Forex stability boosts export revenue as unemployment weighs


The foreign exchange stabilisation policy of the Central Bank of Nigeria (CBN) may have started to yield positive results following the resurgence in export activities of listed firms on the Nigerian Stock Exchange (NSE) at half year 2018. The combined export revenues of the seven listed firm in our analysis rose to N5.98 billion at half year 2018 from N5 billion made by the same firms in comparable period in 2017. On the average, the seven firms collectively recorded 19 percent increase in their export revenues during the period.

When expressed as a percentage of the total revenue, their collective export revenues to total revenue stands at 2 percent in June 2018 compared with 1 percent in similar period in 2017.

Gross earnings from the domestic market marginally rose by 1.3 percent. The total revenue which comprises the export and domestic revenues of the seven firms remained almost flat at 2 percent as it rose from N381.16 billion in June 2017 to N387.06 billion in June 2018. This implies that most of the export oriented firms from Nigerian presently play at the fringes as the domestic revenue accounted for 98 percent in the first six months of 2018 which is about the 99 percent in similar period in 2017.

The improvement in the export activities gives stakeholders in the Nigerian economy the hope that Nigerian firms are beginning to benefit from the relative stability in the foreign exchange market. Among the firms that witnessed upward trend in their export revenues are Total Nigeria, Nestle Nigeria, Beta Glass and Cadbury Nigeria. On the other hand, Notore and Okomu Oil had their exports decline by 92 percent and 9 percent respectively during the period.

Total Nigeria sold N577.07 million worth of goods overseas in the first six months of 2018, an increase of 83 percent over N314.6 million goods it sold to its foreign buyers same period in 2017.  Nestle Nigeria made N1.61 billion from export compared with N884.8 million as at June 2017, representing an increase of 82 percent. Beta Glass’ N516.3 million export proceeds in the first six months of 2018 was 36 percent better than N380.95 million it made in corresponding period in 2017.

Cadbury Nigeria recorded the highest growth of 101 percent in export sales among the firms analysed as it made N2.69 billion in the first six months of 2018 compared with N1.34 billion in similar period in 2017.

“There is so much competition in Nigeria for Cadbury and this explains why it focuses on our West African neighbours. Poverty level in those countries is very high and Cadbury products are cheaper, these facts make its products easily affordable to individuals and institutions in West African sub region”, Fola Abimbola, analyst with CSL Stockbrokers, said.

“Nestle controls the beverages market in Nigeria, so Cadbury has to look elsewhere”, Abimbola said.

Between the two beverages giants, Nestle controls 90 percent of the domestic beverages market while 10 percent market share goes to Cadbury. On the contrary, Cadbury controls 63 percent of the export market share while Nestle controls 37 percent at half year.

The sluggish growth in the revenue made by these firms in the domestic market may be unconnected with the low purchasing power of consumers caused by high unemployment rates which presently stands at about 18.8 percent in the country.


Based on the data recently released by the National Bureau of Statistics (NBS), the sale of petroleum oils and oils obtained from bituminous minerals accounted for 83.54 percent of Nigeria’s exports. Cashew nuts accounted for 9.70 percent while sesame seeds as well as urea accounted for 0.44 percent and 0.25 percent respectively.

Similarly, naphthalene accounted for 0.21 percent; cigarettes containing tobacco, 0.17 percent; other lubricating oil, 0.24 percent, and leather further prepared after tanning accounted for 0.14 percent respectively.