Comfort Yakubu
Diversification of the economy means creating more than one source of foreign earnings for a nation’s economy, experts say it is necessary because it promotes the economic growth of a nation and boosts its sources of revenue.The Master Bakers Association, the manufacturers of bread, increased the price of bread because Nigeria relies on importation of wheat. Nigeria had solely relied on Ukraine and Russia for imports, but with the two countries that had the world’s cheapest wheat at war, Nigeria had to look elsewhere, namely, America and Canada, whose wheat is expensive.If Nigeria had been able to produce its own wheat in commercial quantities, it would have supplied its domestic markets and exported to the world. Ezra Yakusak’s book; Export Promotion in Nigeria. Law, Policy, and Practice is reviewed
Diversification, a strategy aimed at creating multiple revenue streams within an economy, is vital to ensure economic stability and sustainable growth. A nation’s reliance on a single source of income can expose it to volatility in global markets.The focus of this book is on the significance of diversification for Nigeria, particularly exploring the evolution of its economic landscape, the challenges of a monoculture economy, and the various strategies employed for export promotion.
**Nigeria’s Economic Evolution: **
The author explained that Historically, Nigeria’s economy thrived on a vibrant agricultural sector. Exports of commodities like cocoa, cotton, palm oil, palm kernel, groundnut, and rubber constituted the backbone of its economy. However, the oil boom in the 1970s led to a paradigm shift, making crude oil the central focus of economic activities. This transformation marginalized the agricultural sector, ultimately resulting in an economic vulnerability stemming from over-reliance on oil.
**Monoculture Economy Challenges: **
The book shows how Presently, Nigeria’s economy is primarily reliant on crude oil exports, rendering it susceptible to the fluctuations and uncertainties of global oil markets. This mono-economic structure poses significant challenges, as any shifts in oil prices can have cascading effects on the nation’s fiscal health. This underscores the imperative need to diversify the economy and explore alternative sources of revenue.
**Export Promotion Initiatives: **
The Author highlights how in response to the challenges posed by a mono-economy, Nigeria has implemented various policies and established organizations to promote non-oil exports. The Nigerian Export Promotion Council (NEPC) and the Nigerian Export and Import Bank are key players in facilitating and supporting non-oil exports. By broadening the export portfolio, these initiatives aim to reduce the nation’s dependency on oil revenues and enhance economic resilience.
**Export Controls and Regulations: **
Yakusak explains how Effective export controls and regulations play a pivotal role in maintaining a balance between domestic supply and export demands. These measures he explains ensure that local industries have access to necessary materials and products, while also guaranteeing the quality of exports. Furthermore, these regulations provide essential data for assessing the non-oil sector’s contribution to the economy, thereby informing strategic decision-making.
**Stimulating Export through Incentives: **
He went on further to highlight how Nigeria has implemented incentive schemes to encourage and support non-oil exports. Programs like the Export Development Fund and the Nigerian Export Processing Zones Authority Act provide financial and infrastructural assistance to exporters. Despite the existence of these incentives, their potential impact remains limited due to challenges in their implementation and a lack of awareness among potential beneficiaries he says.
**Navigating International Trade Terms: **
A critical aspect of successful international trade is understanding and utilizing standardized trade terms, or INCOTERMS. These terms define the responsibilities of exporters and importers regarding transportation, costs, and risk allocation. Careful consideration of these terms ensures smooth transactions, facilitates international trade relations, and minimizes disputes.
**Embracing Emerging Strategies: **
Nigeria’s journey toward economic diversification includes innovative strategies such as Export Production Villages and Export House Schemes. These initiatives aim to create an environment conducive to export-driven growth by providing specialized facilities and support systems. The single window concept streamlines administrative processes, reducing the complexities exporters face.
**Globalization and Trade Relations: **
Embracing the benefits of globalization necessitates building robust trade relationships with other nations. Achieving this entails strengthening Nigeria’s export sector through dynamic strategies that respond effectively to evolving market conditions. By doing so, Nigeria can harness the advantages of globalization while reducing vulnerability to external shocks.
**Conclusion:**
Diversification of Nigeria’s economy is not only a matter of economic prudence but also a strategy for long-term sustainability. Through a historical lens, we recognize the consequences of relying heavily on a single commodity. The exploration of various policies, regulations, and strategies for non-oil export promotion presents a multifaceted approach to fortify Nigeria’s economic foundation, paving the way for a more resilient, diversified, and globally competitive economy.
Author
Dr. Ezra Yakusak,is an authority in the Nigerian export sector with a PhD in law, As a member of the Nigerian Export Promotion Council, he possesses an in-depth understanding of Nigeria’s economic challenges and potential pathways to sustainable growth through diversification.
