By Nkiruka Nnorom
To highlight and address some of the challenges of the manufacturing and trade sectors of the economy in light of the coronavirus pandemic, Sterling Bank Plc held a brainstorming session with its customers in the import/export business.
In a keynote address, Mr. Raheem Owodeyi, Executive Director of Operations and Chief Operating Officer (COO) of Sterling Bank, told participants at the webinar that COVID-19 has disrupted global logistics, leading to price fluctuations in commodities and drops in GDP and foreign reserves.
He also said that the situation has consequently made it a challenge for banks to support importers and exporters of goods and services in meeting their trade obligations to suppliers.
Owodeyi remarked that those who go all out to obtain the foreign exchange outside of the official channels tend to incur higher than required costs, and in a bid to reduce the constraints of its customers, the bank decided to put together the seminar to educate customers on how they can manage the changes created by the pandemic, dearth of foreign exchange and how they can source foreign exchange through the right channels.
Also speaking, Mr. Samuel Oyeyipo, Regional Coordinator, Nigerian Export Promotion Council (NEPC), South West Regional Office, Lagos, in his paper entitled, “Export trade in Nigeria, Opportunities and Requirements,” said exporters engage in export business to earn forex, gain access to bigger markets and increase profit levels. He explained that there are several opportunities in non-oil exports for leather, cashew, cocoa, rubber and manufactured products, among others as all of these have potential to contribute to the nation’s non-oil foreign exchange earnings.
He also listed some of the major destinations for Nigerian exports as Europe, US, Asia, other parts of the African continent and the Middle East, adding that steps taken to export products include an export plan, decision on the product or service to export, business registration with appropriate regulatory bodies like Corporate Affairs Commission (CAC) and NEPC, and opening of foreign currency domiciliary account to receive FX earnings. Other requirements include adequate packaging and labelling of products for export, which must meet certain international standards of containment, protection and preservation.
The regional coordinator also shared that the NEPC is engaged in some intervention projects such as collaborations with Sterling Bank to train interested individuals and enterprises for the export business, human capital development with other international and local agencies and its One-State-One-Product Initiative, under which each state in the federation is encouraged to develop a product in which it has comparative advantage for export.
Presenting his thoughts on “Trade Competitiveness through Collaboration,” Mr. Bamidele Ayemibo, MD/CEO- 3T Impex Trade Academy, stressed the need for collaboration between importers and exporters.
He said, “In order to survive the impact of COVID-19 on international trade in Nigeria, the importer and exporter must work together with their banks in a symbiotic relationship to generate funding to grow the volume of non-oil exports and foreign exchange as a way of easing the pressure on Naira.”
He also reiterated the need for importers to build capacity and consider direct export funding as alternative means of generating FX to meet their import funding needs while at the same time mitigating exchange risks by entering into FX forward and futures contracts
Mr. Kola Awe, MD/CEO of XPT Logistics International Limited, who spoke on ‘Imperatives of Freight Forwarding and Documentation’, noted that freight forwarding is the heart of the export trade because it involves the movement of goods from one location to another.
Awe, who is also a legal practitioner, said the freight forwarder is critical to the export business because he is the one that coordinates the shipment, engages in strategic planning, and advises the exporter about export procedures, including the cost of trade.
He explained that in international trade, documentation is as good as the product, adding that improper documentation is one of the reasons that clearing of goods at international ports.