Saturday, February 16, 2019

A Z of Export Business Financing Part 10

A Z of Export Business Financing Part 1



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Monday, February 11, 2019

AfCFTA Update: 5 More Countries To Go...Nigeria Will Be Left Behind


The African Continental Free Trade Agreement (AfCFTA) which was signed by a number of African countries in March, 2018 is almost set to take off. Out of the 55 countries in Africa, about 49 countries have signed the agreement already and out of the 49 countries, 17 of them have ratified and deposited it with the A.U commission and we have just 5 countries left to commence the implementation of the agreement because 22 countries are required to ratify the agreement before it fully takes effect on the African soil. 

This is the largest continental free trade agreement ever signed in the world and it is very sad to say that Nigeria’s government have refused to sign this agreement and thereby leaving Nigeria out of the proposed largest market in the world. The concerns of the Federal government of Nigeria is the issue raised by the Manufacturer Association of Nigeria (MAN) and some other organised private sectors which are not a strong position in the sense that issues raised are based on their ignorance of the details of the AfCFTA. This is because the agreement provides safe guards that are supposed to protect every country so they don’t become a dumping ground. 

The rule of origin in this agreement requires 60% input from member states and this is to ensure that goods from other continent outside Africa do not find their way into the Nigeria market. The concern of many is that Nigeria is the largest market in Africa and everybody is looking towards Nigeria and that is why MAN has refused to allow the government to sign the agreement.

If you take a clue from the free trade signed in West Africa, that is the Ecowas Trade Liberalisation Scheme (ETLS), Nigeria is the major beneficiary of this agreement in among the member states in West Africa. With this in mind, we can conclude that if Nigeria signs the AfCFTA, Nigeria would still be a major beneficiary of this agreement because the last episode of recession has woken Nigeria up to the fact that we need to begin to produce for export.  

We would like to call on the incoming government to make the signing of the AfCFTA a priority for so as to ensure the Nigerian business people are not left out of the biggest proposed largest free trade area in the world.

Bamidele Ayemibo
bayemibo@3timpex.com

Thursday, January 31, 2019

Product Profiles- Mica


Description: Mica is a naturally occurring mineral, based on a group of silicate minerals composed of varying amounts of aluminum, potassium, magnesium, iron and water having thin sheet-like or plate-like structure with different composition and physical properties. All Mica form flat six-sided monoclinic crystals with a remarkable cleavage in the direction of large surfaces, which permits them to be easily cleaved into optically flat films. When cleaved into thin films, they remain tough and elastic even at high temperatures. 

Occurrences: Mica minerals make some rocks sparkle! They are often found in igneous rocks such as granite and metamorphic rocks such as schist. They sparkle because light is reflected on their flat surfaces, which are where the mineral breaks along its plane of cleavage. These minerals break so easily along their cleavage that some crystals have broken into many thin layers that look like the pages of a little book. Colonial Americans used the “pages” of large mica crystals as glass for windows.

Types: Mica is also known as Muscovite, Biotite, Phlogopite, and Lepidolite
Muscovite, commonly known as white mica, is a member of the mica family of minerals.  The mica minerals all share the property of perfect basal cleavage, which means that layers of mica can be peeled off of a mica crystal in very thin sheets.  It is especially easy to peel off large numbers of paper-thin sheets from a muscovite crystal.  Consequently, crystals of mica, like the one shown above, are often referred to as books of mica.”(Roger Weller) Muscovite can be found in many colors such as white, yellow, silver, green and brown.
Biotite is also known as black mica.  It can be peeled off of a large crystal in thin layers but with more difficulty than peeling muscovite (white mica).  Biotite does not have economic value because it lacks the transparency and electrical insulating properties found in muscovite”(Weller). The typical black to brown color of biotite is characteristic although it is difficult to distinguish brown biotite from dark brown phologopite. Biotite and phlogopite are end members in a series that is dependent on the percentage of iron. Biotite is iron rich and phlogopite is iron poor. Biotite also has a layered structure of iron magnesium aluminum silicate sheets weakly bonded together by layers of potassium ions. These layers make the perfect cleavage. When biotite crystals are weathered they can appear to be what we know as “fool’s Gold”, a golden yellow mineral with a nice sparkle.
Phlogopite is a more rare member of the mica group not well known even by many mineral collectors. It has and still is being mined for its heat and electrical insulation properties, which are considered superior to other micas. Phlogopite, like all other micas, has a layered structure of magnesium aluminum silicate sheets inadequately bonded together by layers of potassium ions. These potassium ion layers produce the perfect cleavage.  Phlogopite is not considered a valuable mineral specimen.
Lepidolite is a new form of mica that has only been on the market in large quantities for only a decade. This newer form of mica is a lithium ore that forms only in granitic masses that contain an ample amount of lithium. Lepidolite may be found in many different colors ranging from violet to pale pink or white and rarely gray or yellow.

Locations: Mica can be obtained from the following area of Nassarawa state viz: Akwanga, Karu, Kokona, Toto, Nasarawa Eggon. Mica is also found in the following states of Nigeria viz: Bauchi, Benue, Borno, Kastina, Kebbi, Kogi, Ogun, Osun, Cross River, Plateau and FCT. 


Mica Specifications
·       Diameter--1/2 inch up
·       Quality requirements: Exportable Mica regardless of the type must be:
·       Dry
·       Clean
·       No sands
·       No stones
·       No mud or mud stain
·       Good tensile strength

Uses of Mica:

Mica can be used in many household products:
1.     It acts as a filler and extender. It provides a smoother consistency, improves workability and helps to prevent cracking.
2.     Also in the paint industry; ground mica is used as a pigment extender and facilitates suspension due to its lightweight anatomy. The ground mica also helps prevent shrinkage and shearing of the paint film, provides increased resistance to water penetration and weathering, and brightens the tone of the colored pigments.
3.     3 .     Sheet mica is mainly used in the electronic and electrical industries. Sheet and block mica are used as insulators in electronic equipment, thermal insulation, gauge “glass”, windows in stove and kerosene heaters, decorative panels in lamps and windows, insulation in electric motors and generator armatures, field coil insulation and magnet and commutator core insulation.
4.     4 .     Mica flakes are also used as snow in movies or for decoration. Also you can find mica in many of your personal care items such as toothpaste, eyeliner, concealer, nail polish, shimmer powder, lotions, lipstick, body wash, sunscreen, shampoo, conditioner, and hair dyes.


Where can Mica be Exported

The major export markets Mica is China. Other buyers next to china include India, Canada, Malaysia, Pakistan, Bulgaria and Australia.

Mica Export Price: Depending on the purity of the FOB price of Mica could vary from US200-300/MT.

Mica Local price: Depending on the purity and type of Mica, the local market price for Mica in Nigeria at the loading point could vary from NGN10,000-NGN15,000/MT


Nigeria Set To Loose over $215 million From New Minerals Export Regulation

The Ministry of Mines and Solid Minerals Development (MMSD) is almost set to implement an export regulation that will trigger the beginning of the end for minerals exportation in Nigeria. According to a newspaper report published on January 15, 2019, “the minister said that under the soon-to-be-released Mineral Export Guidelines, the lingering issue of evading payment of royalties or false declarations had been dealt with. According to him, all mineral exports shall henceforth be inspected by government-appointed independent pre-shipment inspection agents.”
This guideline was drafted without the input of the stakeholders which are the mineral exporters in Nigeria. The uproar from the stakeholders who got to know through other means lead to a public hearing last year. Despite the input from the practitioners, the MMSD has refused to make the recommended changes on the document. It is bent on going ahead to implement it at the detriment of the growth of the sector. The major focus of the ministry is to increase revenue by passing the royalty that are being evaded by the miners to the merchants who export theses products. 
The non-oil export sector contributions to the total export volume in Nigeria declined from about 12% in Q1 of 2018 to 3.6% in Q3. This is primarily due to the gridlock in Apapa. Instead of first putting pressure on all the stakeholders and working with them to resolve the issue in order to increase the export volume, it is sad that what MMSD is interested in is increasing the tax burden on the exporters who are currently incurring losses due to increasing delays, demurrage and debts. 
The new regulation will increase the timeline of exportation in Nigeria by 27days in addition to the current delay of about 3-4weeks needed to get your goods into the port. It will increase NESS fees from the current 0.5% to 2% of the FOB value for mineral exporters. It will pass the royalty fees from miners to merchants that are exporting the minerals. It will increase the logistics cost of the exporters because of the cost of moving the goods to the premises of the Pre-Shipment Inspection agents (PIA). It will also discourage funding by the commercial banks because the PIA will now take the custody of the goods for export and not the commercial banks that are funding the transaction. It will introduce additional documentation which will increase the export documentation to 11 as against the reduction to 7 which was done by the policy of the presidential enabling business environment and finally, it reduce employment opportunities in the sector by granting foreigners with tourists visa a license to buy and export minerals from Nigeria. 
The type of regulation Nigerian exporters needs right now is a policy that ensures that all goods being exported out of Nigeria are inspected by an agency of government at a designated location near the different ports in the country to ensure that the quality of the exported items are good enough to avoid rejection and boost the competitiveness of the Nigerian non-oil export sector. We do not need a regulation that makes worse the current precarious situation of the sector. 
We will like to finally call on the presidency to call the staff, consultant and the minister MMSD to order and halt their ignorant, inept and inimical plans to implement a new mineral export policy that is capable of plummeting to zero the over $215 million currently being realised annually from this sector.
For questions and clarifications, contact Bamidele Ayemibo on email via bayemibo@3timpex