1
PROBLEMS AND PROSPECT OF MARKETING NON - OIL
EXPORT PRODUTS OF NIGERIA
A CASE STUDY OF ENUGU STATE
BY
KANU IHUOMA .N.
PG/MBA/05/4571
DEPARTMENT OF MARKETING
FACULTY OF BUSINESS ADMINISTRATION
UNIVERSITY OF NIGERIA ENUGU CAMPUS
AUGUST 2006
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CERTIFICATION
I, Kanu Ihuoma .N. a postgraduate student in the Department of
marketing, with registration number PG/MBA/05/45701, has satisfactory
completed this research project needed for the award of a master’s
Degree of Business Administration (MBA) in marketing.
.............................. …………………………
C B ACHISON Dr. I. C NWAIZUGBE
Project Supervision Head of Department
………………………. …………………………
Date Date
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DEDICATION
To Almighty God, for His assistance and guidance through out
my (MB A) programme.
Also to my beloved parent Mazi and Mrs. E. O. Kanu. My
Brothers, Chike, Barr. OGB, Engr. Uzo, Kene, Onyi, for their moral
support.
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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well as other unpublished materials.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.
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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.
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TABLE OF CONTENTS
Content
Title
Certification
Dedication
Acknowledgement
Abstract
Table of contents
CHAPTER ONE
1.1 Introduction
1.2 Statement of Problems
1.3 Objectives of Study
1.4 Research Methodology
1.5 Hypothesis
1.6 Significant of Study
1.7 Limitations and Scope
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CHAPTER TWO REVIEW OF RELATED LITERATURE
2.1 Introduction
2.2 History of Nigeria Exports
2.3 National and Global Communication Trade
2.4 Government Intervention in Nigeria Commodity Trade
2.6 Export Promotion in Nigeria
2.7 Constraints on Export Growth in Nigeria
2.8 General Problem of Non oil Export Sector
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 sources of Data
3.2 Primary Data
3.3 Secondary Data
3.4 Sampling Plan
3.5 Strengths and Weakness
3.6 Sampling Size Determination
3.7 Sample Technique
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3.8 Data Collection and Processing
CHAPTER FOUR: DATE PRESENTATION AND ANALYSIS
4.1 Data Presentation
4.2 Questionnaire Distribution and rate of response
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDTAIONS
5.1 Summary of findings
5.2 conclusions
5.3 Recommendations
Bibliography
Appendices
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CHAPTER ONE
1.1 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.
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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 well-
intended 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
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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 .
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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.
c. Third, they felt there was need to find a stable alternative
means of generating foreign exchange to ease the
tremendous debt burden and balance of payment difficulties.
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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
establishing 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
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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
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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.
1.2 STATEMENT OF PROBLEM
The basic problem of this study is to evaluate the problems of non-
oil export products of Nigeria. Some of these problem are:
1. The problem of low production and high production cost
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2. The export incentives provides to the exporters are not
properly administered and the therefore not effective.
3. Low quality of manufactured goods in the country as a result
of this, do not melt international.
4. Reduced levels of new investments in discovered deposits.
5. Obsolete equipment which are used in production,.
6. Wrong pricing of agricultural export products
1.3 OBJECTIVES OF THE STUDY
The basic objective of this study is to evaluate the performance of
non-oil export sector in Nigeria with a view of identifying the factors
responsible for its poor performance. These includes:-
1. To explore the extent to which low level as well high cost of
production affected the marketing of non-oil export products.
2. To examine the volume of market information available to the
exporter.
3. To examine the general quality of manufactured export
products from Nigeria.
4. To examine the affect of Obsolete equipment in the
production and exportation of non-oil export product.
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5. Reduced levels of now investments in discovered deposit.
6. To examine the effectiveness of export incentives provided
to the exporter.
7. To determine the effect of inappropriate pricing of agricultural
exports products.
1.4 RESEARCH METHODOLOGY
The data for the analysis were obtained from primary and
secondary sources.
The approach employed in this study to analyze the data obtained
from field work is the use of chi-square test of statistic while the desk
analysis relied more on the secondary data, deductions from the primary
data were used to corroborate and rationalize some of the results of the
desk analysis.
1.5 HYPOTHESIS
1. Ho: There is not enough information available to exporters
about the existence of markets for their products.
H1: There is enough information available to exporters
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about the existence of markets for the products.
2. Ho: high cost of production does not affect the international
competitiveness of Nigeria’s export products.
H1: High cost of production affects the international
competitiveness of Nigerian’s export products.
3. Ho: The export incentive are not effective in the marketing
of non-oil export products.
Ho: The export incentives are effective in the marketing of
non-oil export products.
4. Ho: Low quality of Nigerian export does not affect its export
marketing performance.
H1: Low quality of Nigeria exports affect its export marketing
performance.
5. Ho: Reduced levels of new investment in discovered
mineral deposits does not affect their marketing.
H1: Recued level of new investment in discovered mineral
deposits affects their marketing.
6. Ho: Inappropriate pricing of agricultural export products
does not affect the international market performance.
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H1: Inappropriate pricing of agricultural export products
affects their international market performance .
1.6 SIGNIFICANT OF THE STUDY
1. Formulate and implement effective strategies to bolster
prospects of marketing non-oil export products of Nigeria.
2. To adopt and implement more effective incentive schemes to
motivate exporters to attain higher export whines.
3. To reform and strengthen the roles of export facilitating
agencies.
4. To engender macroeconomic stability and to create enabling
investment climate
1.7 LIMITATIONS AND SCOPE
Exports in Nigeria are composed of oil and non-oil products. Oil
export is mainly crude petroleum while non-oil exports include agriculture
and forestry products, minerals, manufactured good, liquefied natural
gas, condensate and other visible and non visible services. for the
purpose of this study non-oil exports refer to agricultures, foresting
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products and minerals, which includes cocoa. Groundnut oil, palm
produce (palm kernel and oil), Natural rubber, Hides and skin, Wood,
Fishes, Cotton, Rubber, timber, logs, plywood, tin etc. while
manufactured products such as: Textile, Chemical, Motor vehicle
/machinery, Soap/detergent, Beer/Beverages, Urea, Processed skin
other manufactured exports.
As expected of any applied research, finance was also a
constraints as it limited the researcher in his search for data.
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CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 INTRODUCTION
The popularity of marketing in all aspects of business has grown
significantly over the years. Marketing today, is no longer seen as a
department of a business. For instance, Drucker (1968) defines
marketing as an embodiment of the entire business. this definition is
explained by Hanson (1979:28) as the whole business seen from the
customers point of view.
Marketing is the all important set of creative human activities
aimed at identifying, anticipating and satisfying needs or wants through
exchange as efficiently and effectively as possible (Adirika 1930:3) this is
prominent in all the definitions of marketing that have over the years
evolved that is the marketing centers on customers satisfaction. From
this point scholars of marketing became aware of the divergent views on
whether an organization should put its goal and objectives first before
customers satisfaction or the other way round. Kir Palami (1987:469)
stated that international market can be divided into form segment,
namely:
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1. The industrial countries Book and Remer (1977,33) defined
international marketing as a process by which any firm
performs its marketing operations, either import or export, or
provision of services in at least two countries. Nwokoye
(1980: 235) defined it as any form of marketing conducted
across national boundaries. Export marketing has its peculiar
problems distinct from general problems of market. These
problems have to do with the target market, the mode of
payment, the tastes and culture of the consumers, the form
of those goods, affordability coupled with the decision to buy
and the provision cost. Star et al (1977, p.5) established that
that primary objectives of the marketing process is to satisfy
the consumers need and wants through the development
and implementation of sound profitable marketing
programmes. These marketing programmes are subsumed
in the overall objective of the firm. An analysis of the
marketing problems that confront firms are traceable to the
marketing mix of 4ps + 1, which is product, price, place,
promotion and information. McCarthy (1968,31).
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Non-oil export marketing as the focus here is the planning and
execution of all those marketing activities necessary to satisfy the needs
and wants of Nigeria’s non oil products in the international market.
WORD (185, P. 15) stated that prospecting and exporting involves
a lot money that goes into financing activities. To decide where market
development efforts will pay off the most, exporters should
systematically narrow down their targets.
2.2 HISTORY OF NIGERIA’S EXPORTS
Export development in post-independence Nigeria can be divided
into three phases. The first phase lasted till the end of the civil war in
1970 and was characterized by agricultural production. The second
phase includes the years 1971 through 1984, and was marked by a
dominance of cruse oil production and exportation. The third phase that
started in 1985 was marked by a transition to an export oriented
industrial strategy with priority given to the development of non-oil
commodities. In the periods the export-oriented strategy becomes
institutionalized, and rapid economic growth pursed.
Most of the civil war was fought in the palm belt, which disrupted
the production and export trend. The end of the war marked the
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beginning of the second phase. This was a boom period partly due to a
restoration of oil production and increased reconstruction activity during
which labor drifted from the agricultural sector to the industrial and
construction sectors where the wage rate was comparatively higher.
2.3 NATIONAL AND GLOBAL COMMODITY TRADE
Agricultural exports accounted for much of Nigeria’s non-oil
exports as at 1986, thus, the expansion in non-oil revenue is significantly
hinged on expansion in agricultural exports. The belief that the private
sector is more efficient than government underlines the preference of
Breton woods school for deregulation or liberalization policies.
The concept of a pure free market global economy assumes that
all production, investment, savings, exchange and consumption within
and between all actions are conducted in perfectly competitive market.
International commodity (agricultural product) trade in the real
world is organized under the international commodity agreements (ICAS)
thus, international trade in cocoa, natural rubber and palm kernels,
which are Nigeria’s major non-oil tradable are organized by their
respective (ICAS). It’s important to note that the commodity exporting
countries, commodity-consuming countries, UNCTAD and the IMF were
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principal actors in the formulation of an international approach to
commodity problems in the 1970’s. According to UNCTAD (1974) some
of the issues in approach to commodity problems are:
i. Establishment of international stocks to ensure that
excessive movements in prices can be prevented by market
intervention.
ii. The creation of a common fund for the financing of
international stocks
iii. The building up of systems of multi lateral into purchase and
supply commitments as a means of improving the
predictability of resources in commodity production.
iv. Improved compensatory agreements when market
intervention fail to support prices and earnings.
v. Implementations of counter-protective measures against
restrictions on processed exports.
vi. Expansion of processing and diversification.
The foregoing shows that international commodity exchange does
not take place in free markets but in more or less bilateral oligopoly
market. Consequently, strategic bargaining is the key determinant of
pay-offs (prices, quantities and revenue) in the market. Given that
producers and commodities have conflicting objectives, the dynamic
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game seems to be a zero sum game, therefore, if supply outruns
demand in long term, consuming nations would be better placed to
improve their payoffs over the long run at the expense of commodity
exporters. This would lead to lower commodity prices and hence, lower
income for exporters in the long term. Moreover, if supply persistently
outruns demand, commodity exporters would find of difficulty to bargain
collectively because consuming nations being more developed than
commodity exporters that they also control the Breton woods institutions.
Thus, the more strategically placed consumers could easily break the
ranks of commodity exporters through preferential trade treatments and
rank-breaking incentives. In this scenario, increase in global supply
when supply outruns demand is not in the long-term interests of
commodity exporting nations or their farmers.
2.4 GOVERNMENT INTERVENTION IN NIGERIA COMMODITY
TRADE
Government intervene in Nigeria agricultural dates back to 1942
when the colonial administration established the west African produce
marketing board, which took over the responsibilities for purchases of
cocoa, palm oil, and oil seeds (Akintomide, 1974) At the onset, the
production and the trade in agricultural tradable sought primary to satisfy
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the interest of Britain and not the interest of Nigeria farmers, consumers
or the economy respectively.
According to Akiutomide (1974), post independence marketing
boards sought to:
i. Raise the bargaining power of producers on the domestic and
international markets given that produce farmers are small with
little or no experience relative to the concentrated and organized
demand they face.
ii. Improve the marketing of agricultural products and ensure high
grade produce.
iii. Provide reserve funds to shelter producers against price
fluctuations.
iv. Collect funds for research, extension works and for the
development of the agricultural industry.
v. Provides information about production and trade.
vi. Provide control of export commodities on which Nigeria depended
for export revenue.
vii. Act as executive agency for government.
It is apparent that existence of the multiple objectives of marketing
boards at independence are linked to the historical circumstance of
Nigeria and key desire at independence was developed. Abbot (1971)
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supports trade regulations on the ground that an organized procedure
can facilitate technological change by helping to raise the living standard
of the operators as well as providing them with the financial resources
for additional investment s and expansion of their activities.
According to Helleiner (1966) marketing boards have and
continued to be an extremely effective instrument for the mobilization of
savings for government sponsored economic development.
However, before independence, according to Olakanpo and Feriba
(1974) marketing boards activities and the surplus they generated, were
geared to strengthening the finances of Britain. Thus, the expanded and
revised mandate of the marketing boards sought to redress the
exploitation of farmers and Nigeria by Britain. However Ogunsheye
(1966) argues that stabilization of produce prices by marketing boards
caused farmers incomes to be unstable. Similarly, Olatundosun and
Olayide (1974) suggest that over the period 1948 – 1967 producers of
Cocoa, Palm oil, Palm kernel, and Groundnut received less than the
world prices for their produce.
The debate on the relevance of marketing boards dates back to
the period after their introduction in 1927 in Canada and Austrilia. The
call for the abolition of Nigeria marketing Boards on the ground that they
29
exploit Nigerian farmers became strong after Nigeria’s independence
(onitin and olatubosun, 1974). This is various given that.
a) Agriculture was supposed to be an engine of growth in the
Nigerian economy by generating surplus for development .
b) The exploitation of producers of the export products by their
foreign customers (Aluko, 1974).
c) The marketing boards predated independence by about 20
years during which they generated trading surplus.
d) The surplus hitherto, used to strengthen British finances,
were after independence used for development projects.
An international conference held at the University of Ibadan from
29 March to April 3, 1971 arrived at the following conclusions.
i) Organized marketing of export crops particularly for the
stabilization of producer prices is indispensable especially in
those areas where production is concentrated in the hands of
small farmers.
ii) Effective extension and rehabilitation programmes are as
important as produces prices to output expansion.
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iii) A balance should be struck between long – term
development objectives of stabilization of producer prices
and incomes.
All of these suggest a reform, rather than the dissolution of
marketing boards. However, the call for reform in 1971 gave way to
strong arguments for dissolution in the early parts of the 1980s.
2.5 THE NATIONAL AND INTERNATIONAL COMMODITY
PROBLEMS.
International commodity agreement are intended to stabilize prices
for an particular commodities by determining world output levels and
assigning quotas to particular countries. They are similar in conception
to cartel OPEC. There is some experience for example in sugar, wheat
etc.
If they are to work, they require cooperation and compromise, they
also require the existence of a policeman to ensure that members abide
by the rules.
Lipsey (1966) identifies an agricultural problems as one of the most
perplexing problems facing policy makers in western countries. He
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highlights four issues at the heart of the agricultural problem and they
are.
i) In many western countries, the average income of farmers
was significantly lower than the other sectors. For example
while agriculture employed 3.5 percent of Britons, the
workers earn only 2.5% of the total British income.
ii) Agricultural supplies show a tendency to outrun demand with
the result that, free market prices tend to be depressed to the
disadvantage of farmers.
iii) Agricultural output tend to be unstable arising from its
dependence on natural factors such as weather (rainfall,
humidity, temperature etc) disease and pests and natural
disasters (such as typhoons, floods, and earthquakes) which
are inherently unstable. This agricultural output are
unplanned with periods of good and poor harvest.
iv) Intervention leads to increase in output and unsold
agricultural surplus.
Productivity growth in the agricultural sector would not be in the
best interest of the commodity exploiting countries of farmers if it causes
supply to persistently outrun demand. This is very likely, if income
32
elasticity of demand for agricultural products are lower than their supply
elasticity and there is no form of market intervention.
The resulting excess demand in a free market on agriculture.
Decline in returns relative to higher returns in high income – elastic
sectors world in turn, lead to a decline in investment of agriculture.
Consequently, the agricultural sector would decline. This chain reaction
led lipsey (1966: P.150) to predict that in a free market society, the
mechanism for a continued reallocation of resources out of low-elasticity
industries into high-elasticity ones is a continued depressed tendency on
prices and incomes in contracting industries and a continuous tendency
on prices and incomes in expanding countries.
The World Bank (1982) Reported notes that overvaluation of the
Naira necessarily places Nigerian products at a significant cost
disadvantage relative to foreign goods market. This suggests that
Nigeria’s exchange rate policy was the key constraints to exports of
industrial products. Though Nigerian statistics show an insignificant level
of manufactured export, the World Bank (1982) report indicates that
illegal exports of some magnitude are known to exist in a particular case
of glass containers (bottles) aluminum extrusions, detergents and soap,
textiles. However, this is written a strong or conclusive evidence of
Nigerian capacity in the exports of manufactured goods.
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For Africa to reserve its unfavourable export trends the region
must adopt appropriate trade and structural adjustment policies in order
to enhance its political and policy uncertainty, a high risk environment
and inadequate government commitment to reforms as the key factors in
Africa’s marginalized world trade. Civil wars, export taxes, smuggling
and false invoicing here negative effectives on trade performance.
AN OVERVIEW OF NON-OIL EXPORT PROMOTION POLICIES
It would be useful to specify clearly the key instruments of the post
1986 non-oil policy. What least, five decrees were promulgated between
1986 and 1988 as means of promoting non-oil exports in Nigeria. All the
decrees sought to improve price and non-price incentive to exporters of
non-oil products. In 1986, the three key decrees were promulgated as
follows:
i. Export (incentives and miscellaneous provision) Decree 18.
ii. Second
iii. Customs and Excise etc miscellaneous provision Decree No.
37.
Similarly, in 1988 two decree were promulgated, which are:
i. The Nigerian Export promotion Decree No 41.
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ii. Export Credit Guarantee and Insurances Scheme Decree
No. 13.
The SFEM Decree was targeted on non-oil export prices through
exchange late depreciation. Thus, the action system introduced in
September 1986, led to the depreciation of Naira against the convertible
currencies of Nigeria’s Major trading partners its dollars; British Pound;
Japanese Yen, Dutch Guilder, and so on. Most of the inputs used in
manufacturing are imported. The depreciation of naira rather made
imports costly while farmers were not producing enough to meet
demand.
The customs and excise etc miscellaneous provision decree
among others abolished export license for prohibited products on those
subjected to special restrictions. It also exampled non-oil products from
duties. Thus, removing theoretical tax on non-oil exports, which the
Breton woods school believed to be a cause of decrease in level of
Nigerians non-oil exports. In addition, it allowed non-oil export to retain
100% of export proceeds, which could be lodged indomicillary accounts
that could be opened for such purpose in Nigerian Banks.
To further deregulate the domestic mechanism for non-oil trade,
commodity boards which hitherto before (1986) organized the domestic
trade of agricultural tradable and also undertook their exportation were
35
scrapped ostensibly to allow farmers and private exporters of agricultural
tradable goods, a direct access to the international market so that they
could derive the full advantages and disadvantage of international trade.
The apart (incentives and miscellaneous provisions) Decree provided
for:
i. Tax free interest earned on export loans
ii. Currency retention scheme of 25% later 100% in
consonance with SFEM (Decree No. 18) for non-oil
exporters.
iii. A development found, that is the Export Development Fund
(EDF) to provide direct financial assistance to non-oil
exporters to meet part of their expenses in promoting their
products in the international Market.
iv. A duty drawback suspension scheme which exempts export
industries from import duties and excise duties.
v. The establishment of an Export Expansion Fund (EEF) to
provide cash grants to exporters of semi-manufacturers and
manufacturers to enable them increase their export.
vi. Higher capital tax depreciation allowance for manufactured
exports. Even though all these incentive were put in place
export volumes still remained low.
36
The Nigerian Export Promotion Council (NEPC) decree
established the NEPC and charged it with the responsibility of
spearheading the export promotion drive. The decree also
provided for the creation of three Zonal Offices in Lagos, Kano and
Port-Harcourt and the creation of Form Commercial Desks in
London, New York, Abidjan and Jeddah. These international
commercial desks are expected to promote the export of made in
Nigeria goods to the various sub-regions. NEPC again suffered the
normal government bureaucracy. It depended on government for
virturally everything. The council was not set up to recover some of
its cost. There were delays in releasing funds meant for carrying
out export related activities.
The Export Credit Guarantee and Insurance Scheme Decree
provided for the establishment of an Export Credit Guarantee and
Insurance Corporation under the provision of the CBN. The corporation
was to:
1. Issue guarantee to banks for pre-shipment financing required
by exporters to enable them produce to meet export orders.
2. Provide post-shipment export financial for exporters to
enable them extend credit facilities of foreign importers of
Nigerian products.
37
3. Provide foreign exchange revolving loans to exporters in
order to import raw materials and spare parts required to
specific export production.
It is not possible in this study to evaluate precisely and in detail the
extend to which the provision of the decrees have been implemented.
However, the value of the Naira in relation to the dollar has depreciated
persistently since 1986. In addition, the commodity boards have been
abolished since 1986 white non-oil export products are largely, no longer
subjected to quantitative or tariff restriction. It could therefore, be inferred
that the Major sources of disincentives according to the Breton woods
school exchange rate overvaluation, the commodity board quantitative
and tariff restriction on non-oil exports have since 1986 been removed. If
the underlying premises of reform policies are valid, then the trade
liberalization should generate positive and significant response from
non-oil exports.
Export promotion strategy is essentially a trade strategy, which
encourages production for exports and in which them is an embedded
bias for exports rather than import-substitutes. Whatever the incentive
exist must favour production for exports as much as production for the
domestic market. It major feature of export promotion strategies that they
provide at least as much incentives to earn as well as to save foreign
38
exchange. Export promotion strategy is invariably accompanied by
incentives to domestic manufactures and companies producing for
exports. The incentive thus, provided may be fairly uniform and may
sometimes be discriminatory across commodity groups. Depending on
the immediate objectives of the country involved. Other features of the
export promotion and incentives strategy includes:
• Ready access to imports of intermediate and capital goods to
exporters.
• Fairly realistic exchange rates
• Avoidance of quantitative restrictions
• Use of tariffs with relatively simple procedures to permit
exporters access to the international market at international
prices for their inputs.
In addition, export promotion drive has the tendency to reduce
dependence on the third country in the sense that foreign exchange
earnings grow rapidly, market become increasingly diverse and the
economy increasingly flexible.
BENEFITS OF EXPORT PROMOTION
Economists have measured the gains form an outward-oriented
strategy in terms of the usual classical gains form trade and a number of
39
dynamic considerations. They believe that export promotion strategy is
superior to the strategy of import substitution. Properly programmed and
implemented, an export promotion strategy can enable a country to
realize the benefits of international specialization consequent to relative
and comparative advantage present in the country. It can also provide a
stimulus to efficiency as a result of exposure to foreign competition and
technology and a prospect of worldwide market for products. Indeed, if a
country can export to the world market, it can enjoy considerable
economics of scale. Local industries would also reap the benefits of
internal economics of scale that could not have been achieved by
providing for only the limited home market. furthermore, the domestic
resources cost of earning a unit of foreign ends to be less than the
domestic resource cost saving a unit of foreign exchange. The value of
exports that could be produced with a given unit of scare factors would
be grater than the value of imports that could be replaced. In addition, a
pre-trade strategy is likely to attract foreign direct investment Export
promotion also contributes more than import substitution to be objectives
of greater foreign income. Being labour intensive in production technique
and dependent on the demand of a worldwide market, the non-traditional
exports may absorb more labour than import replacement. They may
also reduce the cost of employment in terms of the complementary use
of scare factors of capital and imported inputs.
40
2.6 EXPORT PROMOTION IN NIGERIA.
Export Promotion and the Structural Adjustment Programme
(SAP).
A Major attempt at promoting exports in Nigeria came with the
Structural Adjustment Programme (SAP) of SAP decree of 1986. The
era witnessed the introduction of new export policies and incentives. The
thrust of the programme was to achieved by the end of 1990, about $1
billion in earnings from non-oil exports of goods and service.
Consequently, export promotion was pursued within the framework of
trade liberalization and supported by the naira exchange rate
depreciation and generous export incentive. The immediate
consequence of the devaluation of the naira brought about very high
naira prices in agricultural commodities, even though the foreign
currency value remained uncharged. For example, a metric tone of
graded coca, which sold for 1,500 in 1984/85 before the advent of
Second-Tier Foreign Exchange Market (SFEM) sold for 7,500 and
11,000 in 1987/88 and 1988/89, respectively. The prices of cotton
similarly rose substantially from 850 per tone in 1985/86 to 4,500 in
1988/89. The result of the high naira prices of agricultural produce
coupled with the abolition of commodity Boards produced positive
41
impact on the desire to export goods, but since most of these goods are
primary commodities, the supply was unable to adjust to the new desire.
The euphoria also led to the emergence of exporters who were non-
indigenes and their main aim was not the development of Nigeria’s non-
oil export but that of repatriation of capital from the country.
However, the policy focus failed to adequately take cognizance of
the existing structure of production, which reflects inadequate production
of exportable surplus that can quickly take advantage to changes in
relative international prices. Furthermore, no account was taken of the
raw materials needs of domestic industries even where it was clear that
the supplies of such raw materials could not be increased in the short
run. The effect of this led to shortages of locally produced raw materials
for domestic processing of manufactured industries. One of the
industries most affected is the cocoa processing industries. In addition,
the policy failed to realize that most of the country’s current
manufacturing outfit grew out of the policy of import. Substitution and
they are, therefore, not geared for export promotion. Hence, the desire
to export manufactured goods where this would lead to shortages at
home was not fulfilled.
Where manufacturing industries had accumulated industries and
should therefore promote the export of such goods, these inventories do
42
not simply reflect exportable surplus but he weak purchasing power
occasioned by harsh economic conditions created for consumes by
Structural/Adjusted Programme.
EXPORT PROMOTION POLICIES AND STRATEGIES
Before Nigeria became independent some measures aimed at
coordinating export activities of the country to meet the demand of the
overseas. Consumer had been introduced by the then colonial masters,
the British Government. Nigerian exports were mainly raw materials
used in the industries of the metropolitan countries. The most prominent
among such measures was the establishment of market boards for
commodities. In 19467, the Nigeria Produce Marketing Company
(NPMC) was established to serve as the overseas selling agent for the
from main commodity boards, in the country at that time. The objective
of NPMC was the coordinate, ensures a steady supply of raw materials
(cocoa groundnuts, rubber and palm produce) to the British market and
ensures that British did not have any rival for such produce among the
other European Countries. In the post-independence era, and even up
till date, the institutions were either merely restructured or have retailed
the earlier structures with their objectives remaining almost the same.
The marketing boards arrangement was subsequently abolished and
43
substituted with trade liberalization policy, an important element of the
Structural/Adjustment Programme (SAP).
Since the country opted for economic reforms, the need to
diversify the export base and switch from previously existing import
substitution policy to export oriented growth strategy, has necessitated
the adoption of a number of policy measure that seek, not only boost
export earnings, but also to take advantage of the other numerous
benefits of export trade.
ii. PROVISION OF EXPORT AND INSURANCE FACILITIES
Until very recently, very few countries in the sub-region had any
specialized financial institutions to oversee the financial aspect of export
promotion. Export-import banks selected banks or in some cases, the
Central Bank, were the main platforms for providing loans for export
financing activities of the marketing boards. In Nigeria, the Central Bank
of Nigeria was statutorily empowered to undertake direct financing to
produce marketing in Nigeria. However, with the abolition of marketing
boards and the establishment of the NEXIM Bank, private exporters
were expected to seek financial assistance for their export activities
form the newly established bank. NEXIM was established by Decree 38
of 1991, to provide finance, risk mitigating fatalities, trade information as
well as advisory services in support of export to the Nigerian export-
44
import community. The credit facilities include rediscounting and
refinancing facility (RRF) input facility (FIF) and stocking facility (SF).
The RRF is a short-term trade finance facility designed to support the
marketing of export commodities while the FIF is a medium term project
finance facility developed to support value-added productive activate is
through the provision of foreign exchange facility for the procurement of
essential foreign input. The SF, another short-term facility is meant to
assist manufacturing export to stock sufficient quantities of seasonal
local raw materials in order to keep their operational option level.
11. FISCAL FINANCIAL INCENTIVES
Nigeria has made extensive use of fiscal and financial incentives to
encourage both local and foreign investors to produce for export,
particularly since the adoption of the structural adjustment programme.
These incentives include:
a. Foreign Exchange Retention Scheme: Under this
arrangement exports are allowed to retain a certain
percentage of export proceeds in foreign currency for use in
any eligible transaction. In Nigeria, unit January 1994,
exporters were allowed to keep 100 percent of export
proceeds in their domiciliary accounts.
45
b. Deductive/Waiver of Duty Imported Input and Export:
Incentives ranging from low duty drawback schemes were
adopted to minimize the cost of production of goods meant
for export. In Nigeria, duty drawback schemes have been put
in place whereby the duty paid on imported input for export
activities are refundable.
c. Pioneer Status/Tax Incentives: In order to encourage
production for export especially of non-traditional
manufactured goods, tax incentives and pioneer status due
granted producers for exports.
d. Export Expansion Grant/Export Adjustment Scheme: In
Nigeria, Export Expansion grants are awarded for exporters
who export a minimum of 500,000 worth of goods while
subsidies are provided for products with high cost of
production in order to make the price of the product more
competitive. In some countries exporters who increase their
earnings form year to year could be granted bonus foreign
exchange allocation equivalent to 30 percent of the increase
in their exports.
e. Capital Assets Depreciation Allocation/Tax Relief on
Interest Income: In Nigeria, a grant of 5 percent additional
annual depreciation allowance on plant and machinery is
46
given to any exporter who exports at last 50 of its annual
turnover, while tax relief on interest income accruing to
banks from loans granted for export operations is given to
such banks. Other financial incentives are; foreign input
facility, credit guarantee facility, credit insurance facility,
currency retention scheme, export development find, duty
drawback scheme, duty suspension scheme, pioneer status,
tax relief on interest incomes, export price adjustment
scheme, export liberalization measures, buy-back
arrangement, export processing zones.
2.7 CONSTRAINTS OF EXPORT GROWTH
a. Existing tradable goods and poor performance of traditional
exports Nigeria relies on a few traditional exports, mainly
agricultural produce and minerals, apart from crude
petroleum, which the country started to export in 1988. In the
whole of sub-Sharan African, it is only in about seven
countries that the share of top two product exports
accounted for less than 50 percent of total export value in
47
1988. In most others, the share of the two top export of
products, which are mainly primary produce or minerals,
average, 80 percent of total export, related to this is the
downward trend noticed in some traditional exports,
reflecting either the growing domestic demand for the
product or unfavoruable domestic policy. For example, from
1973-1975 and 1985 – 1987, the average yearly volume of
coffee exports feel by 18 percent while exports of palm oil
and timber fell by 28 and 35 percent respectively. Among
minerals, export of copper and phosphate fell by 14 percent
each. Factors such as over-valuation of domestic currencies,
which makes export less competitive, sharp declines in real
producer prices, and natural disasters, such was drought,
have contributed to the poor export performance of many of
these countries. In Nigeria, groundnuts wand palm produce
have virtually disappeared from the export list.
b. Constraints of Agricultural and Mineral Export: The problem
affecting agricultural production include high cost and
scarcity of farm labour inadequate and irregular supply of
inputs, inadequate extension services and transportation,
absence of basic infrastructures, rigidities in the production
48
process, inadequate financing, and low income elasticity of
agricultural products. All these have discouraged production
and therefore, resulted in lowest production of agricultural
produce respectively.
African manufactures are presented with two strategies
dictated by market requirements.
1. To produce high volumes of consistent quality cost
2. To produce low volumes for high – income retailers.
Long-term competitiveness depends on a producer’s
ability to achieve a balance in terms of the cost,
quality, output, and design capabilities required by
retailers. The following difficulties are encountered in
meeting a high-volume strategy.
• Mismatch in scale and technical competence of
African exporters
• In ability of exporters to negotiate a realistic
price.
• Lack of information about financial institutions
and instruments in international trade.
• Differences in the business culture
• Inexperienced intermediaries.
49
The greatest impediments in growth of non-oil export products
sector are the difficulty in organizing many remote small producers, the
need to provide working capital. The macroeconomic environment in
many African countries has to be reformed. Most potential exporters in
sub-Saharan African are unprepared for the demanding and highly
discriminatory nature of the agricultural market.
several study reports have attempted to identify the problems and
constraint of the manufacturing sector. Recently macroeconomic
administrator have taken keen interest in the health of the real sector.
Some of the factors identified includes low factor productivity growth,
poor industrial policy formulation, excess capacity, high production costs,
imported-input intensive processes, real exchange rate misalignments
and other forms of distortions that the government was reacting to the
illusion that the economics structural program was to have ameliorated
the imbalances in the system within even the shorter period of fifteen
months that they had forecast for its implementation.
Other constraints on manufacturers include inadequate export
incentives, such as export financing facilities, inadequate information
about export potential and lack of initiatives on the part of potential
exporters. When the need to reverse the policy option became obvious,
many of these countries found it difficult to restructure and re-orientate
50
the existing import substituting industries to produce for export.
Moreover, many of the industries are subsidiaries to the parent
companies abroad and are naturally expected to cater for local demand
and compete with parent bodies in other market.
2.8 GENERAL PROBLEMS OF NON-OIL EXPORT SECTOR
a. Inadequate and decaying infrastructures
b. Funding/financing constraints
c. Inefficient implementation of export incentives and support
programmes
d. Inadequate funding
The inadequacy of funding both in Nigeria and foreign currency to
meet the challenges of an expanding the export culture, is causing a
major set back for the full realization NEXIM’s potentials.
e. Near-total reliance of Bank on NEXM of Export finance
resources.
f. Over regulation of the non-oil export sector.
g. Underdeveloped regional and sub-regional markets.
51
h. Policy instability
i. Capital flight marketing and pricing problems.
a. Marketing Constraints: constraints to the marketing of
Nigeria’s agricultural produce are closely related to the issue
of poor infrastructure and inefficient marketing arrangement.
The small-scale farmer has poor market arrangement for his
farm produce due to largely poor infrastructure, poor
communication network and low access to logistic and inputs
support. The absence of rural feeder roads greatly inhibits
produce evacuation from collection points and adds huge
transportation costs. Lack of warehouse and other forms of
storage facilities result in hung post harvest losses which for
the small scale farmers are conservatively estimated at
between 20-40 percent of total output for tree crops and as a
high as 80 percent for fruits and other perishables. These
losses are among the highest in the world. The situation is
further worsened by the use of antiquated method in the farm
cleaning, storage, drying and transportation. The absence of
this basic infrastructure for transportation and storage create
a very huge marketing costs, which deny farmers and
produce merchants substantial share of their profit margin.
52
The absence of well organized marketing arrangement for the
country’s agricultural produce. The defunct marketing Board
provided convergent points for the sale, price moderation
and standardization of the country’s commodity exports. The
abolition of the marketing aboard on the heels of liberal
economic reforms of SAP create a vacuum in organized
produce marketing.
b. Pricing Problem: Farmers income, measured in term of
receipts sales or earnings from the business of farming
depends on the costs of farm input and yields on one hand.
Satisfactory farm income reflects prosperity in the farming
sub-sector. This also encourages further investment
especially in improved technology and related activities. It
has been observed that average yields have not improved in
the last ten years or so and in some declines were recorded
because of failure to get inputs in time.
However, the researcher will use the study to identify and
evaluate the problems of non-oil export products of Nigeria.
53
CHAPTER THREE
RESEARCH METHODOLOGY
3.1. SOURCES OF DATA
Data used in this study came from two courses, which are primary
and secondary data.
3.2. PRIMARY DATA
Primary data are in the form as generated from questionnaires and
interview of the officials of Nigeria Export Promotion Council (NEPC) and
Enugu Chamber of Industry Mines and Agriculture respectively.
3.2. SECONDARY DATA
Secondary data used came from publication of the Federal
Office of statistics (FOS). Central Bank of Nigeria (CBN)
textbooks, journals, magazines, seminar papers, and other
published and unpublished materials.
3.3. SAMPLING PLAN
The most direct way to estimate the problems and prospects of
marketing non-oil export products of Nigeria is to survey the businesses
involved in export marketing as well as manufacturing.
54
The primary objective in determining the sources of the
primary data was to use a sample that resembled the pool of
the exporters.
3.4 DETERMINTAION OF THE SAMPLE SIZE:
It was noticed that impediments arose in trying to reach the entire
Population. Due to these shortfalls, a sample of the population was
resorted to which will be a good representation of the whole population.
The sample size consists of random selection of the two cities and the
size was determined via the adoption of the following formula.
N =(Z)2 P x (I –P)
E
WHERE
N = the size of the sample
Z = standard score corresponding to givens confidence level.
E = the proportion of sample error in a given situation
P = the estimated proportion or incidence of eases in the
population
55
SOURCE:
Leedey, Paul D. Practical Research: Planning and Design
(New York, Macmillan 1980) P. 116 quoted in Ikeagwu E.K Groundwork
of resrarch method and Procedure 1996 P. 153
For the purpose of this study.
Z = 95% = 0.95 at “t” = 1.96
E = 5% = 0.05
P = 93% = 0.95
(I –P) or Q = 7% = 0.07
Thus N = (Z)2 (P –P2) +4
= (1.96)2 (93-(0.93)2
0.05
153.64 x 0.0651 = 100.35
N = 101 Approximate + 4 105
3.5 TECHNIQUE FOR COLLECTION OF DATA
56
The researcher adopted various techniques in the collection of the
data.
i) QUESTIONNAIRE: Questionnaire method was used to
bring out the necessary answer to the structured questions.
The researcher adopted this to highlight in detail the problem
and prospects of contained non-oil export products of
Nigeria. The questionnaire options amongst the available
options of “Yes”, “No”, “Indifferent” and no idea.
ii) ORAL INTERVIEW: Interview was administered discretely
to the management of the case organization to ascertain
immediate responses to the questions.
3.6 METHOD OF DATA ANALYSIS:
The researcher made use of tables in presenting the data received
and collected from the respondents. The tables were further explained
using percentage analysis where applicable. The Chi-square formula
was adopted in final analysis of the data and testing of the hypothesis.
The Chi-square test is used in causal comparative studies comparison
between observed and theoretical frequencies, and in an analyzing data
that are expressed as frequencies. The chi-square formula is given as
57
X2 = E(Oi.(i)2
Ei
WHERE
X2 = Chi-square
V = Degree of freedom as (number of row -1) x number of
column).
X = Level of significant
O = Observed frequency of the responses to each alternative
option in any specific question.
E = Expected frequency of responses calculated as follows
Row Total x Column Total
Grant Total
SOURCE: Lucey T, (1992) quantitative techniques London Dpp.
Publications. P 75
58
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
The problem under study is an empirical study of the problem and
prospects of marketing Nigeria’s non-oil export products. The data
generated from the questionnaire administered on respondents in the
selected towns of Enugu, Nsukka will be analysis in this chapter. In
analyzing these data, tables and some statistical tools will be adopted.
This chapter also shows the test if hypotheses.
TABLE 4.1
QUESTIONNAIRE DSITRIBUTION AND RATE OF RETURN
Option Enugu Nsukka Total %
Completed 57 28 85 80.15
Not returned 3 17 20 19.05
Total Distribution 60 45 105 1000
Table 4.1 shows that a total of 102 questionnaires were distributed
which represents the sample size. It was distributed at the ration of
60:45 Enugu Nsukka respectively. At Enugu, 57 copies of the
59
questionnaire were returned completed which represented 95%.
Represented 62%. At total of 85 copies were completed and returned
representing 80.95%. this 80.95% is considered adequate for the
research work. The analysis will now be fully based on the 85 copies of
the returned questionnaire.
TABLE 4.2
Types of products exported arranged according to the SITC grouping
Option Enugu Nsukka Total %
Food and Livestock 20 10 30 35.29
Animal, Vegetable oil
& fats
25 12 37 43.52
Manufactured goods 10 4 14 16.47
Total 57 28 85 100
Table 4.2 shows that 35.08% and 37.71% of respondents representing
Enugu and Nsukka believe that the source comes from food and
livestock, 43.85% and 42.85% responded to crude oil, 17.54% and
14.28% responded animal, vegetable oil and fats, while 3.50% and
7.14% responded to manufactured goods respectively.
4.3 SOURCES OF MARKET INFORMATION
Option Enugu Nsukka Total %
60
Newspaper &
Magazine
20 15 52 41.17
Trade fair &
exhibition
14 8 22 25.88
Nigeria export
council
8 4 12 14.11
Chamber of
commerce
5 1 6 7.05
Internet 5 5 10 11.76
Total 52 33 85 100
Table 4.3 shows that 38.42% representing Enugu and Nsukka
respectively believe that the source of market information comes from
newspaper and magazines. 26.77% and 13.46% believe that the source
is from trade fair and exhibition, 13.46% and 7.68 responded to Nsukka
export council, while 9.62% and 9.62% also believe that is comes from
chamber of commerce respectively.
TABLE 4.4
AREA WITH HIGHEST EXPORT PROSPECTS
Option Enugu Nsukka Total %
Manufactured 10 5 15 17.64
61
Mineral 25 10 35 14.17
Hyde and skin 15 10 25 19.41
Total 57 28 85 100
Table 4.4 shows that 17.85% representing Enugu and Nsukka believe
that area with the highest export prospects is from manufactured
goods,43.85% and 35.71% responded to mineral products, 12.28% and
10.71% responded to timber while 26.31% and 35.71% responded to
Hyde and skin respectively.
Table 4.5
Agencies that promote non-oil export products.
Option Enugu Nsukka Total %
Government 25 10 35 41.17
NGO 15 5 37 23.25
International
agencies
10 8 18 21.17
Others 7 5 12 14.11
Total 57 28 85 100
Table 4.5 show that 43.85% and 35.71% of the respondent representing
Enugu and Nsukka believe that government promote non-oil export
products, 16.31% and 17.85% responded to non governmental
62
organization, 17.54% and 28.57% responded to international agencies
while 12.28% and 17.85% responded to others respectively.
Table 4.2 shows that the greatest number of respondents is from group
one which is the group for food, and live animals . all agricultural
products are included here, they represent about 30 percent followed by
crude minerals and excluding fuel which represent 13.8 percent of the
respondents. A significant percentage of 13.8 of the respondents come
from the manufacturing sector respectively.
TABLE 4.3
PROPORTION OF OPERATING COST
Cost No of Respondents Percentage
Production 22 42.26
Overhead 12 23.03
Sales promotion 5 9.62
Advertisement 10 19.23
Export market
research
2 3.8
Others 1 1.9
Total 52 100
63
Table 4.3 shows that 22 of the respondents or 46% believes that
operating cost goes to production, 12 respondents or 21% responded to
overhead cost. As little of 2 respondents or 4% responded to market.
Option Enugu Nsukka Total
Yes 30 30 50
No 20 5 25
Indifferent 7 3 10
Total 57 28 85
Row = Column 2
V = (R-1) (C-1) = (2-1) =1
1 degree of freedom at 0.05 significant level
X2 1, 0.05 = 3.841
DECISION
Reject Ho, if calculated X2 is greater than the critical X2 of 3.841.
Otherwise do not reject.
EXPECTED FREQUENCY
Σ of 30 = 50 X 57 = 33.52
85
Σ of 20 = 28 X 50 = 16.47
64
85
Σ of 20 = 57 X 25 = 16.76
85
Σ of 5 = 28 X 25 = 8.23
85
Σ of 7 = 57 X 10 = 6.70
85
Σ of 3 = 28 x 10 = 3.29
85
CONTINGENCY TABLE
0 Σ 0 – Σ (0 – Σ)2 (0 – Σ)2/ Σ
30 33.52 -3.52 12.39 0.3696
20 16.47 3.53 12.46 0.7562
20 16.76 3.24 10.49 0.6258
5 8.23 -3.23 10.43 1.2673
7 6.73 0.27 0.07 0.0104
3 3.29 -0.29 0.08 0.0243
X2 4.0432
65
DECISION
Since the calculated X2 of 4.0432 is greater than the critical value X2 of
3.841, the Null hypothesis Ho, which states that there is not enough
information available to exporters about the existence of market for their
product is rejected, while the Alternative hypothesis H1, which states
that there is enough information available to exporters about the
existence of market for their product is accepted.
HYPOTHESIS II
HO Cost of production does not affect the international
competitiveness of Nigeria’s export product.
H1 High cost of production affects the international competitiveness of
Nigeria’s export products.
Row = 2 Column = 2
V = (2-1) (2-1)
1 degree of freedom at 0.05 level of significant.
X2 1, 0.05 = 3.841
66
Decision Reject Ho, if the calculated X2 is greater than critical X2 of
3.841. otherwise do not reject.
Option Enugu Nsukka Total
Yes 28 15 43
No 20 10 30
Indifferent 9 3 12
Total 57 28 85
EXPECTED FREQUENCY
Σ of 28 = 57 X 43 = 28.83
85
Σ of 15 = 28 X 43 = 14.16
85
Σ of 20 = 57 X 30 = 20.11
85
Σ of 10 = 28 X 30 = 9.88
85
Σ of 9 = 57 X 12 = 8.04
85
Σ of 3 = 28 x 12 = 3.95
67
85
CONTINGENCY TABLE
0 Σ 0 – Σ (0 – Σ)2 (0 – Σ)2/ Σ
28 28.83 -0.83 0.69 0.0238
15 14.16 0.70 0.49 0.0351
20 20.11 -0.11 0.01 0.0006
10 9.88 0.12 0.01 0.0014
9 8.04 0.96 0.92 0.1146
3 3.95 -0.95 0.90 0.2284
X2 6.4039
DECISION
Since the calculated X2 of 4.0432 is greater than the critical value X2 of
3.841, the Null hypothesis Ho, which states that high cost of production
does not affect the international competitiveness of Nigeria export
product is rejected, while the Alternative hypothesis H1, which states
that high cost of production affect the international competitiveness of
Nigeria export product is accept.
68
HYPOTHESIS III
HO The export incentive are not effective in the marketing of non-oil
export products.
H1 The export incentive are effective in the marketing of oil non-oil
export products.
Option Enugu Nsukka Total
Yes 40 13 53
No 17 15 32
Total 57 28 85
Row = Column
V = (R-1) (C-1) = (2-1) = 1
1 degree of freedom at 0.05 level of significant level.
X2 1, 0.05 = 3.841
DECISION
Reject Ho, if calculated X2 is greater than critical X2 of 3.841. otherwise
do not reject.
EXPECTED FREQUENCY
Σ of 40 = 57 X 53 = 35.54
69
85
Σ of 13 = 28 X 53 = 17.45
85
Σ of 17 = 57 X 32 = 21.45
85
Σ of 15 = 28 X 32 = 10.54
85
CONTINGENCY TABLE
0 Σ 0 – Σ (0 – Σ)2 (0 – Σ)2/ Σ
40 35.54 4.46 19.89 0.5596
13 17.45 -4.45 19.80 1.1348
17 21.45 -4.45 19.80 0.9232
15 10.54 4.46 19.89 1.8872
3. 17 X 45 = 34.06
52
4. 17 X 9 = 2.94
52
5. 14 X 43 = 11.58
52
70
7. 14 X 9 = 2.42
52
CONTINGENCY TABLE
Cell 0 Σ 0 – Σ (0 – Σ)2 (0 – Σ)2
Σ
1 17 17.37 -0.37 0.1349 7.881
2 4 3.63 1.63 2.6569 0.7319
3 15 14.06 1.06 1.1236 0.0799
4 2 2.94 -0.94 0.8836 0.3005
5 11 11.58 -0.58 0.3364 0.291
6 3 2.42 1.42 2.0164 0.8332
X2 9.8556
Critical value
Degree of freedom = (2-1) (1-1)
= (2-1) (3-1)
Σ of 14 = 28 X 49 = 16.14
85
71
Σ of 15 = 57 X 25 = 16.76
85
Σ of 10 = 28 X 25 = 8.23
85
Σ of 7 = 57 X 11 = 7.37
85
Σ of 4 = 28 X 11 = 3.62
85
CONTINGENCY TABLE
0 Σ 0 – Σ (0 – Σ)2 (0 – Σ)2
Σ
35 32.85 2.15 4.62 0.1407
14 16.14 -2.14 4.58 0.2837
15 16.76 -1.76 3.09 0.1848
10 8.23 1.77 3.13 0.3806
7 7.37 -0.37 0.13 0.0185
4 3.62 0.38 0.14 0.0398
X2 5.0481
72
DECISION:
Since the calculated X2 of 5.0481 is greater than the critical X2 of 3.841,
the null hypothesis Ho, which states that the low quality of Nigeria
product does not affect it exports market performance is rejected, while
the alternative hypothesis H1, which states that the low quality of Nigeria
product affects its exports market performance is accepted.
HYPOTHESIS V
HO: reduced levels of new investments in discovered mineral deposit
does not affect their marketing.
H1: Reduced level of new investment in discovered minerals deposits
affect their marketing.
RESPONSES ENUGU NSUKKA TOTAL
Yes 39 18 57
No 12 8 20
Indifferent 6 2 8
Total 57 28 85
DECISION
73
Reject Ho, if calculated X2 is greater than critical x2 of 3.841. otherwise
do not reject.
EXPECTED FREQUENCY:
Σ of 39 = 57 X 57 = 38.22
85
Σ of 18 = 28 X 57 = 18.77
85
Σ of 12 = 57 X 20 = 13.41
85
Σ of 8 = 28 X 20 = 6.58
85
Σ of 6 = 57 X 8 = 5.36
85
Σ of 2 = 28 X 8 = 2.63
85
CONTINGENCY TABLE
74
0 Σ 0 – Σ (0 – Σ)2 (0 – Σ)2/ Σ
39 38.22 0.78 0.61 0.0159
18 18.77 --0.77 0.59 0.0315
12 13.41 -1.41 1.98 0.1482
8 6.58 1.42 2.01 0.3064
6 5.36 0.64 0.40 6.0764
2 2.63 0.63 0.39 0.1509
X2 6.7608
DECISION
Since the calculated X2 of 6.7608 is greater than critical value of
x2 of 3.841, the Null hypothesis Ho, which states that Reduced Level of
new investment in discovered mineral deposits affect their
DECISION RULE
Since the calculated value of X2 (33.44) is greater than the table
value of 9.488, the null hypothesis which states that high cost of
production does not affect the international competitiveness of Nigerian’s
export products is rejected while the alternative hypothesis which states
that high costs of production affects the international competitiveness of
Nigerian’s export product is hereby accepted.
75
HYPOTHESIS III
H0: The export incentive are not effective in the marketing of non-oil
export products.
HI: The export incentive are effective in the marketing of oil non-oil
export products.
In testing this hypothesis, responses to related question as indicated in
questionnaire attached to the appendix was adopted.
Respondents Yes N0 Total
Enugu 15 (cell 1) 4 (cell 2) 21
Nsukka 10 (cell 3) 5 (cell 2) 17
Agwu 3 (cell 5) 5 (cell 4) 14
TOTAL 28 14 15
Calculation of expected frequencies
Formula = Column total Row total
Grand total
1. 28 x 21 = 11.31
76
52
2. 28 x 17 = 9.15
52
3. 28 x 14 = 7.54
52
4. 14 x 21 = 5.65
52
5. 14 x 17 = 4.58
52
6. 14 x 14 = 3.77
52
7. 10 x 21 = 4.04
52
8. 10 x 17 = 3.27
52
9. 10 x 14 = 2.70
52
77
CONTINGENCY TABLE
CELL 0 Σ 0-Σ (0-Σ)2 (0-Σ)2
Σ
1 15 11.31 3.69 13.616 1.2039
2 4 9.15 5.15 26.523 2.8986
3 2 7.54 5.54 30.692 4.0750
4 10 5.65 4.35 18.923 3.3491
5 5 4.56 0.42 0.176 0.0385
6 2 3.77 -1.77 3.133 0.8310
7 3 4.04 -1.04 1.082 0.2077
8 5 3.27 1.73 3.00 0.9174
9 6 3.70 3.0 10.89 4.0333
X2 17.62
Critical value
Degree of freedom = (v-1) (v-1)
= (3-1) (3-1)
78
= 2 x 2 = 4
DECISION RULE
Since the calculated value of X2 (17.62) is greater than the table
value of 9.488, the null hypothesis which states that the export
incentives are not effective in the marketing of non-oil export products is
hereby rejected while the alternative hypothesis which states that export
incentives are effective in the marketing of non-oil export products is
accepted.
HYPOTHESIS IV
H0: The low quality of Nigeria product does not affect its export market
performance.
H1: The low quality of Nigeria product affects its export market
performance.
Respondents Yes N0 Total
Enugu 17 (cell 1) 2 (cell 2) 21
Nsukka 9 (cell 3) 7 (cell 4) 17
Agwu 2 (cell 5) 5 (cell 6) 14
79
TOTAL 28 14 52
Calculation of expected frequencies
Formula = Column x Row total
Grand total
1. 28 x 21 = 11.31
52
2. 28 x 17 = 9.15
52
3. 28 x 14 = 7.54
52
4. 14 x 21 = 5.65
52
5. 14 x 17 = 4.58
52
6. 14 x 14 = 3.77
52
7. 9 x 21 = 3.63
80
52
8. 9 x 17 = 2.94
52
9. 9 x 14 = 2.42
52
CONTINGENCY TABLE
CELL 0 Σ 0-Σ (0-Σ)2 (0-Σ)2
Σ
1 17 11.31 5.69 32.376 2.863
2 2 9.15 -7.15 51.123 5.587
3 2 7.54 5.54 30.692 4.071
4 9 5.65 3.75 11.223 1.986
5 7 4.56 2.44 5.954 1.306
6 1 3.77 -2.77 7.673 2.035
7 2 4.04 -2.04 4.162 1.030
8 5 3.27 1.73 2.993 0.915
9 7 3.70 3.30 10.89 2.943
X2 22.74
Critical value
81
Degree of freedom = (v-1) (v-1)
= (3-1) (3-1)
= 2 x 2 = 4
At 4 degree and 0.05 level of significance the value of X2 = 9.488.
DECISION RULE
Since the calculated value of X2 (22.74) is greater that the table
value of 9.488, the null hypothesis which states that the low quality of
Nigerian product does not affect its export market performance is
rejected, while the alternative hypothesis which states that the low
quality of Nigerian product affects its export market is hereby accepted.
HYPOTHESIS V
H0: Reduced levels of new investments in discovered mineral deposit
does not affect their marketing.
HI: Reduced level of new investment in discovered minerals deposits
affect their marketing.
In testing this hypothesis responses to related question as indicated in
the questionnaire attached to the appendix was adopted
Respondents Low High Total
82
Enugu 17 (cell 1) 4 (cell 2) 21
Nsukka 15 (cell 3) 2 (cell 4) 17
Awgu 11 (cell 5) 3 (cell 6) 14
Total 43 9 52
Calculation of expected frequencies
Formula = Column Total x Row Total
Grand Total
1. 21 x 43 = 17.37
52
2. 21 x 9 = 3.63
52
3. 17 x 43 = 34.06
52
4. 17 x 9 = 2.94
52
5. 14 x 43 = 11.58
52
6. 14 x 9 = 2.42
83
52
CONTIGENCY TABLE
CELL 0 Σ 0-Σ (0-Σ)2 (0-Σ)2
Σ
1 17 17.37 -0.37 0.1349 7.881
2 4 3.63 1.63 2.6509 0.7319
3 15 14.06 1.06 1.1236 0.0799
4 2 2.94 -0.94 0.8836 0.3005
5 11 11.58 -0.58 0.3364 -0.0291
6 3 2.42 1.42 2.0164 0.8332
X2 9.8556
Critical value
Degree of freedom = (2-1) (1-1)
= (2-1) (3-1)
= 1x2 = 2
At 2 degree of freedom and 0.05 level of significance the value of
X2 = 5.991
84
DECISION RULE
Since the calculated (x2 – value of 9.8556 is greater than the table
value of 5.911, we reject the null hypothesis which states that reduced
level of new investments in discovered mineral deposits does not affect
their marketing is rejected, while the alternative hypothesis which states
that, reduce level of new investments in discovered mineral deposits
affect their marketing is accepted .
HYPOTHESIS VI
Ho: Inappropriate pricing of agricultural export products does not affect
their international market performance.
H1: Inappropriate pricing of agricultural export products does not affect
their international market performance.
In testing the hypothesis, responses to related question as
indicated in the questionnaire attached to the appendix was adopted.
Respondents Premium Discount Normal Total
Akwa 5 (cell 1) 13 (cell 2) 3 (cell 3) 21
Enugu 2 (cell 4) 9 (cell 5) 6 (cell 6) 17
Aba 4 (cell 7) 5 (cell 8) 7 (cell 9) 16
85
Total 28 14 16 52
Calculation of expected frequencies
Formula = Column Total x Row Total
Grant Total
1. 11 x 21 = 4.42
52
2. 11 x 17 = 3.60
52
3. 11 x 16 = 3.38
52
4. 25 x 21 = 10.10
52
5. 25 x 17 = 8.17
52
6. 25 x 16 = 7.70
52
7. 16 x 21 = 6.46
52
86
8. 16 x 17 = 5.23
52
9. 16 x 16 = 4.92
52
CONTIGENCY TABLE
CELL 0 Σ 0-Σ (0-Σ)2 (0-Σ)2
Σ
1 5 4.42 0.58 0.3364 0.076
2 13 3.60 9.4 88.360 24.544
3 3 3.38 -0.38 0.014 0.043
4 2 10.10 -8.1 65.610 6.496
5 9 18.17 0.83 0.6889 0.0843
6 6 7.70 -1.70 2.89 0.375
7 4 6.46 -2.46 6.0516 0.937
8 5 5.23 -0.23 0.053 0.010
9 7 4.92 2.08 4.326 0.879
X2 33.444
Critical value
Degree of freedom = (R-1) (C-1)
= (3-1) (3-1)
87
= 2x2 = 4
At 4 degree and 0.05 level of significance the value of X2 =
9.488
DECISION RULE
Since the calculated value x2 – value of (33.44) is greater than the
table value of 9.488, the null hypothesis which states, inappropriate
pricing of Nigeria agricultural export production does not affect its
international market performance is rejected, while the alternative
hypothesis which states that inappropriate pricing of Nigeria’s
agricultural export products affects its international market performance
is hereby accepted.
88
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATION
5.1 SUMMARY OF FINDINGS
According to the research work conducted, the finding made by the
researcher includes the following:
a. High cost of production affects the international
competitiveness of Nigeria’s export products.
b. The Export incentive are affective in the marketing of non-oil
export products.
c. There is enough information available to exporters about the
existence of markets. For non-oil products.
d. The low quality of Nigerian exports affect its export market
performance .
e. The few exports recorded were destined towards such
economic blocks as Western Europe and Africa.
f. Over 70 percent of operating expenses go into production
while as little as 2 percent goes into export market research.
89
g. Newspapers, Magazine, International trade fair and
exhibitions, Nigerian export promotion council formed the
bulk of sources of information for export market.
h. Areas with highest export potentials are Agricultural
products.
i. Manufactured products have export potential in the west
African sub-region.
j. Manufactured products failed to compete favourably because
of non- development of the industries base of the country,
which has inadequate infrastructure.
k. Government agencies in the export sector finance export
promotion activities in the export sector could have been
performed better by consultants.
The government has started in a good way by establishing export
pricing zone (EP2) and try ports. It has even been recommended that
export villages should be established. In this regard, the agencies
involved in the export trade like the shippers council, the standard
organization of Nigeria, should be provided with the necessary work
environment to carryout their task.
90
5.2 CONCLUSION
In the absence of petroleum, Nigeria is an agricultural country and
the development of agro-based industries appears to be an appropriate
strategy for export expansion in the medium term. Its considerable
resources inland, water, agricultural manpower and skills offer promising
opportunities to diversify agricultural exports away from oil. The best
possibilities appear to be in expansion of industries that produce semi-
processed goods from the major export commodities of cocoa, palm
products, and natural rubber, since prospects of exporting the raw
materials seems gloomy, based on our analysis, marine products, fruits
and vegetables, and cattle and daily faming are other areas identified as
prospective product markets.
In addition to identifying export commodities, diversification of
agricultural production for export also involves transformation of supply
capabilities supported by proper research and extension services,
transport links from producing areas to processing or dispatch centres,
cold storage facilities and special marketing arrangements, for such a
diversified program to have an impact on export expansion. The
government’s foreign. Investment policy and package of incentives
though successful in attracting some investment needs a clearer
determination of government strategy in the medium term with regard to
91
the scope, role and responsibility of foreign participation. A foreign
investment protection Act or an establishment of export zone will act as
further stimulants to increased investment and trade. Nigeria can obtain
foreign collaboration and know-how to accelerate implementation of its
present strategy of augmenting export earnings through value-added
channels such as cocoa, and palm products. The provision of an
extended package of incentives to the local investors to match the
benefits granted to the foreign investors would also help to attract better
type of local investors.
Participation in international trade fairs, export training and trade
information collection and dissemination constitute three other majors
areas, where considerable promotional work is being carried out with
growing intensity. This needs to be further expanded in order make the
more effective trade promotion instruments to help export expansions.
For Africa to reverse it unfavourable export trends, this regime
must adopt appropriate trade and structural adjustment policies in order
to enhance its international competitiveness and capitalize on
opportunities in foreign market collier (1995) identified political and policy
uncertainty, a high risk environment and inadequate government
commitment to reforms as key factors in Africa marginalized taxes,
92
smuggling and false invoicing have negative effect on trade
performance.
Embracing of information technology promotion of export
incentives, cooperation with trade promotion agencies and ministries,
cooperation with international trade agencies and participation in
ECOWA export international trade exhibitions and adopting appropriate
macro economic policies and strategies to encourage and promote
export.
5.3 RECOMMENDATIONS
I. ADOPTION OF APPROPRIATE MACROECONOMIC
POLICIES
Macroeconomic policies especially those on exchange rates and
prices, should be worked out in such a way that export will be encourage
and promoted. Over valuation of currencies and high rates of inflation,
as well as lack of macroeconomic stability have always discouraged the
growth of export. When a currency is over-valued, exporters are not
encouraged, while an under-valued currency it self makes the cost of
importation of raw material inputs too high resulting in high products
prices. Similarly, a high domestic inflation rate fueled by an unbridled
93
level of deficit spending makes exports less competitive. These are the
conditions that have characterized the country’s economy over the past
20 years. With SAP, under which exchange rates adjustment is central in
turning around the economy, the success in the economic adjustment
effort platform for achieving the macro stability reforms will help in
eliminating inconsistencies in polices.
II. PROVISION OF EFFICIENT INFRATRUCTURE
FACILITIES.
The infrastructural facilities. Such as adequate and regular water
supply, power supply, road network and have all worked against
industrial development in the country. The need to self-acquire and put
in place some of these facilities has raised the production of many
industries, thus making their products less competitive in the export
market.
iii. SOCIO-POLITICAL STABILITY
the need for a peaceful industrial and political climate is crucial to
export development in the context of overall economic development.
Inspite of recent improvements, Nigeria is still characterized by high
social and political instability. Industrial harmony is not while incidence of
insecurity of life and property is a matter of concern. These trades have
94
to be reversed for any meaningful export growth and development to be
achieved.
iv. THE NEED FOR EFFICIENT EXPORT INSPECTION.
In order to ensure high quality exports that can compete
favourable in the world market and also assure that export proceeds are
repatriated, specialized institutions should be established to supervise
the exportation of commodities, poor quality of exports can attract
sanctions against export countries, which may worsen the export
prospects. This was what happened in 1990 when Nigeria’s cocoa was
blacklisted because it was not well fermented before exported. With
efficient and function inspection institution in place, the problem of
standardization and quality would addressed.
v. NEED TO DIVERSIFY EXPORTS TOWARDS FASTER
GROWING MARKETS.
Given the prospects and difficulties encountered by Nigerian
export trying to break into the Western European and the American
Markets, in the years ahead, the country should refocus and redirect
her activities to other segments of the globe. The country should break-
up explore higher global market share in the faster-growing market of the
transit on economics of Eastern Europe and the South-East Asian
95
countries. Currently, the value of trade with these countries represent a
small fraction of the country’s total trade with the out side world, and the
relationship has remained lopsided against Nigeria. The country’s export
is negligible in all cases, whereas the import of Nigeria from these
countries growing rapidly. There is so much potential that Nigeria could
explore from such markets and those developing of countries, such as
ECOWAS, the Caribean as well as Asia and other countries of Africa.
These are areas were South-South relationship and cooperation,
currently being emphasized could be development to improve the
country export trade.
vi THE USE OF E-BUSINESS.
The advent of information technology has charged the rules of
business. in the present era, the importance of E-business and internet
as a tool to lower communication costs and reduce time to market goods
services.
Finally, having reviewed the policies and strategies that have been
adopted to boost and diversify exports of Nigeria in recent times. We
should also draw lessons from experiences of successful countries. We
have attempted to highlight the benefits of export-led development
strategies and the pre-condition for an effective export policy. Major
constraints to the success of export promotional policies were discussed.
96
Like other African countries, Nigeria still depends largely on one primary
produce for export, Crude Petroleum. Moreover, export of manufactures
have remained low and insignificant
Although, the policies put in place have recognized the need for
export promotion and diversification they are, however, yet to achieve
the desired level of success. Consequently, policies are being received
in the light of experiences to boost the level of exports and to achieve a
diversified export base especially in manufactures. Unfortunately, for
several reasons, which include shortage of capital and difficulties in the
restricting existing import- substitution industries to produce for export,
lack of appropriate and enabling results. When compared with pre SAP
Period, export volume and the overall trade – able goods have
increased, the increase in the value of exports over the years has,
however remained minimal due to the deterioration in the country’s
terms of trade.
Consequently, it is recommended that a number of policy
measures be adopted to make exports competitive and achieve
diversification into manufactures.
Equally, there is the urgent need to adopt appropriate
macroeconomic policies. Such policies should includes a consistent set
of tariff policies that would aid export development. The immediate
97
reactivate of NEXIM is desirable. The reactivation should involve the
reconstitution of the board to include private sector operations, the
ministry of commence and Central Bank of Nigeria. The Board should
be independent of all the organs of government. NEXIM should be
strengthened to provide pre and post shipment financing of exports,
similarly, the Nigeria Export promotion council should be reconstituted in
order to achieve or actualize its aims and objectives respectively.
The advent of information technology has charged the rules of
business. in the present era, the importance of E-Business and internet
as a tool to facilitate business activities is fast becoming an effective tool
to lower communication costs and reduce time to market goods and
service.
Finally, haring reviewed the policies and strategies that have been
adopted to boost and diversity exports of Nigeria in recent times. We
should also draw lessons from experiences of successful countries. We
have attempted to highlight the benefits of export-led development state
gin and the precondition for an effective export policy. Major constraints
to the success of export promotional policies were discussed. Like other
African countries, Nigeria still depends Largely on one primary produce
for export, Crude Petroleum. Moreover, export of manufactures have
remained low and insignificant.
98
Although, the policies put in place have recognized the weed for
export promotion and diversification they are, however, yet to achieve
the desired level of success. Consequently, policies are being received
in the light of experiences to boost the level of exports and to achieve a
diversified export base especially in manufactures. Unfortunately, for
several reasons, which include shortage of capital and difficulties in the
restricting existing import-substitution industries to produce for export,
lack of appropriate and enabling macro-economic policies the measures
are yet to yield. The expected results. When compared with pre SAP
period, export volume and the overall; trade – able goods has increased,
the increase in the value of exports over the years has, however
remained minimal due to the deterioration in the country’s terms of
trade.
Consequently, it is recommended that a number of policy
measures be adopted to make exports competitive and achieve
diversification into manufactures.
Equally, there is urgent need to adopt appropriate macroeconomic
policies. Such policies should includes a consistent set to tariff policies
that would aid export development. The immediate reactivate of NEXIM
is desirable. The reactivation should involve the reconstitution of the
board to include private sector operations, the ministry of commence and
99
Central Bank of Nigeria the Board should be independent of all the
organs of government. NEXIM should be strengthened to provide pre
and post shipment financing of exports, similarly, the Nigeria Export
promotion council should be reconstituted and restructures in order to
achieve or actualize its aims and objectives respectively.
100
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Department of Marketing
University of Nigeria
Enugu Campus.
March 10, 2006
Dear Sir/ Madam,
The undersigned a post-graduate study of the above-named
department and institution, is carrying out a study on the problems and
prospects of Marketing Non-Oil Export Products from Nigeria.
Kindly answer the question below. This exercise is purely for
academic use and any information supplied will be treated in strict
confidence.
Yours Sincerely
KANU IHUOMA
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SECTION A: GENEAL
1. Name of Organization …………………………………………............
2. Location …………………………………………………………………..
3. Year Export Commenced ………………………………………………
4. Export Product(s) Handle ………………………………………………
5. Sources of export products handle (please circle)
a) Direct Production
b) Procurement from other producers
c) Combination of (a) and (b)
6. Average number of export transactions/orders handle per annum
……………………………………………….
7. Would you normally have had more transactions/orders than
indicated in (6) above Yes No
8. If “yes” what are the constraints? Please List?
……..………………………………………………………………………
……………………………………………………………………………..
9. (i) Is your sale at premium, normal, or discount price? (please
underline as appropriate).
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ii) What reasons best explain your answer in 9(i)
SECTION B: MARKETING
1. What is the nature and source of your raw material?
…………………………………………………………………………..…
……………………………………………………………………………..
Are they readily available? Yes No
If “No” give reasons
…………………………………………………………………………..…
…………………………………………………………………………….
2. What is your position in the Company?
i) Manager, Executive or Above
ii) Supervisor, Officer or equivalent
3. Qualification Mix:
Professional e.g. Nigerian Institute of Marketing (NIMARK), etc
University Degree, HND or equivalent
Professional Diploma
OND, NCE, etc
4. Please give the proportion (%) of your operating costs that go into:
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Production
Overhead
Sales Promotion
Advertisement
Export Market Research
Any other
5. Which of these mediums do you use in sourcing markets for your
products
i) Newspaper and Magazine
ii) International Trade Fairs and exhibitions
iii) Nigeria Export Promotion Council (NEPC)
iv) Foreign Consults
v) Internet
vi) Nigeria Consulates
6. There is adequate market information available to the exporter
Yes No
7. Are you satisfied with markets available for your products?
Yes No
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8. Why do you say so?
…………………………………………………………………………..…
…………………………………………………………………………..…
……………………………………………………………………………
9. What is the image rating of Nigeria Businessmen by your
customers?
i) Low ii) High iii) Indifferent
10. If “Low” what is effect on your export sales?
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
11. Which of the following factor, in your view hinder Nigeria’s non-oil
export marketing?
(i) Non Implementation of major export incentives
(ii) Low product quality
(iii) High product price
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(iv) Lack of knowledge about the market
(v) Distrust of Nigeria Businessmen
(vi) poor product presentation and packaging
12. The low quality of Nigeria export products affects their international
Competitiveness
Yes NOs
13. High Cost of production affects international competitiveness of
Nigeria’s export products.
Yes No
14. Which export incentives have you benefited from?
……………………………………………………………………………………
……………………………………………………………………………………
……………………………………………………………………………………
…………………………………………………………………………………..
15. If you have not benefited from any, why?
……………………………………………………………………………………
…………………………………………………………………………………..
16. Export incentives are effective in boosting export market.
Yes No
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