Tuesday, May 15, 2012

Nigeria’s dismal performance under AGOA scheme

In 2000 when the United States government began the implementation of duty free access for products from Sub-Saharan Africa under African Growth and Opportunities Act (AGOA), there was tremendous excitement that a window had been opened for the countries to develop their non-oil exports for economic growth.

But over ten years into the scheme, that initial euphoria seemed to have become a forlorn hope especially for Nigeria’s non-oil export which performance under the scheme has been dismal. ROSELINE OKERE writes.

THE United States of America has come up with the U.S-Africa Export bill tagged: “The Increasing American Jobs Through Greater Exports to Africa Act”. With the new legislation,  exports from the U.S is expected to be more than double henceforth.

According to the U.S, the  AGOA scheme was intended to be mutually beneficial for both African and American entrepreneurs, but the focus of the administrations since its passage in 2000 has been on increasing African exports to the United States and the resultant job growth on the African continent.

The bill is aimed at achieving goals by taking several steps, including the creation of a U.S-Africa trade coordinator to ensure that all U.S agencies involved in trade work in concert with one another.

The legislation is also expected to mop up  less than 25 per cent of available U.S trade financing and  devoted to trade facilitation in the country.

Some have expressed concern that such an expansion of U.S. exports to Africa could flood African markets and damage their economies, especially Nigerian manufacturing sector, which is already competing seriously with imported products.

Although the AGOA scheme provides access for over 6000 African products, Nigeria is adjudged technically to be the largest exporter to the U.S, but this is mostly in the crude oil export.

If the United States succeeds in increasing its export by 200 per cent as it is  planning to do over the next decades, Nigerian manufacturing sector may be in for more challenges.

To ensure that Nigeria increase its export to the United States, the Nigerian Export Promotion Council (NEPC), recently organised a workshop in Lagos for exporters to asquint them of the opportunities available under the AGOA scheme and how to make their products more acceptable in the U.S market.

Speaking at the event, a representative of the U.S embassy, Roy Folley listed the U.S top exporter under AGOA to include South Africa, with $3.7 billion export under AGOA, Ghana, $454 million, Lesoto, $314 million, Kenya, $292 million, Cameroon,  $173 million, Mauritius, $169 and Namibia, $134 million.

But, NEPC said that Nigeria only managed to export $2.5 million (N400 million) to the United States under AGOA compared with the $33 million (N5.3 billion) of crude oil export in 2011.

Folley disclosed that sub-Saharan Africa non-oil exports to the U.S. have tripled from $1.6 billion in 2001 to $5 billion in 2011.

He listed some of the non-oil exports products to include apparel, certain footwear, automobiles and auto parts, leather products, sunglasses, glass fibers, salts, animal and vegitable fats, beverages, wines, fruit juices, coffee and tea extracts, cocoa paste and cocoa power.

Others are, cassava, vegetable, fruits, nuts, cut flowers, baskets, hats and essential oils.

Speaking on Nigeria’s poor performance with AGOA, the Director-General, NEPC, David Adulugba attributed it to the supply side constraints in terms of lack of adequate infrastructural development and access to finance by small-scale enterprises. “It is also observed that information on the documentary procedures for accessing the scheme has been very inadequate.”

According to him, a careful look at the bilateral trade profile between Nigeria and the U.S.A reveals that some of the non-oil export products being exported out of Nigeria to the U.S. do not benefit from AGOA trade preference.

“For example, under the agricultural trade, statistics show that while products worth $83.9 million were exported to the U.S in 2011, only $934,000 was done under AGOA and another $2.2 million under GSP provisions.  This shows that the balance of over $80 million worth of goods did not benefit from any preferential trade tariff,” he said.

To address this and bridge the information gap on the documentary requirements for AGOA exports, Adulugba said that the council has embarked on meetings with registered exporters of non-oil products to the U.S. to find out why their goods were being exported without benefiting from the AGOA duty free tariff rates, and sensitise participants on procedures required for the programme.

Nigeria AGOA Country Representative, Nigerian American Chamber of Commerce, David Aderibigbe, while speaking on ‘Documentation Procedure for AGOA Export’, emphasised the need for exporters to adhere to proper documentation before embarking on exportation to benefit from AGOA.

According to him, documentation of exports can be as important as the quality of the goods. “Faulty information or incomplete documentation can cause transport delays or hold things at the port entry.  Freight forwarders and buyers who import regularly can often provide assistance with shipment documentation.

According to him, trading across borders poses challenges such as complicated pricing calculations, keeping adequate documentation, accepting different methods of payments, communicating with greater variety of people.

He said that exporters assume greater risks than businesses that are carried out within their countries.

“They must also access and assess the buyer of their products, manage payments and comply with foreign market rules and regulations.

“The United States has different requirements for different types of imported food.  U.S standards are generally similar to those of the World Trade Organisation (WTO) and European Union, but more demanding for some products”, he said.


1 comment:

  1. is there something i can export with 100k.