Friday, July 22, 2022

Mastering The Djibouti Market Under AfCFTA

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AfCFTA | Exploring Nigerian Export Potentials |-13-| Ebonyi

Saturday, July 16, 2022

Export Trade House: How The NEPC Can Make It A Success

The Nigeria Export Promotion Council (NEPC) has commenced a brilliant initiative which involves the establishment of Export Trade House (ETH) in different countries in Africa. Investopedia defined ETH as a business that specializes in facilitating transactions between a home country and foreign countries. Therefore, the goal of the NEPC in establishing the ETH in different countries is to facilitate the growth of non-oil export volume of the country, increase the share of Nigerian products in the targeted markets, create employment for citizens back home in Nigeria and increase foreign exchange inflows into the economy. This will be made possible through access to the market that will be made available to Nigeria businesses and their products by the ETH. 

 

According to the the  Chief Executive Officer of the NEPC, Dr Ezra Yakusak, the export trade houses were targeted at driving market access for Nigerian products. He also said that through the ETH in Cairo, Nigerian products would be shipped, warehoused, displayed and purchased in the North African country, stressing that the trade houses would enhance the visibility of made-in-Nigeria products outside the Nigerian shores, while reducing the cost of logistics on the Nigerian small and medium enterprises (SMEs). So far, the NEPC has established ETH in two locations which include Cairo in Egypt and Lome in Togo. The up coming locations include Nairobi, Kenya; Johannesburg, South Africa, Hunan in China; Ottawa in Canada; Dubai in UAE and Saudi Arabia. 

 

This is a laudable initiative that must succeed in order to help the country generate the export proceeds that is needed by manufacturers to purchase their raw materials and machineries from abroad. However, in order for ETH to be deemed successful, it must had led to the increase in the share of Nigerian products in the targeted markets, create employment for citizens and increase foreign exchange inflows into the economy. For this to happen, the NEPC must mandate its partners that are operating the ETH to focus on value added manufactured goods, provide market intelligence, made available the list of services it renders, provide the transactions dynamics of using its services and the cost of its services to the exporters.

 

It is important that the ETH operators are focussed on value added manufactured goods. This is because this is what will create the jobs locally and also increase the foreign exchange that the country will be able to earn from exportation. By focussing on Agric commodities, the country will be restricted to small markets size that commodities generally have when compared to finished products. For example, the total export market size for raw cocoa beans in the world is just about $9 billion while that of chocolate (a product in the value chain of cocoa) is about $30 billion. Also by processing raw cashew nuts to cashew kernel (which involves the removal of the shell) the price of the produce move from about $1,000 - $1,200 per MT to about $8,000 to $10,000 per MT. So the countries that makes the most money in the value chain of any commodity are those that add value to it. 

 

Also, the ETH needs to be mandated to provide export market intelligence for Nigerian businesses. This should be stated on their website and the address of this website should be made available to the exporting community (the link to the ETH website should be on the NEPC website). The export market intelligence that should be posted on their websites should include but not limited to the following: list of Nigerian products that have potentials in the export market where they operate, the range of competitive FOB price of these products, the annual volume of import of these items, the required certification and documentations for custom clearance, the packaging and labelling requirements, the quality specifications and the product variants/options that are most preferred by the consumers in the export market.

 

In addition to this, the ETH should also make available on their websites the list of services that it is going to be rendering to the Nigerian exporters in the export market. This is very necessary to help the exporters to be able to manage expectations. It is expected that the services of the ETH in the export market would include marketing Nigeria products using different platforms, closing sales and securing buyers, handling logistics of delivery to the warehouse, handles the warehousing arrangement in the export market, sourcing for custom brokers to do customs clearance and also handling debt collection from defaulting buyers in the export market. 

 

Furthermore, it is highly imperative for the ETH to provide on its website, the transactions dynamics (that is the step by step process) of using its services and the timeline or duration of the process. This will help the exporters to be able to know the progress being made on their transactions. This step by step processes should highlight what happens to the products from the point of engaging the services of the ETH to the point of arrival of the goods at the destination port, to the point of clearing, to the delivery to the warehouse, to the point of sales and receipt of payment for the exported items. 

 

Lastly and most important is the cost of the services of the ETH to the exporters. It is very important that the ETH operators are very transparent about on their fees and charges. This fee should be separately stated for each of the services that is being rendered by the ETH. This is to enable the exporters do their cost and benefit analysis in order to be able to know if the business will still be viable after the deduction of the payment due to the ETH. Since the ETH initiative is supported by a government agency like NEPC, it would be expected that the fees should be such that it makes the business to be profitable. This is because, the pricing that ensures high profitability will be an attraction for the exporters that would be using the service and this will consequently help the NEPC to achieve its goals. 

 

In conclusion, it is very important to commend the commitment of the management of the NEPC to the growth of non-oil export volume in Nigeria as seen in this ETH initiative of the council and many other export promotional programmes in the pipeline. It will be great also if the NEPC can adopt the recommendations made in this article. This will involve mandating the ETH operators to make available the required information as stated above. This is to give the exporting community enough information to enable them make informed decision when engaging the services of the ETH in the various markets where they have commenced operations. 

 

For the love of Nigeria, Africa and Mankind   

Bamidele Ayemibo (bayemibo@3timpex.com)  

Lead Consultant, 3T Impex Trade Academy

Friday, July 15, 2022

Mastering The Cote D'Ivoire Market Under AfCFTA

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