By Admin
The Independent Media and Policy Initiative (IMPI) has described the recent performance of the non-oil sector of the economy as a true reflection of efforts by the President Bola Tinubu administration to diversify the economy.
In a policy statement signed by its chairman Dr Omoniyi Akinsiju, IMPI argued that the numbers show that ongoing economic policies are gradually weaning the country of its over-dependence on oil.
It said: “Impressively, exports of agricultural goods grew by 11 per cent quarter-on-quarter (QoQ) and 65 per cent year-on-year (YoY) to N1.7trn in Q1 ’2025. Consequently, agriculture’s share of total exports increased to 8.3 per cent, up from 7.7 per cent in the previous quarter. In contrast, on the import side, the total value of agricultural goods declined by -5 per cent QoQ but increased by +13 per cent YoY to over N1trn.
“This resulted in an agricultural trade surplus of N668.3bn, extending the positive balances that began in Q1 ’2024. This trend primarily reflects the impact of naira depreciation, which significantly increased the naira-denominated revenue from agricultural exports.
“The quantum increase in the volume and value of agricultural exports is a manifestation of the vigour that now characterises the classification of all non-oil exports reaching $5.45 billion in 2024 from $4.517 billion in 2023 which is considered the highest non-oil export value in the 49-year history of the Nigeria Exports Promotion Council (NEPC).
”However, the projection, going forward, is that the non-oil export performance data for the first half of 2025 at $3.225 billion from the $2.7 billion recorded in the corresponding period of 2024, HI 2024, is a strong indication of an increase by higher percentage points than the $5.45 billion attained in 2025.
”This leap in non-oil sector fiscal returns underlines an enlarged space for the participation of people and corporates in international trade and business engagements with implications for microeconomic trends.
“What is more reassuring about the sustainability of the growing profile of the Nigerian non-oil exports is that it is anchored on a blossoming intra-African trade with a foundation in the West Africa region.
”Nigeria, for instance, shipped 663 million metric tonnes of goods to 11 ECOWAS countries in the first half of 2025. This marks a notable rise from the same period last year, underscoring the country’s growing role in West African trade.
”Beyond ECOWAS, Nigeria also exported 488 million metric tonnes of products worth $83.5 million to 21 other African nations—a 2.59% increase in value from 2024. The African Continental Free Trade Area (AfCFTA) agreement is credited for opening new opportunities for Nigerian exporters, particularly small and medium-sized businesses.”
The think tank also acknowledged the rebound in the fortunes of some of the country’s largest businesses after they had suffered initial losses in the aftermath of the decision to float the naira.
“Like the removal of fuel subsidy in June 2023, Nigeria floated the naira, marking a historic turning point in its foreign exchange regime. Shortly after, the naira experienced a steep depreciation, falling from about N460/$ in June 2023 to N1,535/$ by year-end 2024.
“This sharp depreciation exposed Nigerian companies to massive FX translation losses and rising interest burdens, which eroded shareholders’ value across the Nigerian Exchange.
“The pain was widespread but especially pronounced in the consumer goods and ICT sectors, where companies relied heavily on imported raw materials or carried substantial foreign-denominated loans. By Q1 2024, seven major listed consumer companies — BUA Foods, Cadbury Nigeria, International Breweries, Nigerian Breweries, NASCON Allied Industries, Dangote Sugar, and Nestlé Nigeria- reported a combined loss of N418 billion.
“Over the two years, these companies collectively lost N867 billion, dragged down by foreign exchange exposure and ballooning interest expenses. However, by the last quarter of 2024, signs of stability began to return to the economy. The foreign exchange market grew more orderly, with the naira settling into a relatively stable band. FX volatility eased, and market liquidity gradually improved.
“At the same time, companies adjusted their cost structures, refined pricing strategies, and restructured foreign obligations, creating a foundation for recovery. By the end of Q1 2025, that foundation began to yield results. After nearly two years of losses, the consumer goods sector posted a sharp turnaround in Q1 2025.
“The seven companies that had reported a combined loss of N418 billion in Q1 2024 returned to a combined pre-tax profit of N289.8 billion in Q1 2025. By the end of Q2 2025, all the consumer goods companies had returned to profitability with a combined pre-tax profit of about N264 billion.
“These sharp earnings reversal highlights how currency stability and internal cost controls can quickly shift the fortunes of companies previously dragged down by macroeconomic headwinds. “This captures the context in which domestic and global commentators have returned a verdict of stability for the Nigerian economy,” it added
The policy group also noted that the Nigerian capital market has, in the last few months, recorded its best performance in nearly twenty years.
“MTN Nigeria, Nigerian Breweries and Guinness Nigeria are on track to resume dividend payments by the end of 2025 as pressure eases after years of balance sheet strain. Cadbury Nigeria Plc and NASCON Allied Industries are also among the firms likely to pay dividends by the end of the year.
“This shift signals the end of a prolonged dividend drought when many listed firms could not pay dividends due to negative retained earnings or poor performance. This would have implications for wealth creation for shareholders with a broader impact on the circular economy. The dividend freeze, which began in 2022, was rooted in macroeconomic headwinds that impacted Nigerian firms in the past years.
“Meanwhile, the Nigerian capital market is experiencing a period of rare prosperity amid the reforms. Between January and July 2025, seven months, the Nigerian bourse recorded N6 trillion worth of equities transactions, the highest since 2007. In addition, the record value of equity transactions in seven months to July doubles the N3 trillion recorded in 12 months to December 2024.
“These performances have contributed to the emergence of the Nigerian Exchange as one of Africa’s best-performing markets in 2025, with the All-Share Index soaring by 37.25 per cent year-to-date as of August 1. This rally has unlocked a staggering N26.61 trillion in capital gains, pushing the total market capitalisation from N62.76 trillion at the start of the year to N89.37 trillion. The NGX has appreciated by $17.4 billion in dollar terms, rising from $41.84 billion to $58.4 billion,” IMPI said.
