Managing Director of the Nigerian Import-Export Bank NEXIM Bank Mr. Abba Bello has disclosed that Nigeria recorded a trade deficit of N7.38 trillion in 2020, compared to a surplus of N2.23 trillion in 2019.

He made this known while discussing the Impact of Covid-19 on Nigeria’s External Sector in a presentation at the Association of Business Editors in Nigeria ABEN Workshop held in Lagos at the weekend.

The NEXIM Bank boss who was represented by the Head of Strategic Planning and Corporate Communications Department NEXIM Bank, Mr. Tayo Omidiji explained that the deficit reflects the confluence of 17.32% increase in Import and a 34.75% decline in export during the period.

He added that while the total trade declined by 10.32% in 2020 the crude oil export shrank by 35.71% to N9.44tn in 2020 just as the non-oil export also declined by 32.0%, reflecting the colossal collapse of economic activities in 2020.

He also disclosed that Europe accounts for 45-50 per cent of non-oil exports from Nigeria, & together with Asia accounts for 65-70 per cent of Nigeria’s non-oil exports

The NEXIM Bank boss also revealed that export to ECOWAS accounts for only 12 per cent, with Ghana and Togo contributing 30 per cent each of it.

He also said that Europe & Asia are mostly affected by the Covid 19 Pandemic, with negative consequences for consumer demand and trade

According to him, “in spite of the gradual ease of lockdown, continued movement restrictions and social distancing implies that consumer demand & trade will remain below pre-Covid levels for some time to come.”

He also disclosed that most agricultural commodities recorded price declines owing to Covid related factors.

“Shutdown of activities in Aviation/Tourism/Recreation has strong impact on demand for food products & confectionary

Low manufacturing activities in Europe/Asia has implications for demand for raw materials and export prices.” He added.

 

Analysing the consequences of the pandemic on trade, the NEXIM boss explained that the Nigerian Export Promotion Commission NEPC projected $110.8m loss from Cocoa export, $90m loss from Cashew & $10.5m loss from Sesame exports in 2020

 

However, the Price of Ginger increased probably due to Covid related demand as well as Gum Arabic owing to use in pharmaceutical industry.

 

Stating the NEXIM’s response to the Covid 19 threat to economy, he explained that the Bank reduced interest rate from 9% to 5% while the Moratorium extension on loans to exporters was provided.

NEXIM also commenced promoting export to markets that are less impacted by the pandemic by developing risk mitigation instruments such as Export Credit Insurance and Investment Guarantees.

The NEXIM also introduced Special Intervention schemes such as Small and Medium Enterprises Export Fund and the Women and Youth Export Fund

He listed the African Export-Import Bank Afreximbank $1billion Nigeria African Trade & Investment Promotion Programme NATIPP, the $25m Pandemic Support Programme, N500bn Export Stimulation Facility ESF managed in collaboration with the Central Bank of Nigeria to support export oriented projects and the N100 billion Export Development Fund (EDF) provided to NEXIM by CBN and targeted mostly at the Small & Medium Enterprises as other option available for those in export business to explore.

Speaking during the occasion, the Director-General Lagos Chamber of Commerce and Industry LCCI an arm of the organised private sector OPS Dr. Muda Yusuf tasked the Central Bank of Nigeria CBN to review its policy on repatriation of export proceeds with a view to allowing exporters have free and unfettered access to their export proceeds.

He added that there is need for the apex bank to rethink, or reevaluate its foreign exchange policy on the repatriation of export proceeds to encourage drive on non-oil exports.

According to him, “CBN’s policy on repatriation of export proceeds result in sharp practices and corruption in export documentation processes, with many exporters avoiding filling the Nigerian Export Proceeds Form (NXP), otherwise known as ‘Form NXP.”


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