Monday, May 23, 2022

Mastering The Chad Market Under AfCFTA

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Tuesday, May 17, 2022

Mastering The Central African Republic Market Under AfCFTA

 
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Thursday, May 5, 2022

AfCFTA | Exploring Nigerian Export Potentials |-2-| Introduction

Mastering The Cape Verde Market Under AfCFTA

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Wednesday, April 27, 2022

Mastering The Cameroon Market Under AfCFTA

 

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Friday, April 22, 2022

Mastering The Burundi Market Under AfCFTA

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Choosing Export Market in Africa Under AfCFTA-PART-15 | Togo | Tunisia |...

Monday, April 11, 2022

Mastering The Burkina Faso Market Under AfCFTA


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Monday, April 4, 2022

Mastering The Botswana Market Under AfCFTA


























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Monday, March 28, 2022

Mastering The Benin Republic Market Under AfCFTA

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Wednesday, March 23, 2022

25 Reasons Why You Need To Get the Book "BUILT TO GO GLOBAL"


1. If you are looking for market to sell your products abroad then you will love this book. 

2. If you find it difficult to get buyers abroad then you will love this book. 

3. If you like books full of stories and case studies to drive home the point then you will love this book. 

4. If you are looking for why many people drop out of export business then you will love this book. 

5. If you want to build a successful and sustainable export business then you need to get this book. 

6. If you are looking for how to mitigate payment risk in export business then you need to get this book

7. If you want to know if your product is ready for the export market then you need to get this book. 

8. If you want to build a global brand then you will love this book.

9. If you want to know if your business is ready for the export market then you need to get this book. 

10. If you need foreign exchange to fund your import business then you will love this book 

11. If you are looking for a checklist to validate your readiness for export business then you will love this book.

12. If you want to know the areas of capacity building to grow your export then you will love this book.

13. If you want to know the signs of lack of export readiness, then need to get this book

14. If you want to enjoy government incentives for exporters then you will love this book 

15. If you are looking for how to boost your capacity to meet export market demand then you need to get this book

16. If you want to know the benefits of selling your products abroad then you will love this book

17. If you are thinking of exporting after retirement then you need to get this book

18.If you want to know why business owners fail in export business, then you need to get this book

19. If you want to know the reason for high mortality rate in export business, then you need to get this book

20. If you want to avoid dropping out of export business then you need to get this book

21. If you are looking for the type of partners to get in the export market then you will love this book

22. If you are looking for export market with high demand for your products then will love this book

23. If you want to know the challenges of doing business abroad then you will love this book

24. If you are looking for a template to follow to minimise your error rate in export business then you will love this book

25. If you are looking for how to know your consumers in the export market then you will love this book


What are you waiting for? Grab your copy now

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Monday, March 21, 2022

Mastering The Angolan Market Under AfCFTA


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Monday, March 14, 2022

Mastering The Algeria Market Under AfCFTA

 

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Thursday, February 17, 2022

How CBN Can Successfully Implement The RT200 FX Programme

The Central Bank of Nigeria (CBN) has announced the commencement of a very laudable initiative called “Race To $200 billion in Forex Repatriation” (RT200 FX Programme). This is aimed at supporting the businesses in non-oil export sector in order to grow the non-oil export volume to the point of having an annual repatriation of about $200 billion in the next 3-5years. The CBN Governor stated in his speech that the RT200 Programme will have five key anchors to drive the implementation and these will include: Value-Adding Exports Facility, Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme, Dedicated Non-Oil Export Terminal and Biannual Non-Oil Export Summit. 


This is a long awaited initiative because the non-oil export sector has been neglected for such a long time because of the cheap and easy money that the country is making from the oil and gas sector. However, in order to ensure that this initiative achieved the target goal of annual repatriation of about $200 billion in the next 3-5years, I will be making five recommendations which can be considered by the implementation committee of the RT200 FX Programme at the CBN.  

 

Processing Plants 

The first recommendation has to do with the implementation of the first anchor of the RT200 FX Programme which Value-Adding Exports Facility. This involves providing concessionary and long term funding to businesses people for the setting up of processing plants to add value to the primary commodities from the agricultural sector. This is to ensure that the Nigerian export move away from commodities to finished goods and this will consequently increase the export earnings from this sector. The way this has been done by state government in the past is to raise funds and partner with a private sector to set up the processing plant in a public private partnership arrangement. This means that the plant will only create a few jobs, increase inequality and keep the wealth generated from the business among very few billionaires in the country.

To avoid a repeat of the old model without inclusive growth, it will be great if the  CBN can consider a public private partnership arrangement that setup a shared agro processing facilities in different states of the country based on the predominant commodity that is cultivated in the state. This facility will process and package different products for SMEs in and the packaging will be customized for each SME. This means all the SMEs need to do is to deliver their raw materials like plantation, cocoa beans, ginger etc (depending on what the factory is meant to process) in one to two weeks the commodities would have been processed to finished product, packaged in the name of the SMEs and the SMEs will only pay a service charge per unit of the processed and packaged products. 

 

This model will make many SMEs in different states to now focus on the work of developing export markets for these products in different parts of the world. Also this model will make the SMEs to worry less about power, quality, packaging, certification etc because the processing plant would have taken care of all of these. This model will create market for farm produce, increase efficiency of value chain operators, increase processing capacity, increase job creation, poverty eradication, reduce inequality and decrease insecurity in the country.

 

Primary Products 

The second recommendation has to do with the implementation of the second anchor of the RT200 FX Programme which is Non-Oil Commodities Expansion Facility. This involves the provision of concessionary facilities to fund the primary production of commodities. It is designed to significantly boost local production of exportable commodities and this in turn ensures that the new agricultural processing facilities in the first anchor have enough raw materials to be used to produce finished products.  

 

To be able to get the maximum benefit for the country through this second anchor, it will be great if the CBN can consider other commodities with huge potential for foreign exchange generation besides the regular ones which cocoa beans, cashew, sesame seeds and ginger. If the goal of CBN is to generate more foreign exchange for the country, then focusing on the production of cocoa beans, cashew, sesame seeds and ginger would not lead the nation to that desired destination because, as at 2019, the export market sizes for these commodities are cocoa beans ($9.35 billion), cashew ($6.84 billion), sesame seeds ($2.2 billion) and ginger ($0.85 billion).  

 

To generate the much needed foreign exchange from the processing and export of agricultural commodities, then, the CBN should consider the expansion of the production of soya beans, wheat, palm oil, coffee, corn. This is because the export market size of each of these product is more than the combined export market size of cocoa beans, cashew, sesame seeds and ginger. As a matter of fact, the export market sizes of these commodities at the primary level are soya beans ($58.1 billion), wheat ($42.6billion), palm oil ($33.2billion), coffee ($30.4 billion) and corn ($30.2billion). This means the export market sizes and consequently export earnings of these commodities after value addition will be far higher than the usual commodities. It is also important to state that the support of CBN for these commodities should cover the use of improved seedlings and other support that would lead to increase yield per hectare and consequently reduce the production price. 

 

Payment of Rebates 

The third recommendation has to do with the implementation of the third anchor of the RT200 FX Programme which is Non-Oil FX Rebate Scheme. This involves a special local currency rebate scheme for non-oil exporters of semi-finished and finished produce who show verifiable evidence of exports proceed repatriation sold directly into the I & E window to boost liquidity in the market. It may interest the CBN to know that the current high inflation in the country coupled with the infrastructural deficit is making the export business to become less and less profitable. Therefore making exporters to sell the repatriated export proceeds on the I & E window would constitute a discouragement to exporters and thereby becoming a clog in the wheel of progress of the race towards the realisation of the RT200 FX target.

 

One would have expected that exporters be allowed to sell their export proceeds in their preferred market and to the highest bidder which was the practice that came into being when Professor Chukwuma Soludo was the CBN governor. This is because, this will increase the supply in the foreign exchange market and thereby leading to reduction in price and thereby leading to convergence of the exchange rate (which is a natural law of demand and supply). However the current CBN administration does not sees this as a viable option. 

 

In order to be able to encourage the exporters and garner their supports around the RT200 FX programme, the rebate of the CBN should cover a significant gap in the difference between the current rate on I & E window and the parallel market. This is what the export expansion grant would have done for exporters but it is not well funded by the federal government and this has made the Nigerian exporters to be unable to offer competitive pricing in the export market. A rebate that covers at least 50% of the difference in rate of exchange in these two market will go a long way to to drive more entrepreneurs into the non-export business 

 

Port Terminal 

The fourth recommendation has to do with the implementation of the fourth anchor of the RT200 FX Programme which is Dedicated Non-Oil Export Terminal. This involves the establishment of a Dedicated Non-Oil Export Terminal to solve the perennial problems of port congestion cited by exporters as a major impediment to improved operations. I will like to stress that the problem of exporter at the port is more than port congestion. The fact that there are different agencies of government to work with is a big challenge because they are all scattered in different parts of the city. 

 

Therefore, the proposed dedicated non-oil export terminal should be such that it becomes a one stop shop for exporters. This therefore means that, this terminal should have an office for all the government agencies that are involve in the export process irrespective of the item of export. That means the terminal should have offices for government agencies like the Nigerian Custom Service, NAFDAC, Pre-shipment Inspection Agents, Nigeria Agricultural Quarantine Service, Federal Produce Inspection Service, Standard Organisation of Nigeria, commercial inspection agents like SGS and Bureau Veritas and the Nigerian Export Promotion Service etc.

 

In addition to this, the terminal should have storage facility that can accommodate both perishable and non-perishable products. It should be built at a location that is close to water channel to facilitate the transfer goods to the port via the barge system or located close to a railway station to facilitate the transfer goods to the port via rail. This terminal should not operate for just 8hours a day but rather for 24hours. This is to ensure that goods are cleared for export at any time of the day when goods arrive at the terminal.  

 

Periodic Programme

The fifth recommendation has to do with the implementation of the fifth anchor of the RT200 FX Programme which is Biannual Non-Oil Export Summit. This involves a biannual programme that brings together all the relevant stakeholders in the export business including bankers, customs officials, the Nigerian Ports Authority, the Nigerian Export Promotion Council, clearing agents, cargo airlines, shipping lines, logistics companies, insurance practitioners. This is a very necessary event because it enables the stakeholders to deliberate on the export business challenges and fashion out the way forward. 

 

However, it may interest the CBN to know that there is a programme like this on ground already. It is an initiative of the Network of Practicing Non-Oil Exporters of Nigeria(NPNEN). This is a not-for-profit organization registered under the laws of the Federal Republic of Nigeria in Part C of the Companies and Allied Matters Act (CAMA), as an Incorporated Trustee. It is an umbrella platform for collaboration among the different actors in Nigeria’s non-oil export value-chain. NPNEN organize an annual event called Non-Oil Export Conference, Exhibition and Awards (NECEA) and this event brings together critical stakeholders in the non-oil sector including top officials of government, civil society, private sector, bankers, customs officials, the Nigerian Ports Authority, the Nigerian Export Promotion Council, clearing agents, cargo airlines, shipping lines, logistics companies, insurance practitioners the media and academia to dialogue on how to refocus the country’s non-oil sector, for a more effective participation in global trade. 

 

Rather than duplicating efforts, it will be great if the CBN can partner with NPNEN-NECEA to jointly organize this event in collaboration with the Nigerian Export Promotion Council (NEPC). This means that NPNEN-NECEA can now hold as a Biannual Non-Oil Export Summit to create the single largest platform for all stakeholders in the non-oil export sector to form a synergy and speak with one voice on how to move the sector forward. This programme will therefore create an avenue for periodic review of the progress being made in the implementation of the RT200 FX Programme 

 

Finally, it is important to state again that this is a very laudable initiative and there is need for capacity building for the staff of the CBN and the committee that will be implementing this programme. This will make them to have a comprehensive view of the export business sector and become well equipped to put in place effective strategies for the implementation of the five anchor programmes. The Race To $200 billion in Forex Repatriation is a very audacious goal but it is possible, if personal interests are put aside for the greater good of all and sundry in Nigeria 

 

For the love of Nigeria, Africa and Mankind

Bamidele Ayemibo (bayemibo@3timpex.com)

Lead Consultant, 3T Impex Trade Academy 

Saturday, January 22, 2022

What CBN Needs To Do Before Implementing E-Evaluator & E-Invoicing For Import & Export Trade In Nigeria

 

The Central Bank of Nigeria issued a circular dated January 21, 2022 with reference number TED/FEM/FPC/PUB/01/001 to all authorised dealers banks and the general public on the plan to modify the import/export process in Nigeria through the introduction of an e-evaluator and e-invoicing system for import and export trade transactions in Nigeria. The circular stated that the e-evaluator and e-invoicing will replace the final invoice which is a part of documentation required for import and export trade transactions in the country. However, there are a lot of questions begging for answers because there are so many gray areas in this circular that need to be addressed by the CBN before this new process goes live. 


Firstly, the circular stated that the implementation of the e-evaluator and e-invoicing system will become effective for all import and export trade transactions in the country from February 1, 2022. This commencement date is just 11 calendar days and 6 working days from the date of issuance of the CBN circular on this new process and this is a very short time for the deployment of such a major change in the import and export trade processes in the country. The implication of this shortness of time is that some importers and exporters be caught unprepared in between a transaction and the CBN circular did not exempt on going transactions that have already been negotiated and the contract signed and the production of goods already commenced or the shipment of goods already done with the goods on the way to Nigeria. The trade agreement for such transaction will not have any clause that stipulates this regulation as stated in paragraph B of the the CBN circular. It will be great if the CBN can extend the implementation date of this new process by at least 3months to enable the stakeholders understand the process well enough before it commences. It is expected that this circular should exempt transactions that have already been signed with the Form M or NXP already approved and this means that this new process should therefore be applicable to any new Form M or NXP that is submitted after the commencement date of this new process. 


According to the circular, “this new regulation is primarily aimed at achieving accurate value from import and export items in and out of Nigeria”. It also went further to state that the e-evaluator and e-invoicing system will operate on a global price verification mechanism guided by a benchmark price. In addition to this, it stated that any Form M or NXP that has a unit price that is more than 2.5% of the verified global checkmate price will not be approved. This is a great idea if this is implemented for Form M to ensure that over-invoicing is prevented to ensure that money laundering is prevented. However this should not be applicable for NXP in export business because it is preventing the seller in Nigeria from getting more value for the goods being shipped and this will prevent exporter’s from bringing in more foreign exchange that is desperately needed in this economy. 


It is also important to state that each agricultural commodities being imported into and exported out of Nigeria have different qualities and these affect the prices of the items being imported or exported. Does this mean this pricing to be used as benchmark will capture the different prices of different qualities of commodities like raw cashew nuts, sesame seeds and cocoa? For example, will this platform have prices for raw cashew nuts that have very low nut count and high out turns (which are characteristics of high quality nuts)? Then another price for raw cashew nuts that have very high nut count and low out turns (which are characteristics of low quality nuts)? It is obvious that this is not likely going to be the case and that means that an importer or exporter would be prevented from doing their shipment if the quality of the commodity is low (but acceptable to the buyer). This therefore means that the price agreed by both parties would most likely going to be markedly different from the benchmark that CBN is using to evaluate the right price for the goods. 


The circular also stated in paragraph D that the electronic invoice authenticated by the authorised dealer banks is only advisory to the Nigeria Customs Service (NCS). This means the NCS can still come back to the importer to uplift the FOB when issuing the Pre Arrival Assessment Report (PAAR). This will be done after the CBN might have reduced the invoice amount because it is higher than the benchmark price by more than 2.5%. Since the CBN and NCS are working for the same federal government, it will be better if both of them agree on the platform to be used for price verification and therefore work with the same benchmark price in order to ensure that the importer does not have to pay an additional duty for FOB uplifted by NCS after the CBN has forced the importer to reduce the price in the first place. 


Also the suppliers and buyers of goods and services into or out of Nigeria are expected to register again on another dedicated electronic portal to be provided by the CBN and operated by an agent of CBN. Why the duplication of platforms for trade when everyone is clamouring for a single window for trade. According to paragraph H, the authenticated invoice will be transmitted from the CBN dedicated platform to the Nigerian Single Window portal for import and the Trade Monitoring System for export. Why can’t the new application be hosted on the current platforms for import and export trade in Nigeria so that the suppliers of goods into Nigeria and buyers of goods out of Nigerian can register on these platforms. This will therefore mean that, there would be no need for transmission from a CBN dedicated platform to the Nigerian Single Window portal for import and the Trade Monitoring System for export.


Considering the fact that trade, particularly exportation is desperately needed today for the growth of the Nigerian economy, is this decision to ask suppliers to pay not going to be discouraging? Also who exactly is to effect the payment of an annual fee of $350? Is it to be paid only by the suppliers of goods into Nigeria (as stated in paragraph I) or it include the buyers of goods out of Nigeria (since both of them are to register on the platform according to paragraph E). It is important to state that this policy can make suppliers and buyers abroad to consider other markets in order to reduce their cost of doing business. It will be great if the CBN can reconsider the payment of this fee by either reducing it or scrapping it altogether and look for other means of funding the maintenance of this platform. If this is not done, most suppliers are going to push back and make Nigerian importers to pay this fee if they need them to supply the goods to Nigeria and thereby further increasing the cost of doing import business in Nigeria. 


There is also a confusion in the circular that needs to be clarified. When the circular says “buyer” does it mean the buyers of imported goods in Nigeria or the buyer of exported goods out of Nigeria? The reason for this question is that the paragraph E said the supplier/buyer is required to register and submit e-invoices to the CBN dedicated portal for validation and authentication. Since the supplier is the one to issue the invoice, why is “buyer” added to this statement. If the buyer in this case is buyers of imported goods in Nigeria or the buyer of exported goods out of Nigeria, does it mean they are to get the invoice from the supplier and then submit it for authentication? Does this statement in paragraph E on registration on the platform only applicable to supplier/buyer abroad and not importer/export in Nigeria?


The CBN would also need to clarify the confusion between paragraph B and paragraph G. This is because both paragraph talked about the suppliers submitting invoices but to two different organizations and platforms. Paragraph B stated that the invoice must be submitted in electronic format to authorised dealer banks while paragraph G said that the supplier is to submit e-invoice to a dedicated portal of CBN which is being managed by an agent appointed by the CBN. The question arising from these statements is as follows: is this the same invoice or they are different invoices (like pro-forma and final invoices) if they are different, it will be great if CBN can issue an addendum to this circular and clarify. 


In conclusion, even though this circular might be well intended by the CBN but there is need for some modifications in the circular before a successful implementation can be achieved. These are my recommendations:

  1. That CBN should issues an addendum to this circular to clarify some issues which are stated below 
  2. That the addendum to this circular should correctly define parties by stating who exactly CBN is referring to when it stated importer, exporter, buyer, and supplier in the circular 
  3. That the addendum to this circular should contain a transaction dynamics stating the step by step processes of how this new policy will work for both import and export transactions 
  4. That the the CBN should extend the date of commencement of the implementation of this new policy by at least 3months for proper sensitisation and education of the stakeholders 
  5. That Form M and NXP that have been processed and approved before the effective date of implementation should be exempted from this new process 
  6. That CBN needs to have series of stakeholders engagement and education for bankers, importers, exporters and the clearing and forwarding agent. These should be done separately for import transactions and export transactions 
  7. That CBN should consider either reducing the annual fee or scrapping it altogether and look for other means of raising money for the maintenance of the platform.

I believe that if the CBN would consider the recommendations made in this article and others that might be coming from the trade and banking communities, it will make what the CBN want to do to be more robust and there helping the apex bank to achieve the aims and objectives that it had in mind before embarking on this new trade policy of e-evaluator and e-invoicing system for import and export trade transactions in Nigeria. 


For the love of Nigeria, Africa and Mankind.

Bamidele Ayemibo (bayemibo@3timpex.com)

Lead Consultant, 3T Impex Trade Academy