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PROJECT TOPIC – PROBLEMS AND PROSPECT OF MARKETING NON – OIL EXPORT PRODUTS OF NIGERIA

PROBLEMS AND PROSPECT OF MARKETING NON – OIL EXPORT PRODUCTS OF NIGERIA

 

ABSTRACT

In the face of dwindling foreign exchange earning from Crude Oil due to the global oil glut, the Federal Government of Nigeria was forced
to revisit the abandoned non – oil sector of the economy for extra revenue Non- Oil sector was the major foreign exchange earner before
the discovery of oil in the early 60s. It was therefore the objective of the research work to unveil the factors that worked against the marketing of
non – oil export products from Nigeria. It was also an objective to consider the prospects of marketing these non – oil export products of
Nigeria. At the end recommendations will be made. This data used in this study was obtained through both primary and secondary sources.
This primary sources of data included the use of questionnaires and those obtained through oral interview of stakeholders while the
secondary sources includes textbooks, articles, internet and journals as well as other unpublished materials. The problems found out in the
course of the research include the fact that Nigeria’s exports are made up of 8 percent manufactured good and 92 percent primary production,
non competitiveness of export products, ineffective implementation of export incentives, pricing as well as marketing problem.

Four hypothesis were formulated and tested. The first hypothesis sought to find out the effectiveness of export intensives available to
exporters, the second sought to determine the effect of product quality on their marketing. The third hypothesis tested the effect or high
production cost on international competitiveness of Nigeria export products. The fourth hypothesis tested the availability of market
information of Nigeria exporters. The instrument of data collection and analysis used is the chi – square method where the decision rule was
applied. The analysis of data and the findings formed the basis of conclusions arrived at the recommendations made.

 

CHAPTER ONE

INTRODUCTION

Historically, Nigeria has operated a dual economy where modern segment, is heartily dependent on crude oil earnings dominates a traditional agriculture and trading segment. At independence, agriculture accounted for well over 50 percent of gross Domestic Products (GDP) and was the source of export earning
and public revenue with agriculture marketing boards playing a leading role. Prior to Nigeria’s independence in 1960, cash crops were introduced, harbors, railways and roads were developed and a market for consumer’s goods began to emerge. For almost three decades now, oil has emerged as a heading variable in the national economic science. Its dominance and over – whelming importance has left Nigeria operating a mono – economy with oil accounting for more than 78 percent of federal government revenue, more than 95 percent of export earnings, and about 11 percent of GDP at factor cost. Agriculture
(including livestock, forestry and fishing) is still the principal activity of the majority of Nigeria, constituting about 40 percent of GDP By 1979, the country’s sales of petroleum product had fallen drastically, mainly due to the actions of united states and her collaborators after the Arab-Isiaeli war. It was in light of the falling of oil price that federal government of Nigeria embarked on non-oil export promotion to boost its foreign exchange earning.

That it did by establishing the Nigeria export promotion council (NEPC). Since 1986, the Nigeria has taken a number of steps and initiated various policies to
promote non-oil export expansion under the rubric of structural adjustment programme (SAP). The objectives of SAP was to stabilize the economy and remove distortion in economic incentives by changes in trade and exchange regime, decontrol of prices, and marketing arrangement for goods and services. Among other things, these reforms are also expected to alter and re-align aggregate domestic expenditure and production patterns so as to minimize dependence on imports and on oil exports, and above all to enhance the non-oil export base. Seven years of implementing the economic reforms under the wellintended SAP of 1986-1993 left the economy prostate, while the next half-decade (1994-1999) witnessed an unprecedented corruption and international isolation which further crippled the economy. Unfortunately, after 7 years under a democratic experiment, the economy is still groaning under the strains of those past events. The government and people of Nigeria have always acknowledged that Nigeria products are not doing well in the international market but nothing concrete has been done to reverse this tread.

In a recent study by the Bank, it was contended that in most of developing countries that have successfully grown through export
promotion, tier trade policies have included substantial protection of local manufactures. In addition, government have taken some steps to offset
some disadvantages of protection by actively supporting exports. Interventions to support specific industries have generally not been successful.
The export push strategy; a mix of fundamental and interventionist policies used to encourage rapid manufactured export growth has resulted in numerous benefits which includes more efficient allocation of resources; increased acquisition of foreign technology and rapid productivity growth. The problem hinged mainly on the neglect of non-oil sector, Nigeria’s wealth due to oil boom was only a euphoria, which quickly went as it came. Perhaps, this has made some authors like Ejiofor (1980:23)to argue that oil boom blessing .

 

Starting from 1985 till now, policy makes realized that a major effort to diversify the sources of foreign exchange and reduce the dependence on crude oil export was imperative. The industrialization strategy had to correct the significant of anti-export bias that existed,achieve a more mental trade incentive regime and perhaps a pro-export bias. This policies came as a result of these: a. First, Nigeria had virtually exhausted the possibility of industrial growth through import- substitution, which could be maintained if the foreign exchange to import cheap capital and intermediate goods could be obtained through
expanding primary commodity exports do not appear bright in an import-substitution environment coupled with the poor global prospects for these  commodities. b. Second, policy makers see export see export potential in transforming Nigeria’s abundant gas and oil reserved into exportable processed and semi-processed goods.

Third, they felt there was need to find a stable alternative means of generating foreign exchange to ease thetremendous debt burden and balance of payment difficulties Some of the major constraints to export growth especially in the 1970’s have been the inadequate infrastructural support (particularly in
the field of freight, transport, product developing and quality control) absence of product specific marketing strategies and promotional programmes; administrative delays, cumbersome export document and procedures. Non-oil export growth, despite a marked improvement in the last few years, it has not been sufficient to offset the increasingly unfavourable balance of trade. Despite these limitations, the export sector has succeeded in stablishing a consolidated base with a range of established products with growth potential. It has also a fair range of new products which can be developed to produce substantial export capacity, which could be as a result of active marketing promotion.

It has a reasonably developed industrial base supported by a fairly experienced management and labour force whose technical infrastructure and banking and commercial services, are gradually queuing themselves to meet the increasing needs of non-oil export sector. With this background and government policies and programmes to support export development during the period of structural adjustment programme, the export sector has the potential of becoming major catalyst for economic development once adequate attention is paid to so as to sustain its growth. Historically, a number of export strategies and polices have been implemented with no definite promising results. The traditional agricultural export policies during the first phase were suited for the level of development the country had planned.

It absorbed more labour, and required high levels of productivity for the local farmers. The export monoculture policy of the 1970’s in which oil was the predominant good, had proved not only risky and variable in its payoffs but had exposed the economy precariously to adverse external economic and trade policies most of the problems Nigeria faced while trying to promote non-oil exports will centre on competition. At present, the export industries set up in Nigeria produce the traditional consumer goods: for example, cotton, footwear, textiles, soft drinks, beer, cement and rubber etc. The chances of security any significant breakthrough in these lines are very remote. This is because Nigeria, being a late starter, will find it difficult to complete with similar
products made by such developed countries as the United States, the United Kingdom and Japan. However, within the framework of the SAP the vigorous promotion of non-oil exports has been one of the major economic activities embanked upon by the Babangida administration to receive the ailing Nigeria economy. One of the non-oil export promotional devices has been the massive devaluation of the naira in the foreign currency and thus boost the quantum and value of non-oil export.

Earlier in the 1986, budget package of export incentives were later embodied in the export (incentives and miscellaneous provision) Decree No 18 of July 1986. The domestic marked manufactures is large, but the capacity utilization is low in Nigeria. As a result, the inability of certain industries to produce demand will tend to exclude these manufacturing industries from engaging in export business. through some government incentives like the recent availability of credit insurance that protects exporters again risk: and through the operations of the Nigeria exports promotion council (NEPC) the development of exports of certain goods can now be feasible.

PROBLEMS AND PROSPECT OF MARKETING NON – OIL EXPORT PRODUCTS OF NIGERIA

 

1.2 STATEMENT OF PROBLEM

The basic problem of this study is to evaluate the problems of nonoil export products of Nigeria. Some of these problem are:
1. The problem of low production and high production cost

  1. The export incentives provides to the exporters are not properly administered and the therefore not effective.
  2. Low quality of manufactured goods in the country as a result of this, do not melt international.
  3. Reduced levels of new investments in discovered deposits.
  4. Obsolete equipment which are used in production,.
  5. Wrong pricing of agricultural export products

 

PROBLEMS AND PROSPECT OF MARKETING NON – OIL EXPORT PRODUCTS OF NIGERIA</h

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2 Comments

  1. GODWIN LUKE August 23, 2017

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