By Moses Ebosele, firstname.lastname@example.org —
Trade facilitation took the centre stage, in Lagos, on Saturday as key stakeholders brainstorm on challenges, existing modalities and gains recorded so far.
Speaking at the event, which forms part of the annual workshop of the Finance Correspondents Association of Nigeria (FICAN), the Nigerian Shippers’ Council (NSC) advised stakeholders to collaborate as part of measures to create the right environment for trade facilitation in Nigeria.
Participants at the workshop included the representatives of the Nigeria Shippers Council (NSC), Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), the Bank of Industry (BoI), United Bank for Africa Plc (UBA), Fideity Bank Plc, Nigeria Export and Import Bank (NEXIM), amongst others.
Addressing participants at the event tagged: “Boosting Domestic Capacity for Sustainable Export Earnings,” Adaora Nwonu, Trade Services Consumer Affairs Department, Nigeria Shippers Council (NSC), explained that trade thrives on cooperation, level playing field, conducive atmosphere, competition, uniformity of rules, among others.
Nwonu noted that ongoing seaports digitalization is at 68 per cent, adding that stakeholders should support the process.
According to Nwonu, plans are underway to introduce the National Single Window, which is an electronic platform to which all stakeholders in the port system will be connected and which is bound to check all forms of challenges.
Also at the event, the Central Bank of Nigeria (CBN) explained that its RT200 policy has begun to attract more commodities into the Nigerian export ledger.
The RT200 FX programme is an initiative of the CBN that aims to raise $200 billion in forex earnings from non-oil proceeds over the next three to five years. A major anchor of the programme is the Non-Oil Export Proceeds Repatriation Rebate Scheme.
Explaining further, the Principal Manager, Trade and Exchange Department, CBN, Mrs. Anne Nnenna Ezekannagha, said: “RT200 is an initiative that was launched by the CBN and is currently, anchored on our rebate scheme. So, the idea is that we want to encourage exporters to repatriate their funds. A lot of exporters do not repatriate their funds and the RT200 is to encourage the repatriation of non-oil proceeds.
“We have seen a significant improvement not just in the figures that are being repatriated, but also in the number of exporters that are willing to come to the formal sector. Because a lot of our export has been happening informally, but with this scheme, we have found that a lot more players in the export sector are willing to come to the formal sector.
“So, we are also noticing not just the increase in the figures but also in the increase of the commodities that we are exporting that was reported earlier. Like the solid minerals, we are seeing more in the solid minerals and we are seeing more players in that sector, coming into the formal sector to report their exports and participate in the RT200.”
In his submission, the Deputy Managing Director, United Bank for Africa (UBA), Mr. Muyiwa Akinyemi, said 200 exporters accounted for 95 per cent of the $4.2 billion Nigeria earned from non-oil export in 2021.
He expained that the $4.2 billion recorded in 2021 did not include informal exports largely in the wholesale trading in some sectors such as information technology, entertainment and solid minerals.
Explaining further while presenting his paper titled “Boosting Domestic Capacity for Sustainable Export Earnings- the UBA Perspective, Akinyemi said: “Top 200 non-oil exporters control over 95 per cent of the $4.2billion of the industry volume in 2021.” He added that the federal government had projected to increase foreign exchange earnings from non-oil to $200 billion within three to five years.
He added:“Major items of non-oil exports including cocoa, cashew, sesame seeds, hibiscus, fertilisers/chemicals, tobacco, hides and skin accounted for 85 per cent of total export.”
Akinyemi stated that the UBA “facilitated $1.34 billion (31 per cent) in non-oil export volume in 2021,” saying that the feat confirmed the UBA’s status as Nigeria’s number one export bank for three years running.
Earlier in her keynote address, the Managing Director of Fidelity Bank, Mrs. Nneka Onyeali-Ikpe, urged Nigerian commodities exporters to switch to the export of value-added processed commodity items to earn more foreign exchange and improve Nigeria’s balance of trade.
Onyeali-Ikpe said transitioning to value-added exports would provide immediate revenue uplift even without expansion of the primary commodity supply side.
She said a step forward was to move from cocoa beans to cocoa butter or powder and also move from raw cashew nuts to kernels, to triple the foreign exchange revenues Nigeria earns from these commodities.
According to her, “most of our raw cashew nut exports go to Vietnam where more value is added to it and then re-exported. In 2020, Vietnam imported $1.5 billion worth of raw cashew nuts from Africa, added value to them and exported $3 billion worth of processed kernels. The uplift of $1.5 billion represents jobs and tax revenue opportunities that we could have created if this value addition was done in Africa.”
Represented by a Divisional Head in Fidelity Bank, Mr. Isaiah Ndukwe, Onyeali-Ikpe, said: “At three times increase in revenue, Nigeria can move cocoa exports to $3 billion per annum (currently about $1 billion) and cashew to $600 million (currently about $200 million) in the short term to medium term. “If we then double the capacity of our plantations as well as processing capacity, we can exponentially move the numbers.
“This is not a reinvention of the wheel; it is a tried and tested lever for sustainable economic development. This is the same model that was used by the Association of South-East Asian Nations (ASEAN) i.e. Malaysia, Indonesia, Thailand and Vietnam to transform their economies into global manufacturing powerhouses.”
The Director General, Securities and Exchange Commission (SEC), Mr. Lamido A. Yuguda, noted the Nigerian capital market had a significant role to play in contributing to the country’s sustainable foreign exchange earnings by attracting more foreign portfolios and direct investments.
Represented by Director, Lagos Zonal Office, SEC, Mrs. Hafsat O. Rufai Yuguda said the 10-year Nigerian Capital Market Master Plan (2015-2025) was built around four strategic themes, one of which is to “promote competitiveness by establishing practices that improve transparency, efficiency and liquidity and to attract sustainable interest in the capital market from domestic, as well as foreign investors and participants.”
He regretted that over the past fifteen years, foreign transactions in the Nigerian exchange decreased by 29.38 per cent from N616 billion to N435 billion. In 2021, total domestic transactions accounted for about 77 per cent of the total transactions carried out in 2021, whilst foreign transactions accounted for about 23 per cent of the total transactions in the same period.
“These are not the kinds of statistics we want, but they have been brought about by sustained forex illiquidity concerns which have resulted in many foreign investors pulling out of the Nigerian market, leading to the decline in foreign participation in the equity market.
“But we believe that implementation of the roadmap for vibrant commodities trading ecosystem in Nigeria by the commission will support the development of the agricultural sector and diversification of the Nigerian economy and ultimately, advance the country towards attaining sustainable foreign exchange earnings.”
In his welcome address, Chairman of FICAN, Mr. Titus Nwokoji, emphasised the need “To optimise and sustain growth in the non-oil sector so that it can contribute significantly to government revenue rather than solely to GDP growth, consistent and supportive export promotion policies that will improve the business operating environment as listed below are required.”