Page 1 of 31

Journal for Studies in Management and Planning

Available at

http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 8

August 2016

Available online:http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 164

Impact of Oil And Non-Oil Export on

Nigeria Economy

By

Ajayi Olaniyi Adewale

Department of Educational Foudation and Management.

Ekiti State University, Ado –Ekiti, Ekiti State, Nigeria

ABSTRACT

This paper examined the impact of oil and non-oil export on Nigerian economy.

It reviewed literature on the macroeconomic policy and the relative impact of

oil and non-oil export on the economy. It also reviewed the contribution of both

oil and non-oil export on Nigeria Gross Domestic Product over the years and

compared the contribution of both oil and non-oil export on Nigerian economy.

This was necessitated by the need to understand the contribution of both oil and

non-oil export on Nigerian economy. The study concluded that oil has greater

contribution to the economic growth of Nigeria due to the neglect of agriculture

since the beginning of oil boom.

Keywords: Agriculture, Economy, Macro-economic Policy, Non- Oil, Oil

1.0 INTRODUCTION

Prior to the oil boom in the 1970s,

Agriculture was the dominant sector

of the economy, contributing about

70% of the gross domestic product

(GDP) employing about the same

percentage of the working

population and accounting for about

90% of the foreign earnings and

federal government revenue. The

Page 2 of 31

Journal for Studies in Management and Planning

Available at

http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 8

August 2016

Available online:http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 165

early period of independence up till

mid 1970s saw a rapid growth of

industrial capacity and output, as the

contribution of the manufacturing

sector to GDP rose from 4.8% to

8.2%. The pattern changed when oil

suddenly became of strategic

importance to the world economy

through its supply-price trend.

A structural analysis of Nigeria’s

export shows that between 1960 and

1970 non-oil exports comprising

mainly of agricultural products

dominated total exports, accounting

on the average over 80% of total

export. However, from 1970

onwards, crude oil exports started to

exceed 50% of total export,

receiving a major boost during the

oil crisis of 1973-1974. Oil export

represented 96.1% of total export in

1980, for example, from 1992 to

1995, oil export has never gone

below 80% of total export while the

non-oil export had been within the

range of 3.9% to 2.0%, moreover

from 1996 up to 2006, the trend had

been the same, oil sector export

range on the average of about 90.0%

to 92.1% and non-oil export

maintained its range of about

5.05%. Recently in respect to the

economist intelligence unit briefing

it was stated that Nigeria’s non-oil

sector is performing strongly at the

rate of 8.5% in 2007 as a result of

various policies by the Nigerian

Government.

Table 1: Incentive scheme adopted to boost non-oil exports in Nigeria.

Incentive scheme Operation agent Objective and remark

1. Refinancing &

rediscounting

facility(RRF) and

Central bank of Nigeria

(CBN)

To provide liquidity to

banks in support of their

export finance business

Page 3 of 31

Journal for Studies in Management and Planning

Available at

http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 8

August 2016

Available online:http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 166

foreign input

facility

directed at export

promotions and

development.

2. Currency retention

scheme

CBN and the

commercial/merchant

bank.

To enable exporters to

hold export proceed in

foreign currency in their

banks.

3. Tax relief on export

earned by banks on

export credit

Banks and federal board

of inland revenue

To encourage banks to

hold export proceeds in

foreign currency in their

banks.

4. Export credit

garantee and

insurance

CBN/NEXIM Assists banks to bear the

risks in export business

& export financing &

export volumes.

Incentive scheme Operation agent Objective and remark

5. Duty drawback

scheme

Customs department

standard organization of

Nigeria, Nigeria export

promotion council,

(NEPC) commercial and

merchant banks and

CBN

To reimburse customs

duty paid by exporters on

imported input used for

export production. This

has not been widely used

by exporters due to the

cumbersome procedural

requirements involved,

although the fund has