Non-Oil Exports: The Paper Contributions By HRM Adaku Chidume-Okoro

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HRM Adaku
HRM Adaku Chidume-Okoro

INTERNATIONAL TRADE SEMINAR ON NON-OIL EXPORTS ORGANISED BY ZENITH BANK PLC WITH THE THEME ‘UNLOCKING OPPORTUNITIES IN NIGERIA’S NON-OIL EXPORT BUSINESS”

 PANEL 1: OPERATORS/PRACTITIONERS’ PERSPECTIVES CONTRIBUTIONS BY HRM ADAKU CHIDUME-OKORO, PRESIDENTIAL AWARD WINNER: “WOMAN EXPORTER OF THE YEAR 2010 (NON-OIL EXPORTS)” Context:  Experience, value Chain and future prospects  

 Solutions to the Non-oil export sector challenges will be categorized into Short Term, medium-term and long-term.

Questions:

Are there areas where Exporters believe we should be focusing on that we are not paying attention to as a country?

Encouragement/Empowerment of Bottom of the Pyramid (BOP) Farmers working with Exporters in the Value Chain. (Short Term) BOP supply chains are made up of Women & youth, who have neither capital nor collateral for business growth. A special scheme to help bust their business growth is needed, like what USAID & World Bank are doing, by giving Grants/Micro credits to exporters for on-lending to Farmers in the Value chain at zero interest rate.

We need to be focusing attention on Disruptive Events that have far-reaching consequences on the Non-Oil Export Sector, viz The Russian/Ukraine war, the Shift in Global Consumption and Demand Trends in the food industry on Flavours, Colours, Concentrate, Oils and the impact of Insurgency on production and output quantities. (Short Term) Food Safety & Traceability issues. This is on the front burner in the international Trade of Agro Products. (Short Term)

Bi-Lateral/Multilateral International Trade Barriers: Eg Gum Arabic from Mali, Senegal, Sudan & Chad are duty Exempt in China & India, whereas Gum Arabic from Nigeria is under a heavy duty of over 35%. This makes Nigerian Gum Arabic unattractive to China & India markets that used to buy over 60% of Nigeria’s Gum Arabic products. Our Government will need to intervene in this matter by discussing with the Governments of India and China to save the Nigeria Gum Arabic business. (Short Term)

International Trade Exhibitions: Hosting of Nigerian Pavilion at important International food Exhibitions & Food Technology shows as well as B2B meetings with oversea Product Associations, to be anchored by our Government. (Short Term)

We should take advantage of the current crises in Ukraine/Russia and upscale our cultivation of cereals like maize, by engaging & empowering our BOP farmers for bumper harvest to bridge the local demand gap and for Export as well. (Short Term)

Food Safety: Global Food Safety Standards (GFSS). Globally, Countries have strengthened surveillance on the safety of Agro Products imported into their countries. Permissible Pesticides and Mycotoxins levels have been zeroed or reduced considerably. To avoid the incidence of rejected containers at ports of destinations, it has become imperative for our Regulatory Authorities to pay attention to Farmer’s education in this respect. (Short Term)

Education of Nigerian Farmers, Co-operative Groups and other value chain operators of Agro Commodities on Best Practices and safe use of Agro Chemicals has become imperative. Using Agricultural Extension Officers to deepen compliance is also a practical step. (Short Term)

Gender Inclusiveness, Integration & Recognition in the Non-Oil Export Sector: Women represent a critical mass in the value chain of most Agro Commodities meant for Export, especially at the level of farming and primary processing & now at Managerial levels. International Agencies including World Bank, UN, USAID, EU, etc have special incentives to support SMEs, Women and Youths. In recognition of this and in alignment with what is obtainable globally; CBN, NEPC, and Impact Financiers& the Nigerian Government should create special incentives as well as carve out female gender criteria in existing incentives schemes for women-owned/ led Non-Oil Export organisations. (Short Term)

Government to go out of its way to encourage Non-Oil Exports activities that guarantee job security and boost Employment for Bottom of Pyramid (BOP) members of the value chain & de-emphasize total mechanization that results in job losses. (Short Term)

Government to remove all bottlenecks at the seaport to ensure that Non-oil Exports and especially Agro Commodities do not spend more than one week at the port before the containers are released for shipment by Nigerian Customs and other Regulatory Authorities (Short Term)

Encouraging Active Exporter SMEs to engage in further value addition through full mechanization of their production processes, by way of Grants for technology and Equipment Acquisition. (Medium Term) Encourage Innovations geared towards Nitche Markets. (Medium Term)

Product Associations: Empower them to be active and relevant, with matching deliverable mandates. Value Chain Commodity Associations provide an integrated Network that links Stakeholders in Value Chains. They should be empowered to self-regulate and provide the needed management for Value Chains. (Medium Term) Attention needs to be paid to the Services Sector: IT, Tourism, & Entertainment as possible high-value foreign exchange earnings sectors of the economy. (Medium Term)

Effective Engagement of Cooperatives & Mutual as the downline in the Non-Oil Export value chain.

Commodities Cooperatives Societies and Mutual Organisations provide platforms for shared knowledge, cross guarantee, traceability and Group interventions. They should be supported and strengthened. (Medium Term).

How do we add value to our primary products in order to get better returns from exported products?

Because of International Food safety concerns about the Nigerian Environment and Food Safety measures, oversea buyers prefer to buy semi-processed products from Nigeria which they can subject to further serialization & food safety handling, in compliance with standards acceptable in their clime.

Since we have a trade advantage in supplying the semi-processed products to the international market, the Government should encourage SMEs to do more of this to get in the much-needed foreign exchange, pending when Nigeria’s finished products can globally be acclaimed to be of high food safety standard & acceptable in the international market.

Meanwhile, NEPC should continue its giant strides of partnering with international Agencies for certification of Nigeria’s products, while the FGN could come up with processing/Manufacturing hubs for communal access by SME Exporters. This is to serve the needs of SMEs that may wish to Export finished goods, but cannot afford the processing machines. So they take the route of contract manufacture of their products, using the communal hub. (Short Term)

Government Ministries, Agencies, and Institutions involved in the Food System in Nigeria including FMARD, FMITI, NEPC, NAQS, SON, NAFDAC, FPIS, CBN, DFIs, Commodities Associations, Research Institutes, etc, should work together to ensure continuous engagement, training and re-training of Farmers, Exporters and other Value Chain Actors in exportable Commodities to ensure verifiable compliance with Global Food Safety Standards (GFSS). This will build the confidence of Oversea Buyers and consumers in our finished products. (Short Term)

What are the areas of support needed by players in this sector in order for them to increase volume and value? 

Easily accessible single interest rate working capital facility and Grants for mechanization, that will not lead to unemployment. (Short Term)

Total tax waiver for all categories of taxes. (Short Term) Timely payment of approved Export Expansion Grants within six months maximum of claims submission. (Short Term)

Realization & Focus on SME Exporters as the Engine room for Nigeria’s economic emancipation, employment generation & main foreign exchange supply sector. (Short Term) Payment of outstanding EEGs to Non–Oil Export Companies (2007 till date)(Short Term).

NEPC in Conjunction with CBN to come up with an incentive product which :

Will make available to Non –Oil Export SMEs Non-Collateralized, single-interest loans for their working capital based on proven track records and performance. This scheme is also obtainable with what USDFC & USADF are doing under ASBC.

Outright Grants to SMEs in Non–Oil Sector, to improve their facilities & upgrade (mechanize) needful parts of their operations.

CBN / NEPC to include ‘Grant to Exporters’ for Industry Development, as part of their core objective. This will entail broadening the scope of what the incentive unit of NEPC is doing at the moment, by having in-house personnel that will follow through with projects so initiated. (Medium Term)

Provision of Separate Terminals for Exports equipped with Transit Warehouses for handling Commodities as different from that imports. (Long Term) Access to the shipping terminal by road& Rail. (Long Term) Application of Technology in Non-Oil Export value Chain, eg Drone Technology. (Long Term)

For solid minerals export, raw commodities are not being fully harnessed, what can we do better?

Encouragement of local and foreign investors in this sector, through the provision of long-term funding for Equipment acquisition, tax holidays & Export incentives. (Short Term) Technical support through authentic mineral mapping of Nigeria’s Geophysical space. (Short Term)

Encouragement of value addition through the provision of processing equipment to the SMEs by way of Grants, by the Government. (Medium Term) Exploration-friendly environment. (Long Term)

What are the main challenges facing primary products (Natural resources) exporters in Nigeria?

Difficult access to Export Funding

Poor Funding of Export incentives by Government

Very Weak Value Chains leading to poor product quality

Logistics

Market Access

Technology

Multiply documentation at the ports of shipments

Product Certification

Bonus Question

CBN emphasis is on value addition – for the RT- 200 program: what are your challenges?

 Wrong and Inappropriate Categorization of Export Products as Processed, Raw, or Unprocessed by CBN/Regulatory Authorities for the purposes of payment of Export Incentives.

Most SMEs are Exporting semi-processed goods after adding the value of up to 400% to the raw product, but these semi-processed products are still being classified as having no value addition!!!! Examples are Dried Split Ginger, Dried split Turmeric, Dried Hibiscus Flower, etc. The international price of Raw Ginger is USD 560 pmt while the international Price of Dried Split Ginger is between USD 2,100 to USD 2,300. There is obviously a value addition of about 400% in the processing and export of Dried Split Ginger and similar commodities.

Some of the SME Export Companies are using automated washers, Slicers, Dryers & high infrared Colour Sorting Machines, acquired at very huge costs, for the processing of their products.

The SME Group producing mainly semi-processed goods being marginalized and denied the RT 200Export Incentive is the vulnerable Group dominated by Nigerian Women and youth and indigenous Peoples of Nigeria.

SMEs are the catalyst for the desired Non-Oil Export boom. They should be encouraged, by all means.

The RT 200 CBN Incentives suggest supporting & encourage mainly the big players in the Industry.

With the wrong categorization of saying Dried Split Ginger as a primary product from the incentive bracket, the Bottom of the Pyramid (BOP) workers, who toil day and night to harvest the fresh products, wash with traditional technology, split & dry these products ( now semi-processed) for the export market, are not being rewarded by CBN for their value addition.

CBN needs to urgently redress this anomaly.

PRAYER: These SMEs request to be categorized and rightly so as Exporters of Semi processed products in the CBN RT200 Incentive scheme and be paid what is due to them since the inception of the RT200 Scheme in the First Quarter of 2022.

HRM ADAKU CHIDUME-OKORO                                                                                                                  Presidential Award Winner: “Woman Exporter of the Year 2010 (Non-oil Exports)”

GMD/CEO GACON GROUP

#UNLOCKINGOPPORTUNITIESINNIGERIA’SNONOILEXPOBIZ*20JULY2022*LAGOS#

 

 


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