By Franklin Alli
Nigeria has recorded N21.2 trillion trade deficits with the United States ofÂ Nigeria from 2002 to 2008.Nigerian Export-Import Bank (NEXIM), spokesman, Mr. Iyang Effiong, saidÂ in Lagos, â€œTrade statistics between the US and Nigeria, showed that the trade figure is tilted consistently in favour of the US. The statistics showed that between 2002-2008, Nigeria posted US$141,164.3 billion(about N21.2 trillion) trade deficits with the United States of America.â€
Speaking at a sensitization workshop on the â€˜Benefits of the Trade and Investment Frame Work Agreement (TIFA) organised by the Federal Ministry of Commerce and Industry, he said, â€œNigeriaâ€™s exports to the US between the period under review was $14,367.9 or N2.154 trillion, imports stood at $155,328.1, leaving a balance of $141,164.3 which is equivalent to N21.2 trillion.
This he said is due to the challenges of exporting non-oil products to the US. He said one of the most daunting challenges of exporting non-oil products to the US marketÂ is the sourcing of financing to facilitate trade.
â€œThe absence of trade finance infrastructure in an economy is in effect equivalent to a barrier in trade. Where financing exists, it is often inadequate and at high costs. There is also the dearth of insurance/guarantee facilities, which further hinder the trade/export financing.
An effective trade facilitation programme should therefore seek amongst others to: streamline trade procedures and processes, reduce transaction costs and time,secure financing, resolve emerging trade disputes and Promote Free Trade.
The faster and easier the process of financing both local and international transaction, the more trade will be facilitated, as traders require short-term financing (working capital) to support their trading activities. While exporters usually require pre-shipment financing to process or manufacture products for the export market before receiving payment, importers need Lines of Credit to buy goods overseas and sell them in the domestic market before paying for imports.
In most cases, foreign buyers expect to pay only when goods arrive, or later still if possible, but certainly not in advance. They prefer an open account, or at least a delayed payment arrangement. Being able to offer attractive payments term to buyers is often crucial in getting an export contract and requires access to financing for exporters.â€