Page 28 - Azerbaijan State University of Economics

Chibuike R. Oguanobi, Geraldine E. Nzeribe, Chukwunonso S. Ekesiobi: Export promotion
in Nigeria: has the impact of banking sector reforms been felt?

1. Introduction
Over the decades, globalization and its accompanying openness of national
borders has been one of the major subjects of both theoretical and empirical studies.
In this present study, the offspring of globalization under investigation is
international trade as it affects the Nigerian economy, amidst its export promotion
campaign.
Nigeria is indeed an open economy with international exchange of goods and
services constituting a highly significant proportion of its formal and informal
activities, both economic and otherwise. Over the years, there has been tremendous
increase in the rate of international transactions between Nigeria and the rest of the
world. Prior to 1960 and even in the early years of the independence era, Nigeria
was an agrarian economy. Agriculture was the country‟s major sector, providing
both cash and food crops for domestic consumption. It also accounted for the largest
share of the country‟s foreign exchange earnings. We have heard much of how
Malaysia got its first oil palm seedlings from Nigeria in the early 1960s when oil
palm produce was already a major export earner for Nigeria (Soludo, 2006). Infact,
during this period, agricultural and agro-allied exports constituted an average of 60
percent of the country‟s total export. This figure eventually reduced drastically to
about 25 percent between 1975 and 1979 due to the emergence of crude oil and the
follow-up oil boom of the 1970s.
The oil boom was the genesis of a change in direction of economic activities in
the country. A convincing illustration to underscore the magnitude of this change is
provided by current statistics. January 2016 statistics have shown that export of
commodities such as oil and natural gas accounts for more than 91 percent of
Nigeria‟s total export. By the end of 2014 fiscal year, about 43 percent of Nigeria‟s
total exports went to Europe, about 29 percent went to Asia, about 13 percent went
to America while about 12 percent were circulated across Africa. The recent crash in
the international price of crude oil (from over $100 per barrel in 2014 down to
$28.33 per barrel in January 2016), though led to the drastic fall in Nigeria‟s growth,
never affected the proportion of export contribution to such an epileptic growth.
From the foregoing, it is obvious that at each time over the decades, the
Africa‟s largest country has been significantly dependent on export proceeds for the
enhancement of national income. To consolidate on this through diversification of
the economy, the Nigerian government has targeted export promotion by first
establishing the Nigerian Export Promotion Council (NEPC) charged with the
responsibility of among other things, promoting the development and diversification
of Nigeria‟s export trade. The recent banking sector reforms in the country was
equally aimed at making the country‟s financial institutions strong enough to among

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