Combating Substandard Agro Exports

Nigeria’s agric export is still facing high level of rejection despite efforts of various regulatory agencies to stem the tide, writes Gilbert Ekugbe

It is disheartening that in a world where technology is exposing new methods of preserving, planting, harvesting and processing agricultural commodities, Nigeria is still lagging behind for not doing things the right way despite having the competitive and comparative edge to thrive in the global agro export space.

According to the African Export-Import Bank (Afreximbank) Board of Trustees (BoT) Chairman, Professor Benedict Oramah, Nigeria has suffered over $700 million loss of agricultural produce to Europe alone, not to talk about the colossal losses to other continents, especially the Middle East that rely almost 100 per cent on importation for their food requirements.  

Reasons for the rejection of Nigeria’s agro products included food safety, technical barriers, non-adherence to global best practices, etc.

Last year, a technical committee was set up by the federal government to prevent the rejection of agro exports from Nigeria. The Chairman of the Committee and Director, Commodities and Export Department of the Ministry of Industry, Trade and Investment, Mr. Suleman Audu, charged the government to embark on a nationwide sensitisation programme of farmers and stakeholders in the agricultural value chain to adopt and embrace Good Agricultural Practices (GAP) in order to gain unhindered access into the global markets.

The GAP is a voluntary certification programme, which verifies through an audit, that sound food safety practices are being used. It helps to reduce the risk of microbial contamination in foods to ensure that they are safe for consumption.

Agro export potentials

The Nigerian agricultural sector is replete with diverse opportunities that if harnessed effectively would drive agricultural development and expand agricultural export. There is no denying the fact that Nigeria has the comparative and competitive advantage to thrive in the agro export space, but sadly, not much has been achieved with the nation’s abundant natural resources.

Although Nigeria Export Promotion Council (NEPC) in its report stated that Nigeria’s Non-oil export grew by 39.91 per cent in 2022 to $4.820 billion, stressing that semi-processed and manufactured products made up 36.61 per cent of the exports beating agriculture’s 30.12 per cent volume of non-oil exports, while precious stones made up 17.06 per cent, and others 13.21 per cent.

Even though it appeared as a progress report, yet there is need for managers of the Nigerian economy to prioritise policies and strategic decisions that would drive growth to at least over 50 per cent in the short to medium term.

According to NEPC, the largest estimated untapped potentials for Nigeria is China, which accounted for an estimated 65 per cent of total potential value.

China is currently the third largest agricultural export destination, after Turkey and Japan.

Overall, agriculture experts are of the view that the country has the potential to generate $40 billion annually from export of agricultural goods. With Africa Continental Free Trade Agreement (AfCFTA) on the cards and being a common market arrangement, will encourage unhindered flow of Nigeria’s agricultural goods to key markets in Africa that are in need of it.

However, Nigeria must expedite actions in improving the basic infrastructure impacting agriculture export growth in order to harvest the advantages of the untapped market potential that AfCFTA provides.

Agric export challenges

Nigeria has a huge dearth of farmers with rudimentary skills and technical know-how to engage in international agric trade. Most of these farmers still depend on harmful substances to preserve their produces, which fall far below global best practices. Also, many non-oil exporters tend to take advantage of the unregulated export market to export products to other countries without necessary certifications.

 Although, the NEPC in its various sensitisation programmes always emphasise on the need for non-oil exporters to approach the council before they engage in export activities so that they do not get their fingers burnt, unfortunately, the penchant to cut corners is still persist and constitute a major factor responsible for the high level of rejection of Nigeria’s agro products in the international market. Hence, the need for the federal government to increase its level of engagement with farmers cannot be over emphasised.  

According to PriceWaterHouseCoopers (PwC), logistic challenges at the ports in Nigeria’s two major ports, Apapa and Tin Can ports that are responsible for processing the bulk of trading activities in the country have continued to impact on export and import activities.

It stressed that a survey conducted in 2018 showed that Nigeria lost about $10 billion on non-oil exports due to gridlock at the port. The gridlock has led to refusal by buyers to renew contracts and in dire cases, outright cancellation of contractual agreements. The consequences of the gridlock include escalation in haulage costs, reduction in export prices due to degradation in the quality of produce while on extended transit to the port and decline in foreign exchange accruable from non-oil exports.

Another bottleneck to export is lack of adequate storage facilities and poor distribution network, which have led to significant post-harvest losses on account of produce perishability. Poor distribution network of farm produce from the major food belts is equally hampering the quality and quantity of the nation’s agricultural exports.

With growing globalisation and increasing emphasis on the quality of agricultural products, which is benchmarked on international food safety procedures, it has become imperative for the Nigeria Agricultural Quarantine Services (NAQS) to put in place appropriate risk management measures and provide required guarantees on agricultural products leaving the shores of the country so as to avoid sour relationship with trading partners.

Federal Government’s role

Clearly, the present administration is not doing enough to checkmate the high level of rejection at the international scene. There must be conscious and deliberate efforts to stop this trend. Apart from losing so much money to failed agric export, the country also has its name to protect.

The federal government must as a result of urgency increase its level of engagement with the real actors of the sector to put Nigeria on the global stage for agric export. Access to finance is still a major factor hindering farmers’ productivity. The financial sector still perceive the sector to be a high risk sector to do business with coupled with the fact that the sector does not generate immediate return on investments. The need to establish a special window for genuine non-oil exporters to have access to funds for export business will not be out of place.

Secondly, the federal government must fund regulatory agencies saddled with the responsibility of ensuring and enforcing standards. Nigeria’s vast nature in terms of land size is one of the reasons why these agencies are overwhelmed as it would be very difficult for these agencies to carry out their enforce activities. Funds for logistics, technical building, laboratories for testing and certification should be made available to these agencies to bolster their operations across the country. Exporters have also vented their frustrations over the activities of some regulatory agencies hindering the export trade flow. These agencies should act business facilitators rather than business inhibitors the exporters lamented.

The federal government must also lay emphasis on value addition to boost the export competitiveness of Nigeria’s agro commodities this could be achieved through increased investment in innovation and technology.