Nigeria must diversify export to avoid falling into economic instability again — Sanwo-Olu

Governor of Lagos state, Mr Babajide Sanwo-Olu has opined that for Nigeria to avoid another economic instability, the country must diversify its exports.

The Governor made the points at Yaba College of Technology (YABATECH) in Yaba, Lagos, where he delivered the 36th Convocation Lecture with the theme: “Developing Exportable Alternatives for Nigeria’s Economic Recovery.”  

The occasion, shared by the Vice President, Senator Kashim Shettima, was graced by eminent Nigerians, academics, captains of industry, private sector leaders and students.

Shettima was represented by the Special Adviser to President Bola Ahmed Tinubu on Economic Affairs, Mr. Tope Fasua.

The Governor said decades of dependence on importation of finished goods and export of a single commodity had made foreign exchange the sole determinant of the nation’s economic stability, stressing that the same factor remained a fundamental contributor to the current economic situation.

Sanwo-Olu emphasised the need to harness export potential and develop non-oil commodities markets as the nation gradually makes its way into the phase of recovery. This, he said, will balance the shortfall in foreign exchange earnings.

Sanwo-Olu, in his paper, observed that the historic oil boom of the early 1970s met the country unprepared, noting that the sudden influx of petrodollars made the nation shift from exporting agricultural products, such as groundnut, cotton, cocoa and oil palm, to relying on food imports. This, he said, made Nigeria lose its potential to be one of the richest and most prosperous countries in the world.

To break the cycle of underperformance of non-oil alternatives, the Governor said the country must prioritise export growth in three key non-oil areas—agriculture, technology and creative arts. He said it was time for the nation to rise up and convert potential in these areas into reality.

He said, “As we gradually but steadily make our way into the phase of economic recovery, one of the most important things we can do as a people and a nation is to increase the focus on our export capacity and potential. The fundamental issue at the root of our lingering economic situation is the crisis of foreign exchange.

“This crisis takes two main forms. First is the monopoly of crude oil and gas on our foreign exchange earnings. Our over-dependence in this way has done far more harm than good to the economy, and to our mindsets as a people. The volatility of our foreign exchange earnings has had a negative impact on currency stability, while also complicating other problems, like inflation.

“It is clear that diversifying our export base from oil and gas is an urgent imperative for a country that is serious about growing its economy and lifting tens of millions of its people out of poverty. It has been urgent for decades. Yet somehow, we have carried on as if all has been well and as if we might somehow be able to magically achieve economic growth and prosperity without laying the right foundations.”

Sanwo-Olu said President Bola Tinubu assumed leadership at the most important moment in the nation’s journey when tough and difficult decisions needed to be taken to shift the country away from the route of economic underperformance to the path of productivity and prosperity.

The Governor said the Tinubu-led government had recorded significant progress in non-oil export, citing current data by the Nigerian Export Promotion Council (NEPC).

Sanwo-Olu, however, said the full value of the export market was far greater than what the nation was earning from it.

Cocoa beans, he said, accounted for 23.18 percent of the $2.7 billion earned in the first half of 2024 from exports, but the commodity, he added, was exported unprocessed. This, the Governor said, had shortchanged the country of the value derivable from the product.  

“There is no value or pride in exporting raw materials to the world. If we keep exporting them raw for other countries to process, they will reap the bulk of the value derivable from these products,” Sanwo-Olu said.

Beyond exporting processed agricultural products, the Governor said Afrobeats and Nollywood were among the biggest cultural exports out of Nigeria.  

He said local music had influenced and transformed the international creative market, earning local artists global recognitions, such as the Grammys. This, he said, was a testament to the scale of the attention coming to the local creative industry.

“We must highlight one of our fastest-growing and most promising export segments — our arts and creative industries,” he said.  

Sanwo-Olu, while addressing the graduating students, said YABATECH had built a reputation as a centre for innovation and creative excellence, charging the students to use their knowledge and skills to build a new export economy for the country.  

The Governor said Africa had been projected to be the primary source of the workforce that would drive the global economy in the 21st century. He pointed out that the State Government would continue to create platforms to train a workforce that would not only be a valuable source of foreign exchange but also one equipped with innovation and capacity to turn around the country’s economy.

He said: “As you leave these hallowed grounds, proceed audaciously with the mindset of value creators, and not just job seekers. Aspire to be the changemakers who will redefine Nigeria’s role on the global stage. Together, we can create a nation that no longer relies on raw material exports, but instead one that thrives on innovation, industrialisation, and shared prosperity.”

The institution’s Rector, Dr. Ibraheem Abdul, described Governor Sanwo-Olu’s paper as “thought-provoking,” saying the lecture resonated with the current effort of the Federal Government to fully harness alternatives to the oil market.  

The rector said the theme of the lecture was to bridge the gap between academic knowledge and real-world experience.