TRALAC - Trade Law Centre

'Nigeria’s duty-free export to US shrinks to $300m'

Friday, 23 October 2020 Published: | Ife Ogunfuwa

Source: The Punch (Nigeria)

Nigeria’s export to the United States under a duty-free policy declined in the first eight months of 2020, recording $300.48m from January to August.

According to the latest African Growth and Opportunity Act policy trade statistics, exports to the US under the duty-free policy fell by 88 per cent from $2,502.86m in the first eight months of 2019 to $300.48m in the corresponding period in 2020.

The AGOA, a United States’ trade policy, enacted in 2000, is a legislation that facilitates a duty-free trade between exporters from sub-Saharan Africa and the United States.

Annual trade data showed the largest contribution towards AGOA-eligible trade commodities is usually oil exports mainly from Angola and Nigeria, and to a lesser extent, Chad and the Republic of Congo.

For instance, oil export under the policy accounted for 99.7 per cent of Nigeria’s AGOA exports to the United States in 2019.

According to the statistics, oil and gas products valued at $3.12bn were exported to the US under the policy in 2019.

However, South Africa, Kenya, Ethiopia, Lesotho, Ghana and Madagascar are among the leading non-oil AGOA exporters.

Kenya, Ethiopia and Madagascar dominate the apparels sector.

The United States’ import of Nigeria crude oil plunged by 63.03 per cent in the first quarter of this year, compared to the last quarter of 2019.

Data from the US Energy Information Administration showed that the country imported 5.53 million barrels of crude oil from Nigeria in Q1 2020, down from 15.07 million barrels in Q4 2019.

The Executive Director and Chief Executive Officer, Nigerian Export Promotion Council, Mr Olusegun Awolowo, while speaking at a virtual event recently noted that only a few Nigerian exporters had benefitted from the duty-free trade opportunity despite series of sensitisation carried out by the council.

He explained that an assessment of the impact of coronavirus on agricultural exports showed that the pandemic would lead to a fall in export of cocoa beans, cashew nuts and sesame seeds this year.

According to him, the crash in oil prices as a result of the pandemic is an indication that a mono-product economy is not sustainable and that there is an urgent need to develop non-oil export.

“We cannot rely on crude oil export as both our major source of government revenue and foreign exchange generation. We must diversify our export base,” Awolowo said.

He identified the export of services as a rapidly growing export industry that could generate more revenue for the government.

To ease the burden on non-oil export during the coronavirus pandemic, Awolowo suggested the realignment of the exporters’ foreign exchange window with the prevailing foreign rate.

Following the coronavirus-induced crash in oil prices earlier this year and declining demand, Nigeria has been struggling to sell its crude oil cargoes.

Prior to the lockdowns and collapse in crude oil demand caused by coronavirus crisis, the production of US shale oil had led to a significant reduction in the exportation of Nigerian crude oil.

View related news articles

Nigeria’s duty-free export to US shrinks to $351m

Nigeria’s duty-free export to US shrinks to $351m

Nigeria’s export to the United States under a duty-free policy declined in the first nine months of 2020, recording $351.73m from January to September. According to the latest African Growth and Opportunity Act policy trade statistics, exports to the US under the policy fell by 86.97 per cent from $2,699.13m in the first nine months of 2019 to $351.73m in the...

27 December, 2020
Chamber plans business parks to deepen US-Nigerian trade relations

Chamber plans business parks to deepen US-Nigerian trade relations

The Nigerian America Chamber of Commerce says it is planning to establish parks in states for businesses to benefit from the duty-free Africa Growth Opportunities Act of the United States government. The President, NACC, Otunba Toyin Akomolafe, during a courtesy visit to The PUNCH head office in Ogun State on Tuesday said the parks would be a platform to create awareness of...

16 December, 2020
'The strategic importance of AGOA'

'The strategic importance of AGOA'

The African Growth and Opportunity Act (AGOA) is a United States bipartisan trade legislation that was signed into law on May 18, 2000 by former US President Bill Clinton – it means AGOA is 20 years old this year. Initially, the Act was planned to last for eight years but former President George Bush signed legislative amendments into law in July 2004 and extended the...

13 July, 2020
Nigeria and the benefits of reviving cotton sector

Nigeria and the benefits of reviving cotton sector

In the 1980s and 1990s, Nigeria had, unarguably, one of Africa’s largest textile industry with over 180 textile mills functioning optimally, employing close to over 450,000 workers and contributing in excess of 25 per cent of the workforce in the manufacturing sector. Sadly, that once vibrant textile industry, due to lack of vision on the part of those managing the...

18 March, 2020
Nigeria can harvest $2bn from yearly spices export

Nigeria can harvest $2bn from yearly spices export

Professor Haruna Dikko Ibrahim is the Director-General Raw Material Research and Development Council (RMRDC) Abuja. In this interview, he explains the huge potentials Nigeria can generate from the export of spices.  Excerpts: Can you give us an idea into the global trade of spices? The global seasonings and spices market is on an upward trend.  The spice...

18 August, 2019