Thursday, September 19, 2019

AfCFTA Implementation Strategies-Part-10: The Coordination

I am glad to announce that this is the tenth and therefore the last in the series of this ten part article on the AfCFTA implementation Strategies. This edition of the article will be focused on Coordination. The implementation committee must develop a strategic vision and goal that they want to achieve using the AfCFTA. This should be divided into objectives which are small goals that lead to the ultimate goal when combined. They should also come up with the strategies for the achievement of each of the goals. Based on these various strategies, a well thought out plan for implementation should be put in place and finally, the committee should then break the plans down into step by step daily activities that will lead to the fulfilment of its goals. These are the tools to be used by the implementation committee to coordinate the successful and sustainable implementation of the AfCFTA 

I strongly believe that the implementation committee must coordinate the development of a vision and a set goal. The goal will give the committee a direction so it can measure its progress. For example, according to the world top export, Nigeria exported goods worth $52.9 out of the total African export of $476.6 in the year 2018. This constitutes 11.01% of the total exportation out of Africa. The committee can then use this to develop a vision to contribute 25% of export volume of Africa in the next ten years and set a goal that will drive all its programmes and activities in the implementation of AfCFTA. This Vision and its implication on business expansion, production capacity, job creation, poverty eradication, impact on the Gross Domestic Products and per capita income should be made clear to the business communities. 

Secondly, the AfCFTA implementation committee should also define the objectives that will be used to coordinate and properly direct the focus of the AfCFTA implementation for the maximum impact. These objectives are smaller goals set for each of the sub-sector of exportation and these should be done in such a way that they add up to culminate in the ultimate goal that was set in the first place. To define the objectives, the ultimate goal or target should be shared across export of Manufactured goods, Agricultural commodities, Minerals and Services. This sharing formula should be based on the current annual export volume and contribution of these sub-sectors vis a vis the expected impact of what the government is planning to do. The committee might need to set up a subcommittee among its members to enable them work closely with the stakeholders in the various sub-sectors, identify their challenges and collate all their feedbacks and then use this to formulate policies that will be recommended to the implementation committee for their necessary action. 

The third thing to be coordinated by the implementation committee are the strategies to be deployed to achieve each of the set objectives. This should be done by the subcommittee created within the AfCFTA implementation in conjunction with the private sectors representative outside the AfCFTA committee. The strategies might vary from one sub-sector to the order based on the peculiarity of the challenges that are currently being faced in each of the sub-sector. One strategy that must cut across all the sub-sector is the strategies that will enhance competitiveness. The last competitive index report showed that Nigeria is least competitive among all the top five economies in Africa. This will mean that the probability that products manufactured in Nigeria, Agricultural commodities cultivated in Nigeria and Minerals mined in Nigeria, will be more expensive than those from other African countries will be very high. The strategies must also include how to effectively communicate AfCFTA to all the stakeholders especially exporters and the boosting of production capacity of the various export sub-sectors in order to be able to meet likely increase in demand from the African countries under the AfCFTA.

Having mapped out the strategies tailored towards the achievement of the objectives in each of the export sub-sectors, the next thing is to put together the implementation plan. This should also be done by the subcommittee created within the AfCFTA implementation in conjunction with the private sectors representative outside the AfCFTA committee. The plan should include the action steps for the implementation of the various strategies with timelines. The planning should answer all the necessary questions that must be answered in the implementation of the strategies and this should include the what, the who, the where, the which, the why, the when and the how to implement the strategies. A monitoring and evaluation mechanism should also be put in place so as to regularly get feedback and make necessary adjustments and interventions in a timely manner. 

Finally, I am very glad to have come to the end of this ten-part series of articles on the AfCFTA implementation strategies. I will like to remind my readers that if we do not do the work, the AfCFTA will not work for us. Some countries have already started considering the establishment of a whole agency of government that will be in charge of the AfCFTA and others are setting up different structures to make it a success. I hope that it will be a success also in Nigeria if we can increase and sustain the tempo. It is my hope that the implementation committee of the government will adopt some of the recommendations that are been prescribed in this article in order to make the implementation of the AfCFTA create the necessary jobs that will lift out of penury, the tens of millions of Nigeria that are currently living below the poverty line. 

For the love of Nigeria, Africa and Mankind.
Bamidele Ayemibo (bayemibo@3timpex.com)
Lead Consultant at 3T Impex Trade Academy

Thursday, September 12, 2019

AfCFTA Implementation Strategies-Part-9: The Collaborations



The is the second to the last article in this ten-part series of articles on the AfCFTA implementation Strategies. This edition of the article will be focused on Collaborations. This collaboration has to be in three forms in order to be able to effectively and successfully implement the AfCFTA for the benefits of Nigerians. The first form of collaboration has to be between the public sector and organised private sector in Nigeria. The second form of collaboration has to be between the organised private sector in Nigeria and the relevant organised private sector in the export market. The third form of collaboration has to be between the public sector in Nigeria and the public sector in the export market. Since all these collaborations cannot happen at once, that means the government must work with the private sector to fashion out the country and product to target per time (this can be per quarter or per month). 

Some of the private sector organisation should include but not limited to the representatives from National Association of Chamber of Commerce Industry Mines and Agriculture (NACCIMA), Bankers Committee, National Association of Small and Medium Scale Enterprise (NASME), Nigerian Association of Small Scale Industrialist (NASSI) and Manufacturer Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI), Southeast Chamber of Commerce, Abuja Chamber of Commerce and Industry (ACCI), Kano Chamber of Commerce, Kaduna Chamber of Commerce etc. 


The first and one of the most important collaboration is that between the public and organised private sector in Nigeria. This collaboration should be driven by the implementation committee since both representatives of the public and private sectors are present as members of the implementation committee. The essence of this collaboration is to enable the implementation committee to share ideas and strategies with organised private sector. This will enable the government to sample opinions on the implication of the steps they are about to take regarding the AfCFTA. It also affords the government the opportunity to hear from the operator first hand regarding the challenges being faced in the sector. As a matter of fact, this collaboration enables the government to also get feedback and therefore get to know why some of its policies are being circumvented and therefore not working as originally intended. 

From the previous edition of these series of Articles, it was clearly stated that one of the reasons for the failure of free trade agreement around the world is lack of information about profit, plans, paperwork and processes involve in enjoying the benefits of the programme. This public and private sector collaboration therefore will make it possible for governments and the implementation committee to be able to properly disseminate the necessary information to the private sector. This can be done via a monthly meeting of both parties and the signing of a memorandum of understanding that highlights the obligations of both parties. 

The second form of collaboration being suggested for the proper implementation of the AfCFTA is the collaboration between the organised private sectors in Nigeria and relevant private sector organisation in the export market. For a start, in the first year of commencement of trading under the AfCFTA, the organised private sector in Nigeria under the umbrella bodies like NACCIMA, can startup the collaboration efforts by forming an alliance with umbrella bodies of private companies in the top five economies in Africa which include South Africa, Algeria, Morocco, Egypt and Angola. This is because, these are not just the largest economy in Africa, they are also the largest importers of different products into the continent of Africa. 

On the other hand, the NACCIMA can decide to choose the countries to form alliances with based on those that currently import products that Nigeria produce in large quantity from outside the continent. This collaboration should involve the signing of a memorandum of understanding that clearly states the obligations of both parties. The objective of this collaboration should be to exchange information relating to market intelligence reports of different sectors. Also, to have a regular business to business meeting in order to get buyers, sell franchise, give license to produce, form a joint venture, establish a presence through partnership with an agent, merchants, distributors etc at the destination market 

The third and the last form of collaboration is a very strategic one between the public sector organisation in Nigeria and public sector organisation in the export market. This should be done through the establishment of a commercial attaché (more like a trade desk) at the Nigerian embassy in the export market. This collaboration should involve the signing of a memorandum of understanding between ministry of trade or foreign affairs of both countries and this agreement should clearly state the obligations of both parties. The objective of this collaboration should be the exchange of information on the government policies and procedures for the importation of products into both countries. This should cover pre and post import documentation, exchange control regulation, quality specifications, quality certification, quality control measures at the port, licensing and quota requirements, company incorporation requirements, import prohibition etc. This should also include the needs and supply gap of the economy in terms of raw materials, foods and manufactured goods. All the export market information obtained via this collaboration should be disseminated to the organised private sector through the implementation committee. 

Finally, I will like to say that, the objectives of the three collaboration stated in this article are not exhaustive. They are recommendations that could give the implementation committee a thrust in putting together its strategies. I will also like to state that the AfCFTA has given Africa an opportunity to rewrite its history and become the destination that everyone wants to go for business growth and career advancement. However, we must be ready to do the work required to make this a reality. It is my hope that the implementation committee of the government will adopt some of the recommendations that are been prescribed in this article in order to make the implementation of the AfCFTA create the necessary jobs that will lift out of penury, the tens of millions of Nigeria that are currently living below the poverty line. 

For the love of Nigeria, Africa and Mankind.
Bamidele Ayemibo (bayemibo@3timpex.com)
Lead Consultant at 3T Impex Trade Academy

Wednesday, September 4, 2019

AfCFTA Implementation Strategies-Part-8: The Cooperation

This is the eight in the series of ten parts articles on the AfCFTA implementation Strategies. This edition is focused on Cooperation. One of the factors that has hindered the growth of exportation in Nigeria and consequently militating against the utilisation of free trade agreement signed within the ECOWAS region is lack of cooperation among the ministries, departments and agencies (MDAs) that are involved directly or indirectly with exportation of goods out of the country. This was the reason why I recommended in the part one of these series of articles that, the members of the implementation committee should be drawn from various agencies of government that are rendering one service or the other to exporters. 

For the sake of clarity, the agencies of government that must work together for the successful implementation of the AfCFTA for the benefits of Nigerians should include but not limited to the following: Nigeria Export promotion Council (NEPC), Nigeria Custom Service (NCS), Standards Organization of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC), Federal Ministry of Foreign Affairs, Federal Ministry of Industry, Trade and Investment, Presidential Enabling Business Environment Council (PEBEC), Small and Medium Scale Enterprise Development Agency of Nigeria (SMEDAN), Federal Produce Inspection Service (FPIS) Nigeria Agricultural Quarantines Service (NAQS), Federal Ministry of Transportation, Central Bank of Nigeria (CBN), Nexim Bank and the Nigeria Office of Trade Negotiation (NOTN). 

These agencies are critical to the successful implementation of AfCFTA because they are involve in rendering support services in the area of export promotion, documentation and clearance of goods for export, quality assurance of foods, drugs and manufactured goods, processing of certificate of origin, administration of subsidies and export incentives, issuance of export guidelines and documentations, championing the course for the ease of doing business in Nigeria, handling and shipment of goods from the ports and terminals, administration of the application form for exportation, provision of cheap source of funding for manufacturing and exportation. All these are critical elements in the export value chain. If any of these MDAs weakens the a link in the chain, it reduce further the already low competitiveness of the Nigerian exporters.

The lack of cooperation among the agencies of government has manifested in many ways in the past. This had made all the efforts of the MDA driving any initiative to solve a problem in the export sector to proof abortive. For example, the CBN wanted to ensure that all goods leaving the country go out through the legal means of NXP documentation. This is to ensure that the proceeds of the exported items are repatriated to grow nation's foreign reserve. However, the NCS does not seem to be interested in this policy of CBN because data obtained from international organisation shows that goods are leaving Nigeria via the sea without documentation and this could only have been possible because the NCS allowed it. Another example is seen in the regulation of NAQS that expects that any commodity leaving Nigeria requires inspection and issuance of phytosanitary certificates but these commodities are leaving the country without this certificate and sometimes using fake NAQS certificate and these goods are are approved to be loaded on the vessel and allowed for shipment.

A more recent example that I personally witnessed is a situation where NEPC is organising solo exhibition in Cote D’Ivoire and already agreed with the Nigerian Embassy in that country, the kind of support that is required from them. However, it is sad to note that the Nigerian Embassy In Cote D’Ivoire withdrew from being part of the programme few days before the event because of personal issues relating to funds with the consulatnt on ground and thereby causing delay in clearing the goods to be used for the exhibition. They also wrote the private and government agencies in Cote D’Ivoire that they are no more part of the event which led to the low turn out of visitors at the event. There are so many other examples that shows rivalry and battle of supremacy among the government agencies which negatively affects the businesses they are supposed to serve.

In order to foster the required cooperation among the various government agencies and also, as a matter of commitment to AfCFTA on the part of the government, I will like to recommend that the president should nominate a minister to be the AfCFTA Champion. The AfCFTA Champion should naturally be the Minister of Industry Trade & Investment or as the president may deemed fit. He should be mandated to work with all the head of other ministries, departments and agencies that are involved in exportation to nominate a Director who will be the AfCFTA Driver in these MDAs. The minister who is the AfCFTA Champion together with the AfCFTA Driver at the MDAs should be part of the AfCFTA implementation committee. This is to ensure that all the plans of the committee are adequately communicated to the MDAs that are responsible for the implementation.

It is also very important for the implementation committee to clearly define the job description of the AfCFTA Drivers in all relevant MDAs and also work with the head of service to put in place a punitive measure that will ensure that any AfCFTA Driver that is not living up to expectations is disciplined and also replaced where necessary.

Finally, I will like to say that, if we want to enjoy all the benefits embedded in the AfCFTA, then we have to do the work. This is because, this free trade agreement will not work for any country that is not ready to do the work. It is my hope that the implementation committee of the government will adopt some of the recommendations that are been prescribed in this article in order to make the implementation of the AfCFTA create the necessary jobs that will lift out of penury, the tens of millions of Nigeria that are currently living below the poverty line. 

For the love of Nigeria, Africa and Mankind.
Bamidele Ayemibo (bayemibo@3timpex.com)
Lead Consultant at 3T Impex Trade Academy

Monday, August 26, 2019

Nigerian States Are Billionaires in US Dollars-Part-74-Export Driven Youth Employment & Income Generation Potentials of Zamfara State


AfCFTA Implementation Strategies-Part-7: The Commitment

This is the seventh in the series of ten parts articles on the AfCFTA implementation Strategies. This edition is focused on Commitment on the part of the government. The commitment of the president and all the government agencies are very critical element in the implementation programme. This needs to be demonstrated to the private sector in order to encourage them to invest their time, energy and money to take full advantage of the AfCFTA. To demonstrate this commitment, the presidency needs to put this in the front burner in all the activities of the president by mentioning it in all his economic related speeches at different functions and programmes he attends within and outside the country. This will make his ministers to be able to give the required support to the AfCFTA implementation committee and therefore ensure that their ministry, departments and agencies are not a clog in the wheel of progress of the AfCFTA.

I strong believed the first step that the government needs to take as a way of demonstrating commitment towards the AfCFTA is the appointment of a Special Assistant (SA) on Trade Across Borders who will work directly with the AfCFTA implementation committee by attending all their meetings, presenting their requests to the presidency and liaising with the various heads of ministries, departments and agencies to get the necessary cooperation and approvals. This special assistant is going to be a critical success factor in the implementation of AfCFTA because it will speed up the submission and approval of request at the presidency due to the fact that he is on ground to represent the implementation committee and follow up on the government for necessary approvals.

Secondly, the government have to demonstrate its commitment towards the implementation of AfCFTA by making deliberate policies that will encourage the exporters to want to export to African countries. This can be done through executive orders and acts of the parliament. Going by the timetable of the AfCFTA secretariat, the trading under this agreement will commence from August next year. That means the government have an ample time on its hand to put in place the right policies that will support the implementation of the AfCFTA. 

One of these policies must include incentives. Considering the high level of infrastructure deficit that any business operating in Nigeria has to contend with and the attendant increase in the cost of doing business that ensue, the government must of necessity put a system in place to give incentives to exporters. These incentives should come in the form of single digit loan for all exports going to Africa countries under the AfCFTA, rebate on air and sea freight, warehousing, local transport, duty on importation of raw materials and other statutory taxes. This is to ensure that Nigerian products are competitive in the African market. There should also be a deliberate policy towards the setting up of dedicated AfCFTA export terminals at major ports across the country. This is to ensure that goods being shipped under this scheme are examined for compliance and also given speedy clearance.

One of the major challenges being faced by the ECOWAS Trade Liberalisation Scheme (ETLS) which has consequently led to the low utilisation of the scheme is the inefficient processes that exporters need to go through in order to get the certificate of origin that makes their products eligible for the duty free access under the ETLS. In order to demonstrate its commitment to the successful implementation of the AfCFTA, the government needs to ensure that the process of obtaining the certificate of origin under the AfCFTA is fully automated, streamlined with paperless documentation, an online platform for tracking and feedback on the progress of application, devoid of any form of human interaction besides the visit to the production facility to ascertain the claim of the criteria for the rule of origin.

Also, it is very important to state that one of the factors that could prevent Nigeria and Nigerians from enjoying the benefits of AfCFTA is product quality issues. The committee must demonstrate its commitment to prevent the exportation of low quality products under the AfCFTA by ensuring that it closely works with the relevant government agencies at the port, especially the Nigeria Customs Service, to ensure that all goods to be shipped under AfCFTA are routed via the AfCFTA designated terminals where they will be inspected for quality assurance before they are shipped to final destination on the African continent. Another way of demonstrating commitment to the successful implementation of the AfCFTA in  Nigeria is putting in place a policy that ensures the participation of the private sector in the Monitoring of items that are being imported into the Nigerian markets duty free under AfCFTA. There should also be punitive measures put in place to ensure that any government agencies or individuals that is aiding and abetting unwholesome practice that will undermine the efforts of the AfCFTA implementation committee is brought to book.

What is the use of all the effort being deployed by the government and the implementation committee if the manufacturers cannot get to promote their products in other African countries simply because of the cost and logistics challenges? The government have to demonstrate its commitment to the AfCFTA by organisation solo exhibition in different countries on the African continents by partnering with Chambers of Commerce in the destination countries and also supporting Nigerian businesses with funds needed to participate in these various promotional programmes 

The areas of commitment described in this article are not exhaustive but are very critical and therefore worthy of consideration by the AfCFTA implementation committee. It is my hope that the implementation committee of the government will adopt some of the recommendations that are been prescribed in this article in order to make the implementation of the AfCFTA create the necessary jobs that will lift out of penury, the tens of millions of Nigeria that are currently living below the poverty line

For the love of Nigeria, Africa and Mankind.
Bamidele Ayemibo (bayemibo@3timpex.com)
Lead Consultant at 3T Impex Trade Academy

Thursday, August 22, 2019

Nigerian States Are Billionaires in US Dollars-Part-70-Export Driven Youth Employment & Income Generation Potentials of Rivers State


Nigerian States Are Billionaires in US Dollars-Part-69-Export Driven Youth Employment & Income Generation Potentials of Plateau State


AfCFTA Implementation Strategies-Part-6: The Capacity

This is the sixth in the series of Articles on AfCFTA implementation strategies and the focus of this edition will be on Capacity building. No matter what the government is doing to get Nigerians to benefits from the AfCFTA, if the capacity of the business people are not developed to effectively manage and grow the export business, everything being done by the government would be a waste. The necessity of capacity building has been demonstrated by the fact that hundreds of new businesses get registered with the Nigerian Export Promotion Council (NEPC) to get the export certificates that makes them eligible to export every year, but the number of exporters that ship goods out of Nigeria every year has remained below one thousand in the last ten years. The question is, why is the number exporters and the volume of export not growing despite the increase in the number of registered exporters?  It is due to the lack of capacity on the part of the exporters to successfully do the shipment. 

Research has shown that a number of FTAs around the world have failed to achieved its objectives in some of the member countries because of the deficiencies in the export business management skills among the business people, especially the SMEs. One of the pivotal goal of the AfCFTA is to create jobs among the member states. This will achieved via the increased market demands which leads to increased volume of production and consequently leading to the need for increase in manpower. The impact of AfCFTA can only be felt by an average Nigerian on the street if the businesses are supported to develop the capacity to overcome the 5Ps of export business challenges and these include Products, Purchaser, Pricing, Paperwork and Payment. 

First of all, there is need for capacity building in the area products that can be exported to African countries and this should be based on what they currently import from other parts of the world. This should also include the quality specifications requirements of the different countries and what makes the products eligible for shipment within Africa under the AfCFTA. Our preliminary research at 3T Impex Trade Academy revealed that there are currently about 90 products that Nigeria can export to other countries in the in Africa based on what these countries currently import from nations in other continents of the world. As a matter of fact, publishing the list of these eligible products with their market potentials and using the organised private sectors to reach the manufacturers of these products in order to be able to engage them and get them to attend sector specific capacity building will be a good strategy.

The second area of capacity building for the manufacturers is the development of skills required to get purchasers abroad. It is one thing to have buyers all over the African continents, it is another thing to be able to get the buyer to buy from you. Capacity building areas with respect to getting purchasers should include but not limited to the following areas: international marketing, market entry strategies, product packaging, contract negotiations. It is a general belief among many exporters that the main challenge of exportation is getting buyers and this assertion was based on the fact that more than 70% of the enquires we get daily at 3T Impex Trade Academy regarding exportation is on how to get buyers. The capacity building on purchasers should therefore be aimed at changing this impression through the acquisition of the right skills and competencies to overcome this challenge.

Even though a manufacturer has a good product with huge demand on the African continent and also have the contacts of the buyers in different countries, he might still be unable to get buyers if he does not know how to effectively and efficiently price the products to be exported. The product manufacturers needs to know about different pricing strategies, different pricing objectives, product costing and pricing, cost elements in a typical export project Incoterms and how it affects costing, the logistics options and their cost implications. It is also necessary for them to know how to get the tariff concession schedule in order to be able to know the products on the non-sensitive list, sensitive list and the exclusion list. All these areas of export costing and pricing are highly imperative in order to be able to appropriately price their products in the African export markets. 

International trade is largely a business of logistics and documentation. The need for capacity building in the area of paperwork is very important because, if the documentation is faulty, it has the tendency to make the transaction to fail and lead to losses. Shipment of goods to destination can last for up to two months and the buyer might have to pay sometimes before seeing the goods especially in a letter of credit transaction. The exporters need to know about pre-export documentation and post-export documentation. The post export documents are peculiar to products and markets in question. If the documentation presented by the exporters leads to a discrepancies, it will cause delay in clearing the goods and this will consequently leads to extra cost in demurrage payment by the buyer abroad. 

The last but definitely not the least area that requires capacity building is the issue of payment. This basically involves sourcing from funds to pay local suppliers and getting payment from the buyer after shipment. The manufacturers and/or exporters will require capacity building in the areas of pre and post export financing and payment methods like Letter of Credit, bill for collection, Open Account and Advance Payment. Considering the fact that more than 80% of trade in the world are done on Open Account (Cash Against Document), which leaves the exporters exposed to the risk of either delayed payment or non-payment, it is therefore necessary to train the exporters on measures to put in place in order to mitigate this risk.

Finally, I will like state that inadequate capacity on the part of manufacturers is a major challenge that have bedeviled the implementation of FTAs in several developing countries around the world.  No matter the plans and strategies put in place by the government, if the actors are not equipped with skill and competence to take advantage of the AfCFTA, then the anticipated benefits will remain a mirage and at the level of potentials. It is my hope that the implementation committee of the government will adopt some of the recommendations that are been prescribed in these series of articles in order to make the implementation of the AfCFTA create the necessary jobs that will lift out of penury, the tens of millions of Nigeria that are currently living below the poverty line

For the love of Nigeria, Africa and Mankind.
Bamidele Ayemibo (bayemibo@3timpex.com)
Lead Consultant at 3T Impex Trade Academy