A Brief on Exportation Challenges in Nigeria: What is the Way Forward?
Nigeria’s Ports serve as a gateway to support Nigeria’s economy. As we may already know, Nigeria is still a largely import-dependent nation and more than ever before, efforts need to be intensified to change the status quo. The Nigerian Export Promotion Council (NEPC) was established to promote the development and diversification of Nigeria’s export trade.
The opportunities available for exportation of our products are only best imagined. With the relatively high exchange rate, manufacturers who are serious about exporting their products have to source for the target market that brings the best opportunities. Many who are in this line of business are already counting their gains. Also, the inflow of foreign exchange into the country would strengthen the Naira, which has had several episodes of devaluation due to the instability of oil prices which is responsible for about 90% of Nigeria’s foreign exchange earnings. The ripple effect of exportation is the development of our local produce, thus reducing poverty and increasing the standard of living.
Examining the Challenges of Exportation & the Possible Solutions
- Revenue: In 2019, Nigeria’s total revenue from exportation was $10.4 billion. In 2016, a report by a top consulting firm projected that Nigeria’s economy could rise through the world rankings to top 10 in 2050 with a projected GDP of US$6.4 trillion, surpassing Germany, the United Kingdom, France and Saudi Arabia if Nigeria looks beyond its oil exportation. Increased exports over imports harness terms of trade and improve foreign exchange earnings.
There are various ways through which export expansion can generally contribute to increased economic growth. Export expansion can also accelerate the growth process by providing foreign exchange, which is required to procure capital goods and other intermediate goods that are needed to keep industries running.
- Sourcing for buyers: One of the challenges facing businesses that are seeking to export their goods is the lack of foreign customers. For example, Company A produces quality bags; when asked the reason for not exporting their products, the regular response is that they don’t have buyers.
The President, Lagos Chamber of Commerce and Industry (LCCI), Babatunde Ruwase said the Chamber adopted a generic theme tagged “Connecting Businesses, Creating Value” for the Lagos International Trade Fair, to underscore the importance of relationship and interactions among businesses for the purpose of wealth creation. He added that it was also to underline the value of interactions between producers and service providers; and the end-users.
Nigeria can host an exhibition in the United States of America where at least 100 Nigerian companies would attend. Also, NEPC should look into having such an exhibition to showcase serious minded Nigerian companies that have products to exhibit. International companies and individuals would be invited to partake in the exhibition. That way, Nigerian producers can reach their target market easily and foster a strong relationship to enhance the trade.
- Time: One of the major challenges of exportation in Nigeria is the cumbersome process involved in dealing with multiple agencies such as Nigeria Customs Service (NCS), Standard Organisation of Nigeria (SON), etc. The Former Finance Minister and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala tried to reduce the number of agencies at the ports to about three but was unsuccessful. However, the Federal Government announced its plans to establish a single window to address issues of time and other challenges affecting the transaction cycle in bringing in goods, clearing and exporting same, noting that the unveiling of a new national trade platform with single window for imports and exports in few months will help to address the challenges of trade in the country. The establishment of a single window will curb delay, corruption and lack of coordination among agencies which can kill exportation of businesses.
- Multi-modal Transport Solutions: Multi-modal transportation has to be effective in order to save time. Multi-modal transportation opens the corridor to good infrastructures like rail and good roads from the farms to the point of export. Even at the point of export, there is a need for good consolidation centers like providing refrigerators for perishable goods. A storage system is also needed to store the products before they are shipped out to the various local and international markets.
There is a lot of potential for non-oil exportation in Nigeria. This can only be harnessed with appropriate government policies and an enabling environment.
Nigeria could earn about $100 billion annually from non-oil export. What we need is an export revolution to be able to achieve that. If Nigeria broadens its export potentials, a positive chain of reaction will turn the key sectors of the economy around. Logistics play a major role in boosting non-oil export because if you have the goods and cannot get it out to the markets in good time it becomes a waste of effort. Logistics is key to achieve business growth, especially in exportation. Several bottlenecks need to be addressed before exportation of our products can thrive.
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