nigerian exporters more productive and competitive. These include favourable policies, adequate power supply, credit facilities, among other incentives.

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