Exploring Nigeria's Export Potential ( The Case Of Yobe State)

EXPLORING NIGERIA’S EXPORT POTENTIAL (THE CASE OF YOBE STATE)

The Preamble

Yobe state, home of solid minerals such as gypsum and kaolin, is rich in exportable products like gum Arabic, groundnuts, beans, cotton, etc., and is predominantly agricultural. The state is in the northeast geopolitical zone of Nigeria.

Yobe state, like other states in Nigeria, should consider export for several reasons some of which include overdependence on federal allocations, fostering creativity and innovation, boosting the GDP of the state to create a huge opportunity for SMEs to grow, decreasing dependence on domestic market, earning from export proceeds to generate revenue for the state, farming becomes more lucrative and it also gives the state global recognition because of market share, creation of job opportunities, slows down the migration from rural to urban areas.

Regardless of the issue of insecurity, poverty, unemployment, and other negative factors present in Yobe state like other states in Nigeria, it is important to look beyond the challenges and see the potential for growth and opportunities that can come from efficient and effective utilization of available resources.

Yobe State has opportunities in farming, mining, and the state’s population.

The Peculiarities

Yobe State was carved out of Borno State on August 27, 1991, by the regime of General Ibrahim Babangida. Its capital is Damaturu. Located in the northeastern region of Nigeria, Yobe State occupies 45,502 square kilometers. The state shares a border with Borno state in the east, Gombe state to the south, Bauchi and Jigawa states to the east, and Niger Republic to the north. The state is an agrarian state with deposits of several mineral resources making it a potential area in agribusiness and mining. The state is nicknamed the “Pride of Sahel”.

The state lies mainly in the dry savannah belt, so it is always hot and dry for most of the year except the southern part, which has a milder climate. The state is dominated by the Kanuri ethnic group and is an example of the endurance of traditional political institutions in some areas of Africa. In the state, the emirs of the former Kanem-Bornu empire have played a part in the politics of this area for nearly 1000 years.

With a total land mass of 46,609km2, Yobe has a population of 3,532,989 of which 1,801,824 are male and 1,731,164 are female. There are 17 LGAs in the state which are Bade, Bursari, Damaturu, Fika, Fune, Geidam, Gubja, Jakusko, Karasuwa, Machina, Nangere, Nguru, Potiskum, Tarmuwa, Yusufari and Yunusari with Damaturu as the state capital. The state has Sudan and Sahel vegetation and the major crops are Sorghum, Millet, Groundnuts, Cowpea, Maize, Sesame, Beef, Dairy, Livestock, Gum Arabic, and cotton. The solid minerals are Diatomite, Silica Sand, Gypsum, and Clay. In Yobe State, investment and opportunities exist in Agribusiness, Light manufacturing, Healthcare, Tourism, Energy and mining.

The competitive advantage of Yobe State is it has the largest cattle market in West Africa; huge deposits of limestone, gypsum, kaolin, trona, iron ore, diatomite, and silica sand; agricultural and livestock potential; tourism potential like Goya Valley- deepest gorgvalley in Nigeria, Dufuna canoe(over 8,000 years old), Bade Fishing Festival, Dagona Birds Sanctuary, Old Birnin Ngazargamo and Tulo-Tulowa Oasis. Investment opportunities also exist in Livestock, Maize, Gum Arabic, Millet, Groundnuts, Rice, Fishery, Tourism, cotton, and sesame.

In 2020, the unemployment rate was about 52.57% while about 21.55% were underemployed. With the opportunities available in Yobe state, the state can generate enough to solve its internal problem and also combat the issue of unemployment in the state if the resources available are well utilized.

?The Profile

In 2021, Yobe State recorded an IGR of N8.46bn and a federal allocation of N57.94bn. This means that Yobe State cannot survive without an allocation from the federal government which is the reason why the state must work towards tapping into the numerous resources available in the state. The state in 2021 had a domestic debt of about N82.46bn and a foreign debt of about $24.76m and the growth in the state’s debt has been increasing over the years. About 44.42% of the state’s revenue went to capital expenditure while the remaining 59.50% went to operating expenses. The IGR per capita of the state was N2156, capital expenditure per capita was N11320 and debt per capita was N23620.

According to the overall fiscal performance ranking of Yobe, the state with one of the largest cattle markets in West Africa worsened as it dropped from 34th to it 21st position it attained in 2021. Regardless, the state improved its IGR by 8.75% from N7.8bn in 2020 to N8.46bn in 2021. The state, not only generated the lowest IGR among the 36 states in 2021 but also has the 31st highest IGR growth year on year. Furthermore, 85% of the state’s IGR was realized from PAYE: The import of this is that the state needs to embark on far-reaching tax reforms to improve other forms of its tax revenue and non-tax revenue. Having ranked 24th on the ease of doing business in 2021, the state needs to improve on infrastructure and security and its regulatory environment to better the ease of doing business. Looking at the revenue structure of the state it was revealed that the state still relies significantly on federally distributed revenues to fund its budget. In the 2021 fiscal year, its gross FAAC made up 76.89% of its total revenue of N76.34bn.

In terms of prioritization, Yobe state needs to exploit the livestock sector which is worth over N30trn by partnering with the private sector, to develop modern methods for cattle rearing, whilst exploiting its wind and solar potential to irrigate the grazing fields. The state having faced years of civil unrest owing to the Boko haram menace, needs to ramp up investments in human capital development with health and education as entry points. The state ranked at the bottom states in health spending per capita and education spending per capita: The state’s spending per capita on health and education was N607.03 and N1293.76 respectively. Generally, the state increased its total expenditure by 32.84% from N88.42bn in 2020 to N117.46bn in 2021. More data shows that the state’s overhead cost grew by 56.33% year on year, while its personnel cost and capital expenditure grew by 9.92%and 19.52% respectively.

Yobe State’s total debt as of December 2021 was N92.69bn. The state grew its debt by 42.69% from N64.96bn in 2020, while its debt stock grew from N54.87bn in 2020 to N82.46bn in 2921, its external debt declined from $26.6mn in 2020 to $24.8mn in the same period. The state ranked the 29th most indebted state in Nigeria and the second least indebted state in the northeast region behind Gombe. Compared to other states, Yobe is ranked 19th on the debt sustainability index.

The Potential

Agriculture is the major occupation of the people of Yobe. It provides food and income for the people. Crops primarily produced include sorghum, millets, peanuts (groundnuts), cowpeas, corn (maize), sesame, and cotton. Cattle herding and farming are the chief occupations.

The state also has precious solid mineral deposits like diatomite, silica, sand, gypsum, and clay.

Farming and cattle rearing are the principal activities of the area’s predominantly Kanuri population. The state is a market center for sorghum, millet, groundnuts, cowpeas, maize, sesame, beef, gum Arabic, and cotton grown in the state.

?The Purchasers

When analyzing the global market size for the resources produced by Yobe State, it should be a thing of interest to the state to enlarge its production capacity to export each product. For example, the world import market size of Groundnut (which is one of its major cash crops) is about $3.19bn with China, Vietnam, Netherlands, Germany, Russia, United Kingdom, Poland, Mexico, and Canada as major purchasers. The import market share in Africa is about $171m with Algeria, South Africa, Tanzania, Libya, Tunisia, Morocco, and Rwanda as the major buyers.

The state also produces raw cotton, and the world market share of cotton import is $15.4b with China, Bangladesh, India, Turkey, Indonesia, Pakistan, Thailand, and Mexico as the major purchasers. The import market share in Africa is about $338m with Egypt, Mauritius, South Africa, Algeria, and Morocco as the major buyers.

Yobe state also produces Corn and the world import market share is $36.3b with Japan, South Korea, Mexico, Spain, Germany, Colombia, and Peru as major purchasers. In Africa, the import is about $3.73b with Egypt, Algeria, Morocco, Tunisia, South Africa, Kenya, and Senegal as the major buyers.

The state also produces Sesame seeds, and the world import market share is about 3.45b with China, Japan, Turkey, India, Germany, and Greece being the major purchasers. The import market share in Africa is about $167m with Egypt, Tunisia, Morocco, Togo, Algeria, and Ghana as the major buyers.

The state also produces Gum Arabic and the world market share is about $325m with France, the United Kingdom, Italy, Germany, India, Japan, the United States, and Mexico as the major purchasers. The import market share in Africa is about $13.1m with Eswatini, South Africa, Egypt, Algeria, and Morocco as major buyers. There are other markets like millet, and sorghum that Yobe can also explore for exports as well.

The Proposal

For Yobe State to experience tangible economic growth, there is a need to empower Small and Medium-scale Enterprises (SMEs). Given the commodities produced like Groundnuts which have an import market value of about $3.19b, the state can leverage the production of Peanuts by making SMEs oversee the entire process from production, primary processing and storage, secondary processing and packaging, marketing and sales, logistics, export and distribution. There might be certain challenges in the form of inefficient value chain operators, low processing capacity and output, few jobs created, low-quality packaging, high cost of production, and non-competitive products in the export market. With an alliance between large corporations and SMEs, these processes would be more efficient and there would be improvements in the efficient value of chain operators, high processing capacity and high output, good-quality packaging, increased job creation, etc.

To support exporters in this state to enter the export markets in Africa, Europe, and America in a secure and sustainable way, the state government should consider the following:

·?????? Partner with a representative at the destination market to meet and secure a contract.

·?????? Set up a warehouse(s) for pickup by both the wholesalers and retailers at the destination market.

·?????? Partner with an independent agent or distributor at the destination market.

·?????? Organise and sponsor manufacturers for exhibitions in the export market.

?The Profit

Given the vast arable land available in Yobe, if the state dedicates part of this to the cultivation of profitable agricultural produce, given all associated costs from the cost of farming, the profit of the farmer, the cost of export, multiplying this by the quantity produced and deciding on a fair selling price, the state government can realize a lot of revenue from the export of agriproducts. This means that the state can increase its IGR and fund more projects.

See how Yobe state can generate about N224b by exporting sesame seed Here

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