How Border Closure Dropped Nigeria’s Non-Oil Export Earnings By 11% To $320m

…Dangote Cement, Olam, Eight Other Companies Badly Affected

Despite the gradual pick-up of economic activities, the Nigerian borders remained closed resulting in a decrease in the value of non-oil exports to $320m in August 2020.

The $320m was arrived at based on analysis of the Nigeria’s export earnings during the period which was obtained from the Central Bank of Nigeria.

The $320m earned by companies operating in Nigeria in the month of August represents a decrease of 11.1 per cent when compared to the $360m earned in the month of July.

The Federal Government had in August last year shut it’s doors to neighboring countries under an exercise, code-named, ‘Ex-Swift Response,’ jointly conducted by the customs, immigration, police and military personnel and coordinated by the Office of the National Security Adviser.

President Muhammadu Buhari had said that the partial closure of Nigeria’s border with Benin Republic, was due to the massive smuggling activities, especially of rice, taking place on that corridor.

While government officials have repeatedly defended the closure, arguing that it was best for the economy, some finance and economic experts have said the move would further have a negative impact on trade.

A disaggregation of the export receipts showed that earnings from other non-oil and electricity exports to Benin Republic and Togo increased by one per cent and 0.6 per cent to $170m and $10m in August 2020, above their respective levels in July this year.

However, the figure showed that re-exports, declined by 25 per cent to $150m in August, relative to $200m in July this year.

Further analysis showed that the total value of export proceeds of the top ten exporters dropped by 22.8 per cent to $57.74m in August as against the $74.78m in July.

A breakdown of the top ten exported showed that Olam Nigeria Limited topped the list with a value of $15.11m or 26.2 per cent of the total, from the export of cocoa beans, cashew nuts, and sesame seeds to Turkey and China.

The second major non-oil exporter was Starlink Global and Ideal Limited, with a value of $6.79m (11.8 per cent), from the export of cocoa beans to Malaysia.

Further analysis of the export receipts showed that the third major non-oil exporter was Dangote Cement Plc at $5.71m representing 9.9 per cent of the total export income.

This was realised from the export of Dangote Portland limestone cement to Togo and Niger Republic.

This is followed by Aak Nigeria Oils and Fats Limited with a value of $5.50m realised from the export of vegetable oils and fats to India, Saudi Arabia and other Asian and Middle East countries.

British American Tobacco Nigeria Limited with a value of US$5.39 million (9.3 per cent), followed with export of cigarettes to Liberia, Guinea, Ghana, Cameroun, Cote d’Ivoire and Niger.

The sixth, seventh, eighth, ninth and tenth positions were taken by Atlantic Shrimpers Limited, ETC Agro Company Nigeria Limited, Metal Recycling Industries Limited, Valency Agro Nigeria Limited and Plantation Industries Limited, respectively, with export earnings of $4.9m (8.5 per cent), $3.99m (6.9 per cent), $3.62m (6.3 per cent), $3.49m (6 per cent) and $3.24m (5.6 per cent), respectively.

Their major export products were sea frozen shrimps, sesame seeds, aluminum, cocoa beans and pure prime pressed cocoa butter to Vietnam, Japan, India, Malaysia and France, respectively.