Eradicating Barriers to Export Business in Nigeria

Among many factors identified as impediments to successful export of Nigerian goods at a recent conference, two challenges stood out, which include making product acceptable in the international market and eliminating bureaucracies and protocols at the ports. Chinedu Eze writes that government and its agencies must review and enforce smoother process to export of potentially multi-billion dollars Nigerian goods

Last week, stakeholders from aviation, trade and transport sectors of the nation’s economy, brainstormed at the 2022 edition of the Chinet Aviation and Cargo conference held in Lagos and brought to the fore many challenges impeding export trade in Nigeria.

From not meeting international standardisation, inefficient regulation, corruption to hiccups in cargo freighting from the nation’s airports, the expose at the conference made it obvious that for many reasons, it is Nigeria that is holding itself down from taking advantage of the huge market, whereas Nigerian farm produce and other products from Nigeria are in high demand from different parts of the world.

Maximising opportunities

In her presentation at the conference, the Chairman, Export Group of the Lagos Chamber of Commerce and Industries (LCCI), Mrs. Bosun Solarin, said for Nigeria to benefit maximally from the African Continental Free Trade Area (AfCFTA), projected to elevate 30 million people out of abject poverty, generate a market hub that will connect 1.3 billion people in 55 countries and also generate $3.4 trillion aggregate GDP, the country has to be adequately prepared to effectively compete in the export trade.

For this to be achieved, Solarin said there must be effective distribution channels in which logistics, which is movement of people and goods, play indispensable role of bridging the gap between the dream and its reality. She made reference to report carried out after the conference last year, which highlighted inadequacies within the export space, which include problems of limited export production, limited/ or no capacity for certification/packaging of exportable products, infrastructural deficiency in the logistics and evacuation of exports, low penetration and access to key markets.

“Let me affirm that these problems still exist and will continue to exist until every agency of government will consciously aim at helping to mitigate and resolve some of these issues, and not seeing themselves as being up there, while every other person is down beneath,” she said.

She identified these problems to include the problems of limited export production, noting that Nigerians are more interested in importation of goods rather than promoting export.

“We must as a people develop the willingness to help this country out of its predicaments. We must deliberately embrace exportation through deliberate support to/for players in the sector, the CBN (Central Bank of Nigeria) has come up with various policies, but businesses/exporters are saying, they cannot be sourcing FX, even for payment of export charges, at very high rates and the CBN will be asking for the same FX at a very lower rate, that the N65 incentive which when added together is less than N500, this needs to be critically looked into, otherwise the RT200FX (CBN Pays Exporters programme) may just be a cliché,” she further said.

Certification

Solarin also pointed out that one of the inhibitions to export of Nigerian goods is certification. She noted that even to obtain certification from National Agency for Food and Drug Administration and Control in Nigeria (NAFDAC), which is a Nigerian agency is difficult to get.

“There are many MSMEs (Micro, Small and Medium Enterprises) now in production, NAFDAC charges about N40, 000 for one product with a maximum of five products that is allowable for registration for micro businesses, whether that micro business has capacity to do more does not matter to them, and where allowed, the cost for one additional product (the 6th) is N90, 000, they still collect 8 products each for lab analysis, when the costs are put together, it’s a great burden on entrepreneurs,” she explained.

Solarin said if Nigeria must move forward as a country, especially with “AfCFTA staring us in the face, NAFDAC should certify production facilities, why should Nigeria have many registration numbers for the same product eg. plantain flour, why not just a registration of facility, with facility numbers for each company as done by FDA (US Food and Drug Administration), HACCP (of FDA) e.t.c. Government should place less attention/emphasis on revenue generation for some agencies, because the disadvantages of such outweighs its advantages.”

She said the Standard Organsiation of Nigeria (SON) needed to do more on certification, remarking that businesses are tasked daily to get Mandatory Conformity Assessment Programme (MANCAP), yet there are no standards to process the applications.

“It costs almost N1.5 million to get the minimum third party certification HACCP that some countries still accept, who is helping to bridge this gap.

The Nigerian Export Promotion Council (NEPC) in 2021 paid to help about 120 exporters get certified with HACCP and ISO. More funding is required in this space if we must overcome the challenges, Access to markets will also continue to be an illusion without proper and acceptable certifications,” she also said.

Extortion And Bureaucracy

One of the major challenges facing air freighting of goods is extortion.

Officials of government agencies like Quarantine, NAFDAC, Nigerian Immigration Service, Customs and others constitute obstacles to easy movement of  goods to the underbelly of the aircraft that airlift them to various destinations. Using government bureaucracy and laws, these officials rigidly insist on certain conditions that must be met before they would allow these goods to be exported; but when bribed, they relax all the rules.

The Nigeria Export Processing Zone Authority (NEPZA) said that some of these laws do not exist in the books but are created by these agency officials to extort money from exporters.

Assistant Director, Investor Promotion, NEPZA, Augustine Onyekwere, who spoke at the conference on behalf of the agency’s Managing Director/CEO, Prof. Adesoji Adesugba, said there were many charges leveled on the exporters that were not approved by government.

“If you look at what is going on in some of our aviation industries precisely in this environment, there are a lot of unapproved people in that place. Maybe because it is our usual Nigerian way of doing things, some of these levies cannot be accounted for or taxes that people collect. Sometimes I ask myself, how many agencies are even in Lagos (Murtala Muhammed Airport). So if you go to the airport, somebody will tell you that they have to survive but this is not the same thing we see when we travel to other countries outside Nigeria. You hardly see all these type of things. I came in from Kigali, I was privileged to go there, I tell you; it is a crime to even think of gratification.  So if we can do that, I feel it is possible to do it so that we don’t continue to lose investment to Ghana and other countries,” Onyekwere said.

He said there are many charges that exporters pay that are not receipted.

“By government law from N100 payment we need to collect a receipt. But you know some of us coming from government; whatever thing you do you must have a receipt to claim your movement. So people that are practitioners understand what I meant by these charges, and some of them are illegal,” he said.

Onyekwere said that he was amazed that exporters still sustain their business after paying both legal and illegal charges, explaining that Ghana is doing better in exports than Nigeria because their export process is transparent and seamless.

“To be honest with you, I was privileged to be in Ghana in March and I went for a particular conference and I understand why European markets are enticed by Ghana exports. Of a truth, Nigeria has all it takes to lead but one of the challenges is bureaucracy, too many agencies. I was asking myself if I leave government what else could I do. Is it not either as a consultant or into business? I wonder how Nigerians survive in this business, I really don’t know. Because I can’t imagine how you pay all the levies, all the taxes from environment to this and that and they still stay in business. So the major thing is that there should be concerted effort by all regulatory agencies to know that every action each and every one of us is taking has its own way of disinvesting in Nigeria,” he said.

Illegal Exports

The Managing Director of Flight and Logistics Solutions, Amos Akpan said that many goods are freighted from Nigeria’s airports that are not documents; that Nigeria exports more goods than the records show.

He said that if Nigeria is determined to boost non-oil exports to earn foreign exchange and meet international obligatory payments, it has to change its attitude towards exports; because currently its approach to export is wrong.

“We engage more on seminars and policy statements, but what happens in the farms, logistics chains, airport and seaports, is far from what we say we want to achieve. Statistically, more non-recorded export trade is ongoing in the airports than those captured by the bureau of statistics,” he said.

In the area of solid minerals, he said that there is no mention of the volume or quantity of solid minerals exported per month or per year by

Nigerian Bureau of statistics, which also implies nil entry in the forex earning column of the statistical report.

“However, observers see the ongoing activities at the mining sites and the illegal movements of solid minerals through the Nigerian borders. It remains unrecorded and not captured as statistics and yields no revenue as export proceeds for the country,” Akpan said.

Exporting Processed Goods

Akpan said that Nigeria would earn more if agriculture produce goes through some processes before they are exported instead of exporting in the raw form from the farm. He said Nigerian entrepreneurs want to build factories to process these agricultural produces into products like tomato paste, pineapple juice, cassava syrup, starch flour, and feeds etc.

“There is no electricity to power the plants, no finance facility with friendly product development program, no security, no storage. Our environment present multiple headwinds for a venture to turn our farm produce to products. If we turn them to products, they have value and improve our earning as export products. Many entrepreneurs who ventured along this path met with killer obstacles that cut short the life span of their business. Export of one forty feet container of yam tubers from Nigeria cannot earn as much income as the export of one twenty feet container of processed packs of yam flour. Same analogy goes for other agricultural produce when tuned into packaged products. This does not negate the necessity to do the first things first,” he said.

Boosting Production

Akpan said some of agricultural produce are needed in Nigeria for local consumption, so whatever is produced must meet the local demand before there would be enough left for export, so Nigerians should produce more.

“Produce enough to feed the Nigerian populace. Produce extra to process into products. Follow internationally accepted documentation process in the soil, fertilizer, spray and harvest; present the process for certification so you can build confidence in your produce in the international market arena. In summary, we do not produce sufficient quantity to meet local demand. We cannot jump into exporting what we don’t have enough. When we produce sufficient to meet our consumption needs, we must encourage processing to products to add value,” he added.