As Nigeria continues its journey toward economic diversification, one of the most urgent tasks before President Bola Tinubu is the need to strengthen the country’s non-oil export sector. This sixth edition in a series of policy advisory articles focuses on a critical factor—boosting the purchasing power of Nigerian exporters through smart trade finance policies.
If Nigeria is to match—and eventually surpass—the earnings from crude oil with non-oil exports, the country must empower its exporters to increase the volume and value of their goods. This means making capital more accessible and deploying modern trade financing tools to ease business operations.
Smart Financing: The Key to Higher Export Volumes
To fuel this transformation, the government should roll out a dedicated export financing programme offering affordable loans and credit facilities. While the Nigeria Export-Import (NEXIM) Bank has made commendable strides, its loan requirements remain too rigid—similar to commercial banks. Many small and medium-scale exporters are left behind due to these barriers.
The solution? Shift away from traditional collateral requirements and embrace flexible trade finance instruments such as demand guarantees and standby letters of credit—tools that secure loans without overburdening businesses with physical asset demands.
Export Credit Insurance: A Safety Net for Bold Growth
Risk is one of the biggest deterrents for new entrants into export markets. That’s why offering export credit insurance is essential. By protecting exporters from non-payment risks, businesses are encouraged to venture into new markets with confidence—and banks are more willing to provide funding.
This single measure alone could attract a wave of new exporters and unlock more capital, thereby boosting Nigeria’s foreign exchange earnings.
Powering SMEs with a Revolving Export Fund
Globally, small and medium-sized enterprises (SMEs) are the lifeblood of export-driven growth. Nigeria must establish a revolving export fund tailored for SMEs, with single-digit interest rates. This fund should cover vital inputs like machinery, certification, and raw materials—especially for manufacturers targeting global markets.
Offsetting High Business Costs Through Grants and Tax Incentives
With the high cost of doing business in Nigeria—fueled by poor infrastructure, expensive power, and high lending rates—exporters need relief. A practical policy would provide grants or subsidies for costs such as market research, trade show participation, and product certification. Complement this with tax incentives for export-oriented companies, and Nigerian goods will become far more competitive on the global stage.
Venture Capital: An Untapped Goldmine for Export Growth
While venture capital remains underutilized in Nigeria’s export ecosystem, it could be a game-changer. By setting up a venture capital fund for export-oriented startups and high-growth businesses, the government can help these firms scale operations and compete internationally.
This fund should also support export clusters and industrial zones, offering shared infrastructure to reduce capital requirements for individual exporters and encourage cross-sector collaboration.
Global Partnerships and Export-Focused Financial Products
To expand the pool of available export capital, Nigeria must strengthen partnerships with international financial institutions and trade partners, giving local exporters access to global capital markets. Additionally, banks and other financial bodies should be encouraged to develop specialized export financing products that reflect the realities and needs of Nigerian exporters.
Conclusion: Laying the Foundation for a Sustainable Export Economy
If implemented with care and foresight, these policies can significantly boost Nigeria’s non-oil export volumes and reduce the nation’s dependence on crude oil. By improving exporters’ access to capital, de-risking trade, and supporting SMEs, Nigeria can reposition itself as a dominant player in global trade.
With the right policies and the political will to drive them, Nigeria’s non-oil export sector won’t just grow—it will thrive.
