Despite efforts by the Federal Government to boost agricultural produce, the country still spends a lot on importation of agricultural products. How can we reduce agricultural imports, particularly the food element?
It is a fact that the import bill on food and agric products is still high but in recent times we have witnessed a gradual reduction in import and increased local production in pro- duce that consumes high forex for import like rice. Produce like sesame, ginger, hibiscus, have witnessed increased production locally and have driven up our export volume. We can reduce our import bill on agric produce by adopting a whole new approach in the agricultural sector. We have to introduce deliberate targeted policies geared towards increasing our food production.
These policies should provide support such as inputs (improved seedlings for increased yield per hectare, approved pesticides/insecticides, etc.), training on adherence to best practices, mechanisation, long term funding, incentives among others to the farmers and other value chain actors. We have to make agriculture attractive to the youths by introducing technology, providing infrastructures such as silos, cold storage facilities, guarantee pricing, to ensure that increased production is secured and adequately stored. All these actions will drastically reduce our food import bill.
The Federal Government, through the Nigerian Ports Authority, recently licensed five export terminals which are complementary to the NEPC facilitated Domestic Export Warehouse. What does this mean for the export sector?
Let me make this point clear. Reports revealed that as of 2021, the global maritime industry along the entire value chain from shipping and freight services to logistics and others is worth about $6 trillion. It has also been said in some quarters that Nigeria’s maritime sector alone is more than enough to sustain the country’s economy. So licensing of five Export Processing Terminals by the Nigerian Ports Authority is one of the Federal Government’s initiatives to increase non-oil export volume through removal of port access related bottlenecks or what I may refer to as supply side constraints.
The EPTs are a specialised processing and handling facility for the exportation of the country’s locally made finished and agricultural goods. The EPTs which are geared towards ensuring quick turnaround time for export products and containers are expected to reduce the cost of doing business for exporters and traffic gridlocks on the roads leading to the ports in Lagos, ease the bureaucratic and logistical bottlenecks faced by exporters, thereby promoting better access of the country non-oil exports into international markets.
So, I am optimistic that these new export terminals will not only reduce the incidences of port congestion which has over the years created logistics problems for movement of goods but will further help to make our products competitive in the international market as well as increase export of made- in-Nigeria products. Of course, this will bring in more foreign exchange and also create jobs. I have written a letter congratulating my brother, the Managing Director of NPA for this uncommon feat.
Manufacturers of export goods recently asked the Central Bank of Nigeria (CBN) to create a separate foreign exchange window for them, has there been any move by the Federal Government to address this issue?
The request by the manufacturing exporters is occasioned by their inability to access forex to procure equipment and raw materials that are imported. The manufacturers after exporting and repatriating their export proceeds usually face challenges accessing their export proceeds, they sometimes have to source forex at a parallel market to enable them import equipment/ raw materials, this makes them globally uncompetitive.
The uncertainty and fluctuation in the foreign exchange market also makes it difficult for them to plan hence this is what prompted their request for a separate foreign exchange window, that will enable them procure forex at favourable and stable rate and enable them export their product at competitive pricing. It is the prerogative of the CBN to consider such a request and act on it accordingly.
The African Continental Free Trade Area has been estimated to connect the continent to a $3 trillion market. How can Nigerian exporters benefit from the AFCFTA?
You may need to know that intra-EU trade is 60 percent while Asia is about 40 per cent. Now compare that to intra African trade which is just about 12 or 13 per cent. This is significantly lower than many other regions. You will agree with me that this limits foreign investments within the continent, while increasing trade dependence on markets outside the African continent, this is not right, there is a need to change the trajectory. AfCFTA therefore offers huge opportunities for Africans to do business with each other. Some of the ways in which we can take advantage of this huge market is by implementing the AfCFTA protocols.
Reports show that 30 million Africans will be lifted out of extreme poverty and boost the incomes of nearly 68 million others as well as boost Africa’s income by $450 billion by 2035. To answer your question specifically, I must state at this juncture that AfCFTA offers Nigerian exporters particularly MSMEs a wonderful opportunity to di- versify their products and their market by targeting about 1.3 billion persons on the African continent.
To achieve this, the exporters have to build capacity, understand the rules and guidelines involved in trading under the AfCFTA, imbibe and improve on best practices, improve on their packaging/labeling, implement mandatory and non-mandatory certifications, such as HACCP, Food Safety Management Systems, GMP among others. All of these will make them competitive and ensure ease of market access. At the end of the day, the Nigerian economy will be better off.
What’s the update on Domestic Export Warehouse that the agency launched not too long ago?
The NEPC and its inter-agency partners comprising NPA, NSC, NCS, NAQS, FRSC, NPF, NAFDAC, had licensed 13 Domestic Export Warehouse operators across the country; these DEW operators and their facilities require some level of investment in equipment, infrastructure and personnel which will also require some time to get together. Among the 13 licensed operators, two (Kaduna Inland Dryport and Esslibra in Ikorodu) are fully ready and have commenced skeletal operations. The FRSC has approved special plate numbers for DEW trucks conveying export designated containers while the Inspector General of Nigeria Police has designated an officer as the liaison on the DEW.
All the export regulatory agencies have agreed and have nominated schedule officers to each facility. While the NEPC, NPA and TTP are working on the modality for accessing the ports via the e-call up for DEW trucks. The constraints faced with operationalizing the DEWs are being addressed and soon full commencement of operations will be launched. I must stress that the DEW is being implemented in line with the Federal Government National Action Plan (NAP 7.0) as directed by the Presidential Enabling Business Environment Council.
Would you say the country has done well with regard to the volume of non-oil exports done last year?
Yes, we have performed exceptionally well. Without doubt the non-oil export sector has performed beyond our expectation. It is worthy to note that in spite of the global economic recession that affected most businesses in 2021, the sector recorded a significant result in the first half year of 2022 as a total of 4,146,534 metric tonnes of product worth $2.593 billion was exported representing (62.37 percent increase) as against the sum of $1.59 billion for the first half year in 2021 and 2020 which stood at $981.44 million respectively. Indeed, over 200 different products ranging from manufactured, semi-processed, solid minerals to raw agricultural products were exported during the period under review.
It may interest you to know that unlike previous records, the export of Nigerian products is gradually shifting from its traditional agriculture exports to semi- processed/manufactured goods. Furthermore, of the top 15 exported products, Urea/Fertilizer recorded 32.49 per cent of total export while Cocoa Beans, Sesame Seed and Aluminum Ingots contributed 12.65 per cent, seven per cent and 5.07 per cent respectively within the same period. The country can do a lot more if more efforts are concentrated on removing non-oil export identified constraints.
What will you say has been the major challenge hindering the non-oil export sector?
Like any other sector, the non-oil export sector has had its fair share of challenges, some of which constitute constraints militating against the growth of the non-oil export sector. Among these challenges is the fluctuation in exchange rate which has given rise to speculations affecting prices of commodities. In this vein, exporters are unable to lockdown prices prior to exporting to importers. There is also the issue of port congestion and other infrastructural deficiency arising from insufficiency of quality infrastructures, poor regulatory mechanism etc. On the part of the exporters, the issue of poor packaging/labelling is very key. All these challenges have accumulated into making Nigerian products uncompetitive and thereby inhibiting the growth of the sector.
How does NEPC plan to boost the country’s non- oil exports?
Through numerous capacity building programmes in the area of good agricultural practices, packaging and provision of hybrid seedlings to farmers, just to mention a few, the council has assisted exporters in addressing the issue of poor quality of Nigerian products. The “Go Global, Go Certification” project, one of the flagship programmes of the Council, is aimed at securing appropriate international certifications like HACCP, FDA, Halal, ISO22000, etc., which we have freely implemented for about 200 MSMEs over two years. To make Nigerian products competitive in the global market, we also established three Export Trade Houses in 2022, in Cairo, Egypt, Lome in Togo and Nairobi in Kenya respectively.
The major objective of the ETHs is targeted at increasing Nigeria’s international market share and growth, enhancing the visibility of Nigerian products as well as increasing foreign exchange inflow and creating employment for the teaming youths. Plans are underway to establish another ETH in South Africa and Dubai, United Arab Emirates among others. This project is being executed under a Public-Private-Partnership scheme. We also spearheaded the participation of exporters especially SMEs to various international trade fairs, exhibitions and special trade forums in Cote D’voire, Ireland, Egypt etc.
These events created opportunities for B2B and B2C meetings. Only last year the NEPC spearheaded the participation of over 100 Nigerian companies to the 2nd Inter African Trade Fair in Durban, South Africa. And just recently, we partnered with SMEDAN to organise the first ever solo-exhibition of Made- in-Nigeria products in Gambia.