Tuesday, September 5, 2017

Enhancing Capacity For Non-Export Growth

To grow the non-oil Export volume in Nigeria, all I think the government need to do is to focus on 5 objectives and areas of growth and this will naturally result in the ultimate goal of growing the export volume. These objectives should include growth in:

The number of Exporters
The number of Exportable Products
The number of Export Markets
The number of Funding options and programme
The number of Successful Export projects

To achieve the desired growth in these areas. I have put together what I call the 10 cardinal recommendations and these include:
1.    Product Development
2.    Market Development
3.    Capacity Development
4.    Infrastructural Development
5.    Legal Frame work
6.    Funding Programme
7.    Quality Control
8.    Government support - beyond EEG
9.    Publicity of government export support programme,
10.  Model exportation

 1. Product Development
To ensure effective product development for exportation in Nigeria, the government need to do the following:
Ø  While we thank NEPC for 13 strategic export products, there is need to train Nigeria on how to export these products.
Ø  Get the SME exporters to begin to focus on value addition.
Ø  Give incentives (like tax holiday) to exporters with valueadded products.
Ø  Organise an event that will bring different SME agro processor together in a fare
Ø  Setup a panel to select best products & support them for exportation
Ø  Create a hub to develop clusters of SMEs with selected exportable products in Nigeria
Ø  Setup a one stop shop for effective product development to support exporters at NEPC
Ø  Conduct regular research on market potentials for different products and make them known to the public via regular publications

2. Market Development
To ensure effective market development for exportable products in Nigeria, the government need to do the following:
Ø  Regularly publish the upcoming trade mission and support exporters with relevant products to attend.
Ø  Provide information on best market entry options in different countries and for different products.
Ø  Organise a trade show in Nigeria and invite the world to showcase all that Nigeria have in stock for the export market.
Ø  Support the advertisement of the Nigerian SME products abroad.
Ø  Partner with Export Management Companies (EMC) in different countries to help the Nigerian exporters to:

·         Source for different buyers abroad
·         Supervise quality inspection upon arrival of goods abroad
·         Follow up on payment
·         Act as the case of need in Bill for Collection transaction
·     EMC service charge are to be borne by the exporter

3. Capacity Development
To ensure effective development of capacity of the SME Exporters in Nigeria, the government need to do the following:
Ø  Organise continuous training in different areas of export trade (quality control, packaging, labelling, documentations, marketing, costing, pricing etc.)
Ø  Setup an Export Mentoring Programme by connecting the intending Exporters to experienced Exporters.
Ø  Organise regular enlightenment round the country to show Nigerians in every state not just what they can export from their state, but rather how they can get started as soon as possible.
Ø  Ensure that the training should also cover business development training like:
·         business ethics
·         business vision and mission statements
·         great values that sustains businesses
·         customer service
·         logistic management

4. Infrastructural Development
To ensure effective development of infrastructures that will support export business in Nigeria, the government need to do the following:
A lot of collaboration is needed to help alleviate the challenges of infrastructural deficits (besides power and rail which requires huge funds). The government should setup a Public Private Partnership (PPP)arrangement in collaborate with:
Ø  FAAN to build cold storage systems at the internationalairports
Ø  Logistics firm to invest in cold storage van and subsidise the movement of perishable from the farm gate to the Airport
Ø  Real estate firms to lease warehouse for inspection and sampling of solid minerals and agricultural commodities before exportation
Ø  Institute of packaging to setup world standard packaging firm that will produce good package, with reasonable quantity at affordable cost.
Ø  Inspection agents to setup ISO certified labs for accurate test results.

5. Legal Frame work
It is very important to state here that, when I say government, I don't mean NEPC but rather the relevant government agencies saddled with such responsibility. In my opinion, I think NEPC should just coordinate because of the law that set them up. However, I will strongly recommend that NEPC act be amended (especially section 4 covering its functions and 5 which cover its powers) to enable them:
·         Carry out a model exportation projects to and use this to practically train the Nigerian exporters
·         Authorise the clearance of any goods meant for exportation in Nigeria
·         Work with the export inspections agents to ensure that clean certificate of inspections are not issued for low grade goods
·         Work with customs in order to ensure that low grade goods (especially those without clean certificate of inspections) are not cleared for export
·         Work with quarantine and federal produce to ensure that no low grade Agro commodities are exported
·         Initiate disciplinary actions against erring government officials through the head of service
·         Initiate a legal action against Exporters and any officer (of inspection agent, custom and the staff of other relevant agencies) that inspect goods that were eventually rejected at the port of discharge

6. Funding Programme
The federal government  should enact a law that will enable individuals to establish banks that will fund SME exporters in Nigeria.
Ø  The banks should be given incentives based on the loan portfolios they disbursed to support the growth of SME exporters
Ø  The facilities should include both pre and post export financing options
Ø  An evidence of at least 2 successful shipment of a particular product to the same exporter should be the minimum criteria.
Ø  These banks should be able to give export financing loan that is as low as N2million
Ø  Government should to seek out overseas agency that can provide trade finance instruments like guarantees and SBLC to support the funding of non-oil exporters in Nigeria. A good example is the Payment guarantees offered by IFC under the Global Trade Finance Programme (GTFP)

7. Quality Control
This will require a lot of collaboration among all the relevant agencies of government. Instead of focusing only on educating the farmers and exporters only, I will rather recommend that an inter-ministerial committee be set up to collaborate with:
Ø  FPIS to set minimum standards for Agro commodity export
Ø  SON to set minimum standards for Solid mineral export
Ø  NAFDAC to set minimum standards for drugs and processed Food export
Ø  SON to setup labs for product testing
Ø  Quarantine to set minimum standard for fruits & vegetable export
Ø  NSPRI to setup standard practice for stored products
Ø  Custom to enforce and authenticate quality documentation and not just NXP
Ø  Export Inspection Agents to enforce standards at the ports

8. Government support - beyond EEG
It is sad to know that the government is planning to commence EEG again despite the frauds that bedevilled the scheme in the past.
Many nations (especially in Asia) that have gotten export right especially food export have had to subsidise a lot of things for their SME exporters. The focus of the government should be on pre-export incentives to ensure effective monitoring of what the government is supporting. These incentives should cover:
Ø  Subsidies for air shipment to make export of our perishable more competitive
Ø  Subsidies for warehousing & cold storage facilities at loading and destination port
Ø  Subsidies for packaging design and production
Ø  Subsidies for the advertisement of Nigerian SMEs products abroad
Ø  Subsidies to support the attendees of more trade fare abroad
Ø  Setting up of an effective export trade facilitation unit at the Nigerian embassies abroad through the federal ministry of foreign affairs

9. Publicity of government export support programme
A company with a fantastic product but refuse to promote it is like a guy winking at a lady in the dark. We complain that government is doing nothing at all because some of the agencies have refused to make known to the public all that they are doing to support non-oil export. Government agencies need to constantly create awareness about the work they are daily doing in the non-oil export sector in Nigeria. There is need for a regular radio and TV programme to enlighten the public on these programme. My organisation in conjunction with the LCCI will be willing to do this for FREE for NEPC and other government agencies.

10. Model exportation
The government will be limited in the level of value it can add to Nigeria exporters if all that its staff knows is the theory of exportation in Nigeria. I will like to strongly recommend that NEPC should collaborate with the relevant government agencies and start exporting different Nigerian products abroad in order to build its internal capacity via experimental and trial shipment and therefore:
Ø  show the exporter a practical way to be successful in the export business
Ø  create models for the Nigerian exporters to follow
Ø  finding new paths to the successful exportation of different products
Ø  identify the challenges of different export products and how to overcome them
Ø  identify the challenges of different export markets and how to overcome them

In conclusion, If we want to grow;
Ø  The number of Exporters
Ø  The number of Exportable Products
Ø  The number of Export Markets
Ø  The number of Funding options and programme
Ø  The number of successful export projects in Nigeria
I strongly believe the implementing these 10 cardinal recommendations is the way go

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