….warn Nigeria may lose out in AfCTA if govt fails to take advantage
By Gabriel Ewepu
In the wake of COVID-19 pandemic affecting global trade including oil and gas, the Network of Practicing Non-oil Exporters of Nigeria, NPNEN, and other stakeholders, yesterday, demand deliberate government policies to change narrative in non-oil exports.
This was the position of stakeholders at NPNEN Annual Non-oil Export Conference, Exhibition and Awards 2021 (NPNEN-NECA 2021) with theme ‘Rebuilding Nigeria Economy through Non-oil Exports: A Strategic Imperative’ held in Abuja, which was attended by private sector players, relevant government regulatory ministries, departments, committees and agencies.
The President, NPNEN, Dr Ahmed Rabiu, in a welcome address, maintained that non-oil exports remain the only solution to drive Nigeria’s economic growth and development including job creation and industrialization.
He added that the conference is an annual event that brings stakeholders together in the non-oil export sector including Micro, Small and Medium Enterprises, MSMEs, exporters, banks, insurance companies, and others.
According to him the impact expected from the conference is to help grow and liberalize markets and business settings as NPNEN has been in the lead to assist MSMEs, exporters and others to grow and also in the implementation of policies in the non-oil sector.
However, he said there are issues to be tackled in the export business; market access, finance, regulations, and others.
He decried the long stay and delay of cargo at the nation’s ports, which has serious ripple effects on export business.
He also said NPNEN is ready to work with relevant government agencies to realise the objectives of operators in the non-oil sector.
He said: “it is the responsibility of all of us to make the Nigerian economy competitive; to explore the opportunities in the African Continental Free Trade Area, and also being the largest in terms of population, largest economy in Africa, we have so much of the gifts of nature including agriculture, solid minerals.
“Competitiveness is about bringing the price down, raise the quality to surpass others and rose to the international standards.”
Meanwhile, the Programme Manager, PDF Bridge, Dr Titilola Akindeinde, in a keynote address, said Nigeria should take advantage of the pandemic and position herself in global trade as far as non-oil export is concerned.
Akindeinde further stated that Nigeria is well place in AfCTA, because this has opened new vista for the Nigerian non-oil export business to expand the economy.
She said, “Although diversification has been a long-conceived ambition of successive administrations in he last four decades or more, it is now time to move form aspiration to taking decisive steps towards rebuilding this economy on a more solid foundation beyond oil.
“Economic diversification is no longer an ideal aspirational state for the Nigeria economy, but rather an imperative for sustainable economic growth. The pandemic, despite the hardship it brought upon the entire world also opened some windows of opportunities for developing countries like Nigeria to reposition themselves in the global non-oil trade space.
“In addition, the newly created African Continental Free Trade Area, AfCTA, has opened another window of less stringent conditions for trade among 54 economies that have signed the agreement.
“The AfCTA presents expansive regional market covering 55 countries with 1.2 billion people and cumulative Gross Domestic Product, GDP, of $3 trillion.”
However, she (Akindeinde) highlighted some challenges that affect MSMEs’ participation in non-oil export including dominance of informal operators; complex trade systems and processes; limited inter-agency coherence; information and capacity gaps; and limited access to markets and finance.
In her recommendations, to tackle the issues affecting MSMEs she said, “On formality in the MSME space, operators should be strategically reached and integrated into the formal system to enable them to access business related development incentives to grow their business and the non-oil export sector.
“On business environment complexities, trade processes and systems, simplicities, harmonization and automation of export processes and businesses in general is required. Trade regulators are encouraged to place trade facilitation above revenue generation to effectively build economic prosperity on non-oil export.
“On inter-agency coherence, it is important for trade support institutions to collaborate and work with private sector with one focus on mind- process improvement and facilitation rather than excessive regulation. One-stop process points are required to create efficient, effective, and profitable environment for non-oil exports.
“On capacity, MSMEs in the non-oil export eco-system should be targets of comprehensive and easily accessible capacity build programmes particularly in the areas of compliance to regulations and standards, requirements for access to finance, and export readiness and access to export market.
“On access to markets and finance, structures that enable foreign market linkages are required including systems of aggregation of MSMEs and linking them to structures that facilitate access to foreign market without unnecessary difficulties. Financial systems should give special consideration to the MSMEs by customizing finance strategies that suit their peculiarities in Nigeria.
“Implementation of these recommendations often requires active collaboration between public and private sectors. However, despite the importance and potentials of the MSMEs in these interactions, their voices and concerns remain inadequately considered in the design of policy and processes that impact their export businesses.”
She added that, “Having identified this gap, the PDF took the lead in supporting MSMEs’ participation in the non-oil sector by creating institutional linkages between the exporter groups and the policy makers.”
It will be recalled that the PDF was the brain behind the registration of NPNEN on March 3, 2020, which made it became a special purpose vehicle created to unify the voices of underrepresented groups in the non-oil export space.
Meanwhile, the Chairman, Board of Trustees, BoT, Prince Adetokunbo Kayode, stressed the need for
Export is sector of the economy, and there is internal trade and external trade-export is the external trade. What we are saying is that government should take a strong command in guiding the external trade and make sure it works.
“Today, when we say we are the largest economy in Africa is because we making money form oil-how many of are contributing to that oil; the white man comes drills the oil and ships it abroad and make money, but gives us little percentage of it.
“We don’t add any value to it, we don’t do petro-chemicals, gas, but the one we are used to that we have total control over is agriculture, solid minerals and services.
“How do we get these three sectors into export trade? We had all these complaints a and all is about government because there are hundreds of government agencies working in parallel, while all of them can sit together with what we call a single window.
“So it is the inefficiency of the system, lack of collaboration and coordination that is the main challenge including infrastructure. For instance you want to export groundnut you have to fill 20 documents. There are too many roadblocks.
“Secondly within the export sector there are several sectors that depend on each other. Government needs to help articulate it so people can key into the value chain.
“This conference is to help the government to develop a clear policy. Policy that identifies value chains, various government agencies to work together and make them understand that they must collaborate to develop the export products, develop value chains of export products from their sources to the ports then shipping, develop policy as to funding.
“NEXIM Bank gives money to the Chinese. They have access more than the average person. NEXIM Bank said they gave 90 per cent of money to MSMEs, what is the actual money you gave to MSMEs? They said they only gave three per cent to big companies, how much did they give to these companies?
“All over the world, export funding is for your own people. There is a mistake in our law that allows a foreigner register his own company here to be domestic, if you are a foreigner you want to register your own company here go to the Export Processing Zone which is a separate regime. Why should an Indian go to NEXIM to get funding, which we cannot do in India NEXIM, and in India you cannot register 100 per cent, but 40-60.
“Why is Apapa Port still full of people, why not use technology to make it easier? All these clearing and forwarding is to be done online”, he said.
Meanwhile, during the panel discussion which was moderated by Dr Olumuyiwa Alaba, a Trade Policy Expert with PDF Bridge, most of the panelists said there is need to change policy strategy and come up with deliberate approach that would tackle bedeviling bottlenecks experienced by exporters over the years for smooth, seamless and stable business atmosphere that facilitates export trade.
One of the panelists, Ebube Chukwujekwu said, “For years now we have tried to optimise the export expansion grant and move away from what the law stipulated. I will give three examples Bio-Exporting Incentive Act, and the EEG supposed to be a cash grant-it is a cash incentive.
“The EEG supposed to go to manufacturers of exportable products. We added semi-manufactured goods and raw materials to it, and for some good reasons that pathway will be allowed.
“Now my grouse is that why don’t we go back to the laws, amend the laws rather than building old something that do something that is illegal upon an existing law?”
In another response, the Director, Commodities and Export Department, Federal Ministry of Industry, Trade and Investment, Suleman Audu, said that, “Now that we have the AfCTA, how do we take advantage of these areas of opportunities? What do we want to do in terms of policy? There are always issues around Nigeria’s trade policy and other policies including sectoral.
“Nigeria also has opportunity to respond to all these barriers created. We are currently looking a new trade policy. The last trade policy was in 2012 that I think is obsolete.
“The trade policy we need now is the 21st century that takes into consideration all these circumstances including the digital economy, e-commerce MSCs, investments, and others.
“We cannot formulate trade policies without the other agencies that are also connected. We have to have consultation with all the stakeholders.
“We don’t have any ministry that regulates services in Nigeria but the Ministry still coordinates that. Service is very constructive and encompassing.
“We are active in collaboration with parastatals. Every three months we engage the heads of parastatals and we are soon going to that again.”
A representative from National Action Committee on AfCTA, Francis Anatogu who was represented by Ugochukwu explained what the committee has been doing to bring Nigeria on board in regional trade, “What we are doing is reaching out to various stakeholders and bringing them on board.
“We are engaging stakeholders to known the essence of this to understand what it is including what they are experiencing and facing; engage the supervising agencies to understand what we are providing and to articulate this into a document then present to Nigerians. We have done a lot of validation exercises and workshops which profit stakeholders.
“There is a great opportunity Africa provides and we want to use AfCTA as platform to prepare Nigeria for that.
Another panelist, Dr Hart said, “Nigeria is stock in its old ways despite AfCTA, if care is not taking Nigeria maybe the third bottom of the ladder that will benefit from AfCTA. I have read a lot about AfCTA even before the President was convinced to sign the document.
“Nigeria has a huge opportunity in AfCTA but is it going to add to our GDP? No! We do not have the infrastructure in place to catch up the opportunities because Nigeria is stock in its old ways.
“It is in Nigeria you will go to the ports as a business; go around the ports where things are working, the rail system is connected to the inland dry ports such that goods go straight to the inland dry ports.
“In US, UK and India where there are functioning dry ports, a business man does not need to go to the ports. Nigeria is stock in its old ways and it is going to affect us for a long time.
“Look at Nigeria and look at AfCTA, Nigeria is placed on the most advantageous position by God Almighty in the map of the world. Nigeria is not taking advantage of international treaties on trade routes.”
He also lamented that Nigeria is not using opportunities in inland dry ports, which he called on government to look at the transport sector critically, “We are to look inwards by using the inland dry ports to grow and expand our economy because inland dry ports are catalysts to grow the Nigerian economy.
“A lot needs to be done in logistics, and remove all unnecessary bottlenecks and we need to come up with deliberate policies to fix these problems.”