September 30, 2022

FG targets 242% rise in export of services to N6.5trn in 4yrs

export, used cars

By Yinka Kolawole

The Federal Government is set to feast on the blossoming digital economy to improve Nigeria’s balance of payments position with a projection of 242 percent rise in the export of value-added services to N6.5 trillion in 2025 from N1.9 trillion recorded in 2021.

This is even as it expects the nation’s current account balance within the period to increase by 632 percent to N3.2 trillion (2025) from N436.9 billion (2021).

The projection is contained in the final draft of the 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF & FSP) prepared by the Budget Office of the federation for the National Assembly’s endorsement.

The Organization for Economic Cooperation and Development (OECD) describes a digital economy as one which incorporates all economic activities reliant on or significantly enhanced using digital inputs. 

According to OECD, the digital economy is valued at $3 trillion globally.

The MTEF & FSP document stated: “External balance is at the core of trade policy and foreign exchange management in the medium term. Efforts will be intensified to enhance non-oil exports, increase export complexity and reduce import dependency in order to improve the balance of payments position. 

“A key objective is to diversify the composition of exports to include manufactured goods and high value-added services as the digital economy expands. Shifts in the composition of imports away from items like food and petroleum products will also support the attainment of this objective.

“Nigeria will take advantage of the opportunities offered by the African Continental Free Trade Area (AfCFTA) to explore new export markets. Non-oil export is expected to rise to about two percent of Gross Domestic Product (GDP) by 2025 while oil export as a percentage of GDP is expected to decline from 10.6 percent in 2021 to 9.5 percent in 2025. 

“Exports of services are expected to rise from N1.9 trillion in 2021 to N6.5 trillion in 2025, representing an increase from about one percent in 2021 to close at two percent of GDP by 2025. 

“As a result, Nigeria’s current account balance is projected to rise from N436.9 billion in 2021 to N3.2 trillion in 2025.”