Monday, December 15, 2014

Customs Rejects 14,259 PAAR In One Year

About  14, 259 Pre-Arrival Assessment Reports (PAAR) have been rejected by the Nigeria Customs Service (NCS) since it took over the scheme from the former scanner service providers (SSPS) last year.

The documents were rejected following several violations of the laid down rules and regulations guiding the issuance of PAAR.

Similarly, not less than  N950.1 billion was collected NCS as revenue into the federation account from January to November 2014.

The figure collected by the service which oversees Nigeria’s premier port, Apapa Quay, Lagos,  showed that the amount is 23.4 per cent higher than the N769.3 billion collected in the corresponding period of 2013.

These were disclosed by the NCS, Customs Area Controller, Apapa Area Command, Comptroller Charles Edike.

He said in addition to the amount collected, the NCS also saved the country N36.9 billion collected under the one per cent Comprehensive Import Supervision Scheme (CISS), which would have been paid to the three former destination service providers.

Speaking on “The effect of the Pre-Arrival Assessment Report (PAAR) on the Nigeria Economy”, Edike said notwithstanding initial teething problems, the NCS has been able to overcome the challenges experienced at the introduction of PAAR in December last year, as it has so far received and processed 201,330 requests out of which 188,424 were finally released and 108,169 uplifted with a total Cost Insurance and Freight (CIF) value of N5.6 trillion.

Edike, who spoke on the sidelines of the formal inauguration of the new executives of Maritime Reporters Association of Nigeria (MARAN) led by Ifenyinwa Obi, said the new clearance procedure had not only increased the revenue profile of the service; it has helped in reducing cost and time of clearance of goods at the port, thus facilitating trade.

According to him, NCS has gained the recognition of the World Customs Organization (WCO) as a result of the successes recorded by the development and introduction of PAAR.

He however noted that the biggest challenge of the new clearance procedure is lack of compliance to trade regulations by importers as a total of 14, 259 PAAR have so far been rejected.

He said the non-compliance of importers is the reason why some PAAR documents are queried.

“The biggest challenge is compliance. Your PAAR will not be queried so long as you are transparent and do not cut corners. But when you want to cut corners, your PAAR will be queried because the system is robust enough,” Edike said.

Exchange Rate Losses: Save yourself from Financial Bleeding!!!

Thursday, December 11, 2014

Shippers Urge Customs To Minimise Queries On PAAR

The President, Shippers’ Association Lagos State, Mr Jonathan Nicol, on Wednesday decried the number of queries the Pre-Arrival Assessment Report (PAAR) on cargo attracts from Nigeria Customs Service (NCS).

Nicol told the News Agency of Nigeria NAN) in Lagos that the shippers expected the Customs to reverse the query system as this action could facilitate cargo clearance within 48 hours.

“PAAR had a teething problem when they started. It was a better idea that the Nigeria Customs Service should do its statutory function.

“So Shippers’ Council supported it from inception, knowing full well that as a family we work together and support one another.

“We felt we needed to give customs the backing we did. I would say by and large, the PAAR regime is working well.

“But with just one exception that they should stop querying their own documents.

“Before you issue PAAR, you should have got all the relevant documents relating to that shipment.
“ And whoever is checking the last document, that is, the invoice, should check it properly.

“ You can even log on to the internet; you don’t have to be in a hurry to issue out the PAAR when you have suspicion on a particular consignment.

“But the moment you issue that PAAR, it is assumed that what you give out to the importer is a correct document.’’

He said further: “That is the professional thing. We believe that queries on PAAR should be minimal.”

According to him, the queries on PAAR should not be more than10 per cent of the total PAAR the Customs issues to its clients.

“We are not comfortable with the Customs officials querying their documents and they are still defending that it is not wrong.” (NAN)

Wednesday, December 10, 2014


Dear readers, 
We will like to intimate you with the details of our new initiative to promote export in Nigeria right from the Citadel of learning. This is aimed at creating jobs, reducing unemployment and consequently poverty in Nigeria. We will appreciate if you can be part of this and we will also like to say that No amount is too small.

As part of our objective to promote export business in Nigeria, 3T Impex is launching a strategic programme to grow an export oriented generation by educating and exposing the youth in tertiary institutions all over Nigeria to relevant export business information. This is aimed at sensitizing them on the immense opportunities that abounds in the non-oil export sector of the economy and how they can benefit profitably from it as a student (during their holidays) and as a young graduate. This will consequently reduce the unemployment rate in the country and help create young, skillful, vibrant and well equipped export trade entrepreneurs. This initiative is aimed at creating more Jobs (by self employed young graduate in export business), thus reducing poverty and consequently improving our economy via the growth of GDP that would result from massive exportation.

The EPITI Project
To achieve this feat, we have come up with a programme called Export Promotion In Tertiary Institutions (The EPITI Project). To execute this project, we have put together a a book titled Export Business Made Easy (it comes with a CD titled the ABC of Export. This CD contains 2hours of disseminating export information in mp3 format which is divided into 12tracks on an Audio CD). We therefore need sponsorship of the production, packaging, campus launch through free export seminars and the distribution of the product during the seminar.

The EPITI Project will be launched in at least one major campus in each of the 36 states of the federation including Federal Capital Territory. Our target is to reach at least 10,000 students in each of the states in the federation. Our estimation of the total cost per is N2,000 per book. This covers the cost of production, packaging, campus publicity and product launch through free export seminars and the distribution of each of the book. Altogether, we intend to produce and distribute a total of 500,000 copies of this product for free.

We are therefore soliciting for partnership with your organization to sponsor this project in part or in whole as part of the organization’s contribution to the growth of the Nigerian GDP through exportation, sustainable employment generation and drastic reduction in the poverty level across the country.
Area of Sponsorship
The Sponsorship of The EPITI Project has been segmented to enable each organization sponsor different aspects of the project based on their area of interest, region and capital.  A sponsor can therefore limit its sponsorship to:
1.     A particular state
2.     A particular geopolitical zone
3.     A particular amount
4.     A particular number of copies of the book
5.     A particular area of the logistics (Production, packaging, publicity, transport etc)
Depending on the area of interest of each sponsor, the breakdown of all the cost implications will be made available to each partner in this project upon request.

Benefit to the Sponsor
Considering the fact that this project is going to cover every state in this country with a target of about 10,000 students in each state, the products and services of each sponsor will be given immense publicity through:
1.      Their logo which will be printed on the book and CD pack/sleeve
2.     Distribution of their handbills and fliers on all the campuses
3.     A short presentation of their products and services before the students during the free seminar.

Long Live Federal Republic of Nigeria!!!

Monday, November 10, 2014

‘Nigeria To Earn $1.6tr From Non-oil Exports In Five Years’

EXECUTIVE Director of the Nigerian Export Promotion Council (NEPC), Olusegun Awolowo, has predicted a boom in the nation’s economy given the Federal Government’s current drive to boost the non-oil export market.

Awolowo said the government had already set machinery in motion to evolve 30 new export markets within Nigeria in the next five years, all capable of making the country attain a 7.1 annual Gross Domestic Product (GDP) growth and a financial base of up to $1.6 trillion, as well as five million direct and indirect jobs.

Speaking at the weekend in Abuja during the fourth Annual Media Conference themed, “Building Greater Nation through Sustained Transformation,” he said that NEPC had been making efforts to position the export market as the growth opportunity of choice for private sector earnings and sustainable economic development.

He noted that President Goodluck Jonathan’s Transformation Agenda has ensured steady growth in non-oil export, which according to him fetched the country of $2.970 billion in 2013, a 15.9 percent increase over the $2.561billion in 2012.

According to him, NEPC has designed a game-changing approach towards attaining government’s new initiatives against the backdrop that only 11 new non-oil products were exported in 2013 to 11 countries. However, he lamented that the nation’s non-oil export potentials have not been fully exploited despite endowed natural resources in solid minerals and agriculture.

Awolowo stressed the need for Nigeria to begin to look beyond its oil resources now that the country has stated experiencing a lack of patronage from major oil consumers such as the United State (U.S.), while the crude oil price has suddenly dropped by 25 percent.

Nevertheless, he disclosed that NEPC has developed a “one state, one product” initiative towards promoting the nation’s export markets, with each state being encouraged to specialize in an agricultural product in which it has comparative advantage over others.

“The programme will adopt one product in each state and develop its value chain. It will also adopt key national products such as cocoa, palm produce, cashew, cassava, groundnuts and others for priority value addition and development,” he disclosed.

According to him, this will not be difficult to attain because of the nation’s huge potential as the world’s largest producer of eight agricultural export commodities, including cassava, yam, shea-nuts and sorghum, and a dominant global producer of 15 other products - cocoa, palm produce, potatoes, maize, cashew nuts, gum arabic and kola nut, among others.

He also indicated that while Nigeria remained the world number one producer of shea-nuts, with 325,610 tons in 2010, it is also rated Africa’s number two in production and export of sesame seeds, the bulk of which is exported to such countries as China, Japan, Turkey, Syria and South Korea.

The NEPC chief disclosed that the country has taken a step further towards attaining this dream through a synergy with the World Trade Organisation (WTO), in which case NEPC has set up eight centres in eight local councils for shea-nut/butter in Oyo, Kwara, Kebbi and Niger states, and sesame seeds in Kogi, Benue, Taraba and Borno states to train farmers/processors on good agricultural practice.

More so, he said NEPC has started targeting no fewer than 25,000 jobs from the shea butter value chain, 15,000 jobs from production of sesame seeds, 15,000 jobs from the growth of yam, with high expectations that women would be massively empowered in the process.

He further hinted that government was already repositioning to take full advantage of the African Growth Opportunity Act (AGOA) by developing a broad sector approach in the textile and fashion industries to meet U.S. standard.

NEPC, he added, was also developing the capacity Nigerian youths under the Youths Empowerment Export Skills Acquisition Programme (YEESAP) in collaboration with SURE-P GIS (Graduate Internship Scheme), while the Youths Entrepreneurship Programme (YEP), in collaboration with Abuja Enterprise Agency (AEA), was also ongoing.

Equally planned is an intervention on PINE Export Component, including leather and leather products (Borno), tomatoes for export (Gombe), tea for export on the Mambilla Plateau (Taraba) and hibiscus flowers for export (Adamawa, Bauchi, Taraba, Borno and Yobe).

Other areas of government intervention, he stressed, include development of sesame seeds for export (Adamawa, Bauchi, Borno, Gombe and Taraba), artisanal, fish and fishery products (Adamawa) as well as an integrated export-related capacity building in all states in the North-East.

Written by Itunu Ajayi, Abuja -

Thursday, October 30, 2014

Nigeria Yet To Benefit From AGOA, Says Ohuabunwa

The President of the Nigerian-American Chamber of Commerce (NACC), Mr Sam Ohuabunwa, says Nigeria has yet to enjoy the benefits of the African Growth and Opportunities Act (AGOA).
Ohuabunwa made the statement at the 54th Annual General Meeting of NACC in Lagos on Wednesday.
The News Agency of Nigeria (NAN) reports that the U.S. Government established AGOA in 2000 to provide duty and quota free markets for goods from sub-Saharan African countries imported into the U.S.
He said that the incentives provided on the AGOA platform were not substantial enough to balance trade volume deficit between Nigeria and the U.S.
“The United States of America remains Nigeria’s biggest trading partner.
“Bilateral trade between both countries has risen to 36 billion dollars just as President Goodluck Jonathan has called for more U.S. investments in Nigeria.
“We have exported more crude oil to the U.S. than manufactured goods.
“There is a need for capacity building in customs regulations and operations and policy reforms that will develop the private sector to produce products that meet international trade and export standards,” he said.
Ohuabunwa said that NACC had contributed to the growth of Small and Medium Scale Enterprises through its five million dollars private equity fund, launched in 2013.
NAN reports that the chamber recorded an accumulated fund of N 23.6 million for the 2013 year ended as against the N22.1 million recorded in 2014. (NAN)

Now Available for Sales- Export Business Made Easy

Monday, October 27, 2014

Nigeria-China Trade Volume Rises To $11.76bn in 2014

The trade volume between Nigeria and China by the end of the third quarter of 2014 has risen to $11.76 billion, indicating a 39.4 percent increase.

This is as the bilateral relations between both countries continue to rise in various sectors especially trade, energy, agriculture, infrastructure, telecommunication, electric power, railway, aerospace, financing, science, technology and culture.

The Chinese Ambassador to Nigeria, Gu Xiaojie, made the statement at a reception to mark China’s 65th National Day in Abuja on Tuesday evening, where he added that the results of the cooperation between both countries were manifested in the growing local employment, upgraded infrastructure and improving livelihood for the people.

The envoy added that the people-to-people relationship in the last few years had also been on the rise.
“In the past two months and more, Nigeria was affected by the Ebola virus disease (EVD), the Chinese people shared the woes and stood together with the Nigerian people. We highly commend the strenuous efforts made by the government and people of Nigeria in the fight against the Ebola epidemic, and applaud the achievements you have made,” Xiaojie said.

He disclosed that the Chinese government in August provided medical supplies worth $4.9 million to three countries mostly affected by the EVD, alongside two teams of medical experts.
“China has also announced an additional aid package worth $32.5 million for Liberia, Sierra Leone, Guinea and other countries in the sub-region to combat EVD.”

“…Africa is a significant pole in world political arena latest pole in global economic growth, and a colourful pole in human civilisations. China cherishes the traditional friendship and sound cooperation with African countries and is committed to developing relations with Africa by adhering to the policy featuring “sincerity, real results, affinity and good faith,” Xiaojie said.

Nigeria Imports Three Million Bags of Rice In October

Nigerians imported 165, 852 metric tonnes of rice in the first three weeks of October this year, amounting to over three million bags of 50 kilogramme of the commodity.

With an average market price of N10,000 per bag, about N33.2bn would have gone into the purchase of this essential food item in just 21 days.

This figure is 51,952MT higher than 113,900MT of rice imported in September this year, according the latest statistics obtained from the Daily Shipping Position, compiled by the Nigerian Ports Authority.

Traders and economists attributed the surge in the volume of rice import to the end of the year festivities.

A trader, Mrs. Ronke Adeoye, noted that some people were already stockpiling the product in anticipation that the price could shoot up in the last two months of the year, ahead of the Christmas and New Year celebrations.

Many corporate firms often buy rice for distribution to their customers and workers as part of the end of the year gifts.

The rice import is still high despite the Federal Government’s imposition of additional 60 per cent tariff on its import this year.

To encourage local production of rice in the country, the government had earlier this year raised the tariff on imported rice to 110 per cent. But due to pressure from importers and other stakeholders, who observed that the local production could not meet the demand of consumers, it was slashed to 60 per cent for rice traders and 20 per cent for rice mill owners

In a conversation with our correspondent, the Vice President, Rice Sellers’ Association, Daleko Market, Alhaja Silifat Akinsete, said apart from the popular Ofada rice, they had yet to see any other Nigerian cultivated rice in the market.

She added that the ‘Ofada’ rice which had been in existence over the years was more expensive than the imported rice which was readily available in the market.

The President, Rice Importers and Millers Association of Nigeria, Mr. Tunji Owoeye, said that some rice importers had started embracing the backward integration policy by taking up rice mills that were no longer functioning to produce rice locally, adding that without the policy they would not have thought of acquiring the mills.

According to him, the reason why the locally produced rice has not reached the South West was that the integrated mills are located in the northern part of the country and they are being sold in the environment where they are cultivated and milled.

The RIMIDAN boss said, “The government has done a lot in interfacing with dealers with new incentives. We are beginning to take ownership of the local rice production policy. Government can give further support through the reduction of smuggling by the custom officers. Our interest is to feed our people and get employment for our youths. We support the government strategies because we need to fix our homes before we stop importation.”

On his part, the President, Nigerian-Thai Chamber of Commerce, Industry and Agriculture, Chief Femi Orebote, said that to ensure high quality of rice production, improved technology should be learnt from experts in the field from Thailand.

He said that the recent review of the policy on importation of rice, which initially encouraged smuggling, made Thailand to feel concerned about the business in the country, adding that it was willingly to extend its expertise to Nigerian farmers.

FG To Facilitate Trade In Nigerian Ports

The federal government has reiterated its preparedness to facilitate trade in the country, especially in the nation’s seaports, airports and international borders.

To this end, it said it would institute policies that would facilitate trade in the nation’s maritime industry. The Executive Secretary, Nigerian Shippers’ Council (NSC), Mr. Hassan Bello dropped the hint in a meeting with some stakeholders in Lagos.

Bello said the purpose of the meeting was to prepare the ports for more trade in Nigeria. He added that operators also discussed modalities on how to reduce the cost of doing business in Nigerian ports.

According to him, Nigerian ports are competing with other ports in the sub-region and operators have to streamline their clearance procedures to attract cargo to Nigerian ports.

The NSC helmsman said the move followed a consensus reached after a meeting with maritime operators on how to reduce human contact in cargo clearing at the ports.

“The NSC will direct some of the resolutions to the government because we need the government to take action on some certain issues that have been discussed. We will convince the government to implement the issues. They are many but we may not discuss them now for strategic reasons but they are on trade facilitation. This is our third meeting and at each meeting we reached some achievements. It is going to continue until we ensure that Nigerian terminals are competing favourably with other terminals in the world,” he said.

According to him, the measures were in line with the customs targets because they are strategic partners of terminal operators, shipping companies and freight forwarders

Bello added that the Nigerian ports operations needed automation to meet the dynamic trends in the international maritime operations.

“We need to develop standard operating procedures. We need to check the presence of government agencies in the ports on what they are doing,” he said.

The NSC Executive Secretary enjoined Customs to improve on their work in automation, stressing that the government agency must provide leadership for the maritime industry.

Product List For UK and USA

 Dear visitor, please find below the list of exportable products that African shops in UK and USA are demanding for. Kindly review and confirm the one you can supply on this list and then register for our Export Mentoring Service to enable work with you on the execution of the export project.

Monday, October 20, 2014

Training on Handling The 5Ps of Hitch Free Importation In Nigeria

Trade On Import Trade Process and Regulations in Nigeria

Training on Handling Letter of Credit Challenges

Import Finance Training-Reducing Cost, Cycle & Delays

CDCS Tutorial Class To Commence November 1, 2014

Niger State To Promote Exports

The Niger State Government is planning to promote the export of products from the state by developing products along the value chain.

This is even as the director- general of Standards Organisation of Nigeria (SON), Mr Joseph Odumodu, has harped on sustained quality of products manufactured in Nigeria .

The director- general, Niger State Commodity and Export Promotion Agency (NCEPA), Alhaji Mohammed Kontagora, disclosed this while representing the Niger State governor,Muazu Babangida Aliyu, over the weekend in Minna at the presentation of Nigeria Industrial Standard (NIS) mark of quality certificate of excellence to awardees in Niger State by the Standards Organisation of Nigeria (SON).

He stated that the value chain initiative was based on the fact that the state government cherishes the contributions of the private sector in its aspiration for the state economy to be among the three top economies in the country.

He disclosed that the state has developed and encouraged such value chain initiatives in shea butter because it has a very high comparative advantage for export in addition to meeting the nation’s need.

Earlier, Odumodu has stated that the only way that goods from Nigeria could meet up with global competition was for the standards and quality of the products to be improved upon at all times.

Odumodu, who was represented by the director, operations of the organisation Mr Nelson Adebiyi, maintained that a good product would always attract global attention.

Monday, October 13, 2014

SON Commences Implementation Of Compulsory Products’ Certification

The Standards Organisation of Nigeria (SON) has commenced compulsory product certification in its offices across the nation. This is also as it has called on manufacturers and importers of goods to ensure the importation and production of quality goods in the country by subscribing to its Mandatory Conformity Assessment Programme (MANCAP).

SON said that Nigerians deserved to get value for their hard earned money adding that the MANCAP was put in place to ensure that all manufactured products conformed to the relevant Nigerian Industrial Standards (NIS) prior to sales in the markets or export.

Director- general of SON, Dr Joseph Odumodu, made this disclosure weekend in Abuja at the flag-off of “The Walk for Standards,” held to mark the 2014 World Standards Day.

The DG, who was represented at the event by the director of operations in the agency, Mr Nelson Adebiyi, said, “The certification to MANCAP will also ensure that locally manufactured products are subjected to similar conformity processes like the imported products undergo with SONCAP thus creating a level playing field,”adding that the event would be concluded with a national seminar for small and medium enterprises in Lagos in collaboration with SMEDAN, National Association of Small and Medium Enterprises(NASME).

Friday, October 3, 2014

Nigeria Posts N2.43trn Trade Surplus In Q1 – NBS

The National Bureau of Statistics (NBS) has confirmed that Nigeria recorded a trade surplus of N2.42trn in the first quarter of the year as exports rose 14.2 per cent to N3.96trn compared with the previous quarter.

The latest Foreign Trade Statistics report just released showed that the value of imports within the same period dropped by 8.3 per cent to N1.54bn.
The report also showed that mineral products still accounted for N3.59trn or 90.7 per cent of the total export value in the first quarter of the year.

The total value of Nigeria’s merchandise trade in the period stood at N5.51trn, representing a 6.8 per cent increase from the value of N5.16trn recorded in the preceding quarter (Q4, 2013).
A classification of the exports by sectors indicated that crude oil component continued to dominate export trade, contributing 81.5 per cent of total export trade value, with both crude and non-crude components remaining as key drivers of growth.

The NBS reported that the crude oil component of export trade grew by 8.4 per cent from the preceding quarter, and contributed up to 51.1 per cent of the total growth in exports, whereas the non-crude component of trade grew by 48.6 per cent, accounting for 48.9 per cent of the total export growth from the previous quarter lower than the value of in the preceding quarter.
Other significant categories of the export trade structure showed that boilers, machinery and chemical appliances, valued at N92.2bn or 2.3 per cent of the total, and vehicles, aircraft and associated parts valued at N89.6bn, also 2.3 per cent of the total.

By individual product, natural liquefied gas held the second highest exports value, with N330bn or 8.3 per cent of the total during the period under review.
On the import side, the structure showed that imports trade was dominated by boilers, machinery and appliances, which accounted for 23.7 per cent.

Items that contributed notably to the value of import trade in the quarter were mineral products, which accounted for 16 per cent, vehicles, aircraft and associated parts, 13 per cent, base metals and articles of base metals, 9.5 per cent and products of the chemical and allied industries, 8.5 per cent.
The NBS stated: “Import trade classified by Broad Economic Category revealed that industrial supplies not elsewhere classified had the greatest value with N435.3bn or 28.2 per cent of total imports. This was followed by capital goods and parts, with the value of N344.4bn or 22.3 per cent and transport equipment and parts, with N222.6bn or 14.4 per cent of the total import value.

“At the product level, motor spirit holds the greatest value of imports, at N192.5bn or 12.5 per cent of total imports for the first quarter of 2014. This was followed by spelt, common wheat and meslin with N54.2bn or 3.5 per cent, and machine tools for working stone, ceramics, concrete etc, with N46.5bn, or three per cent of the total value of imports.”

Thursday, October 2, 2014

Now 5pm on Thursdays-Import-Export Helpline On Inspiration FM

The Tariff On Imported Vehicles

THE sudden implementation of the outrageous 70 per cent tariff on imported new vehicles after government had earlier suspended same is an assault on the sensibilities of weary Nigerians who already bear the heavy burden of a battered economy.

The development has justifiably drawn the ire of stakeholders, including clearing agents and freight forwarders.

Even though second-hand vehicles are excluded at the moment the vexatious tariff is not in tandem with a people-oriented auto policy. Indeed this surreptitious implementation of the tariff regime underscores the inconsistency or policy somersaults that are the hallmarks of governance in Nigeria.

The Customs authorities had earlier confirmed the suspension of the tariff till January 1, 2015 but later recanted and began collecting it without notice. They claimed that this action was based on a circular from the Federal Ministry of Finance to that effect, to the shock of all stakeholders. Since the Ministry of Finance has not owned up to the purported circular, there is enough reason to assume that the Customs Department is merely acting alone to meet its 2014 revenue target.

Expectedly, stakeholders have protested the new tariff. The National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), described the policy as anti-people, adding that it has the potential of increasing the hardship faced by Nigerians.  Also, the association of clearing agents and freight forwarders withdrew their services at the ports and decried the hurried implementation of the tariff.

Under the new automotive policy, government had raised the duty and levy payable on imported new and used cars from 20 t0 70 per cent on the excuse that it was encouraging local production of automobiles. The amount is made up of 35 per cent duty and 35 per cent levy. This has made cars unaffordable to the average Nigerian.

Obviously, the development amounts to putting the cart before the horse. Such a protective tariff ought to be imposed after local auto plants had begun rolling out new vehicles in large numbers and at affordable prices. Then consumers would have the choice of patronizing local manufacturers or paying the heavy duties on imported ones.

Except something is done to redress this anomaly, the new automotive policy can be deemed to have fallen prey to greed and avarice. Implementing a crushing tariff without first rolling out locally manufactured Nigerian cars is absolutely in bad faith.  It puts into question what the Nigerian government’s intention really is. Is it to exploit Nigerians and rake in billions as being insinuated or have cars produced locally as promised?

A few units being rolled out notwithstanding, certainly a lot still needs to be done to make the dream of local car production a reality. 

The new tariff should therefore be put on hold until the necessary groundwork is done to save Nigerians the hardship that its implementation in this present form and circumstance will certainly inflict. Its continued implementation negates the principle of fairness and opens the Jonathan administration to accusations of poor judgment and character. The President had assured that the implementation of the policy would not inflict pains on Nigerians. With what is happening at the moment, what is the President’s word worth?

Sadly enough, government appears intent on not heeding expert advice. Various stakeholders have repeatedly warned of the dangers of implementing the policy without first putting the necessary infrastructure in place. Uninterrupted electricity and good road network have been identified as critical and both are grossly unavailable in Nigeria.  

At this juncture, it is important to tell the authorities not to feign ignorance of what the right thing is to do. They cannot be so insensitive to the plight of the citizenry as the tariff can only have a negative impact on the economy impose greater hardship.

The new cars are not readily available yet and the majority of Nigerians can’t afford the imported ones as a result of the astronomically high tariff. That places many individuals and businesses in jeopardy.

Government should review the tariff, especially in the face of the current lack of a viable alternative to imported cars. Local production of vehicles is a good plan but until then, citizens need not be over-burdened. The tariff implementation could be done in phases depending on the level of vehicle production.    

Full implementation could then be considered once local vehicle production reaches an appreciable level. And this depends on the provision of necessary infrastructure which is lacking at the moment.
The automotive policy is a lofty strategic development agenda but it should follow a logical sequence.

FG Adopts New Pre-shipment Inspection For ‘Tokunbo’ Vehicles

The Federal Government on Tuesday said it would begin a new pre-shipment verification of conformity to standards on used vehicles coming into the country.

The Director-General, Standards Organisation, of Nigeria, Dr. Joseph Odumodu, disclosed this while speaking shortly after the signing of an agreement for the implementation of the conformity to standards of used vehicles.

He said the move was part of efforts aimed at ensuring the successful implementation of the new automotive policy of the government.
Odumodu said since the Federal Government had decided to make the automobile industry a key component of the Nigeria Industrial Revolution Plan, the sector had been identified as a strategic industry group.

This, he added, was due to its large domestic market, labour intensive characteristics, strong industrial linkages, and existing installed base and export potential into the Economic Community of West African States’ market.

The SON boss said that out of the over 2,000 parts that made up a typical car, the government mandated only about 120 safety and environmental standards.
This, he added, called for the need to institute a regime that would ensure the effective enforcement of the standards and monitor their compliance.

Odumodu stated, “While some measures of progress have been recorded in the fight against the scourge of low quality imports to Nigeria over the years, there is general consensus that the absence of a regime to determine the quality of used motor vehicles imported into Nigeria has not achieved the desired effect.

“It has resulted in the situation where many vehicles that have exceeded their permissible and useful life span continue to dominate the motor vehicle imports into the country.
“This has almost made Nigeria to become a dumping ground for substandard vehicles, because the focus since the inception of the SON conformity Assessment Programme has been skewed in favour of products other than motor vehicles and other heavy duty equipment.

“We have decided that as part of the SONCAP regime, a separate pre-shipment verification of conformity to standard on used vehicles be implemented by the organisation.”
To ensure effective implementation of the programme, Odumodu said three companies had been accredited by SON. They are Quality Assurance Projects Limited, Medtech Scientific Limited and Cotecna Destination Inspection Limited.

The accreditation, according to him, will cover vehicle structural, mechanical and safety inspection; vehicle emission testing; valuation and appraisals of vehicles; odometer inspection and verification; and regulatory documentation, verification and authentication.

Tuesday, September 16, 2014

Training on Growing Bank's Deposits & Income through Effective Sales to Trade Customers

Intensive Training on e-form, Import Trade Regulations & Processes In Nigeria

Nigeria To Double $40bn Trade With Asia By 2016

VENTURES AFRICA – Nigeria is keen to bolster economic ties with the world’s most populated and fastest growing region Asia, as has agreed to double its bilateral trade volumes with the regions’s countries from $40 billion to over $80 billion within the next to two years.

This decision was made at a stakeholder meeting between the Nigerian Ministry of Industry Trade and Investment and Nigeria’s ambassadors across fourteen Asian countries in New Delhi, India.

Two growing partners, Singapore and Australia have trade relations worth N293.4 billion ($1.8 billion) and N534.3 billion ($3.3 billion) respectively, while India and China – the two largest Asian trading partners of Nigeria – have their trade deals with Nigeria worth N2.95 trillion ($17 billion) and N2.143 trillion ($14.8 billion) respectively.

Aside from boosting bilateral trade relations with existing partners, the meeting which was the first of its kind in over 50 years will see the it open fresh investment commitments to major Indian companies, who were not yet present in Nigeria.

“It is only those who live in the past that still believe that the West can help us. The Asian continent has great regards for Nigeria as a country,” Nigerian High Commissioner to India, Ndubuisi Amaku said.

Nigeria is shifting its attention from the West to Asia which has been declared by Economists the fastest growing region in the world, the only continent to outpace Africa’s surging numbers.

Nigeria-India Trade Volume to Hit $20bn Says Indian High Commissioner

Indian High Commissioner to Nigeria Shri Ajjampur Rangaiah Ghanashyam has disclosed that the volume of trades between Indian and Nigeria, which currently stands at $19.5 billion, will increase to over $20 billion by ending of the year.

Speaking to journalists after the Diplomatic Dialogue Series organised by Nigeria Leadership Initiative (NLI) in Lagos, Ghanashyam said the trade relationship between the two countries spans different sectors of the economy including education, health, industry and Information Technology (IT).

He said: "This is the only country where Indian companies are run by Nigerians and Nigerian companies run by Indians so there are many sectors of business that bring about collaborations. This kind of relationship is unique only to these two countries. You may not find it in any part of the world.”

Ghanashyam said Nigerian government is currently partnering with the lndian government in the development of Nigeria’s power sector, adding that Nigeria is exploring ways of adopting the lndian power sector model as a way of transforming her power sector.

According to him, currently, Nigeria is in partnership with TaTa of lndia to produce 10,000mw of electricity. Comparatively, lndia has achieved over 400 per cent leap in generation capacity in the last 10 years. 
"This has nothing to do with problem of insurgency in some part of Nigeria. In fact, we believe that those areas that currently experience the challenge of insurgency need some kind of assistance. We cannot stop connecting with some areas just because they have some challenges today," the High Commissioner said.

Ghanashyan however expressed regret on the issue of double taxations, which he noted, has been affecting Indian businesses in Nigeria. He said since his assumption of office he has taken it up as a challenge and has sent in correspondences to the Federal Ministry of Finance on the development. He expressed confidence that the issue would be addressed in due course.

"The last figure I have about volume of trade between India and Nigeria as at April 2014was $19.5billion. And it is still growing. The relationship is growing by the day, by the week, months and year. And the trade will shoot beyond $20 billion before the end of the year," Ghanashyan said.
Also speaking, the President, Nigeria-India Chamber of Commerce and Industry, Dr. Umo Itsueli said considering the rising growth rate in the economies of both nations, it is only expedient that the trade relationship is strengthened. 
In his remarks, the Chief Executive Officer of NLI, Yinka Oyinlola said the aim of organising the roundtable discussion was to see that business relationships between Nigeria other countries are not only focused on countries of the North but also countries of southern hemisphere where India is a major key player.

Customs Boss Seeks Stakeholders’ Collaboration to Address PAAR Challenges

The Comptroller General of the Nigeria Customs Service (NCS), Alhaji Inde Abdulahi has called for collaboration between NCS and stakeholders in the maritime sector, especially licensed customs agents to address the challenges still being experienced with the introduction of Pre -Arrival Assessment Report (PAAR) in the cargo clearance regime.

Speaking on the sidelines of the 60th anniversary and official inauguration of the new permanent national secretariat of the Association of Nigerian Licensed Customs Agent (ANLCA), Abdullahi said rather than apportion blames, stakeholders should come together to harmoniously find a lasting solution to the identified challenges in the issuance of PAAR.

Abdullahi’s position was in response to the National President of ANLCA, Olayiwola Shittu’s welcome address at the ceremony, when he called on the Customs boss to set up a committee involving very responsible members of his association to look into the complaints of agents concerning the PAAR.

Shittu’s words: “I will fail if I do not tell you about the yearnings of our people. You have tried and your name will be in the history books for life. You may be in Abuja, but do not know everything that is happening on the field.  Our people are crying. I know we are here to celebrate, but please, help us address the issue of PAAR.

“PAAR is the best ever existent clearing document established by any Customs authority all over the world, and this was also confirmed in South Korea. We decided to embrace PAAR because it is a facilitator and world customs brokers who we are members recognised PAAR as a sample for other countries. But some Customs officers and agents may be a stumbling block and I believe it is not your fault that you brought something good to the country”.

However, Abdullahi noted that some of the hiccups could not be completely ruled out, according to him, the beginning of every endeavour will always be met with challenges.

He said it was not in the interest of the service providers to hand over the reign of Destination Inspection to the Nigeria Customs Service (NCS) as they abandoned some unfinished Risk Assessment Report (RAR) documents to the service.

“PAAR is Nigeria’s creation. It is Customs’ creation and it is just nine months. As human beings you should know that every beginning is difficult and we must expect teething problems from the beginning. Do not forget that people who left did not want to leave so they will leave behind a lot of problems, which will cause problems between me and you. So I think it is better we sit down and look at it intelligently and bring about the solving of that problem harmoniously,” he said.

Abdullahi maintained that the erstwhile three service providers will no longer perform Customs job or collect duty on its behalf, hence the need to critically look at addressing the problem rather than the blame game.

“Let me assure you that even if I leave the Comptroller-General position, no other agency will come back and collect duty on behalf of the  NCS, so it is better while we are perfecting whatever is the problem, let us look at it and solve it between ourselves,” he said.

Friday, September 12, 2014

Africa Spends $35bn Importing Food Annually – Adesina

Nigeria’s minister of agriculture and rural development, Dr Akinwumi Adesina, has said that given the abundant endowment in Africa, the continent should not be spending $35billion annually on food importation.

Adesina made this observation yesterday in Nairobi, Kenyan capital, during the official launch of the Kenya-Nigeria Agribusiness Forum and the signing of MoU on bilateral trade between the two countries.

“With the unfolding global realities, where you are going to have the greatest impact is in making agriculture a business everywhere in Africa,” the minister posited.

“Whether in seeds, fertiliser, storage, processing or adding value, everything about agriculture is business. That is why I don’t understand how Africa will be spending $35billion every year importing what it produces. It should be producing a lot more. Africa has no business importing food.”

Adesina noted that “Africa should be a dominant player in global food and agricultural market,” adding “we have land and water; we have cheap labour, and so, we should be dominant. We shouldn’t be spending $35billion a year importing what we produce. Because if we do that, we export jobs; we decimate our own rural economy; we fast-track the whole process of rural-urban migration and we have congested cities.”

His Kenyan counterpart, Hon Felix Koskei, lamented the backward state of agriculture in the continent and in Kenya and Nigeria in particular, observing that “the dominance of primary production and marketing in crude forms are common to Nigeria and Kenya. These translate to low prices, few job opportunities and low income for farmers. Changing these will increase the income to our farmers.”

Koskei too wondered why Kenyan tea has to make a detour to another African country after first going to Europe. He disclosed that Kenyan tea comes to Nigeria through Europe under different trade names, but called for an end to the trend.$35bn-importing-food-annually-%E2%80%93-adesina

Monday, September 8, 2014

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INTERVIEW: How we transformed NEXIM to a global trade policy bank – MD

On August 18, President Goodluck Jonathan reappointed Roberts Orya the Managing Director of the Nigerian Export-Import Bank [NEXIM] for a second five-year term.
In reappointing him, the government credited Mr. Orya with transforming NEXIM from a bank with over N10 billion non-performing loan liability in August 2009, to an institution with a capacity to provide about $39.5 billion in financial intervention and guarantees to support non-oil export activities in the country.

“In 2009, the loans portfolio of the bank was about N14.6 billion, out of which about 72 per cent was non-performing, with about N10.03billion, or 69.05 per cent classified lost, in line with the prudential guidelines of the Central Bank of Nigeria, CBN,” the finance ministry said.
Roberts Orya was appointed Managing Director/CEO of NEXIM Bank on August 14, 2009. A graduate of Banking and Finance from the University of Ibadan, Mr. Orya, who also has a Masters in Banking and Finance, has over 29 years of experience from working in several Financial Investment, Commercial and Mortgage banking institutions in the country.

His banking career began in February 1984 when he joined International Merchant Bank, IMB, Plc, where he worked till September 1990 before leaving to join Credite Bank of Nigeria Limited as a pioneer staff. Mr. Orya was then seconded to Prime Merchant Bank Limited in July 1991 as Head of Foreign Operations and subsequently to Pace Mortgage Finance Limited in October 1992 as the General Manager/Chief Executive Officer.

Thereafter, he joined Lobi Bank of Nigeria Limited in January 1994, where he rose to become the Managing Director and Executive Chairman in January 1998 before being reassigned to Premier Commercial Bank Plc as an Executive Director.

Mr. Orya’s was also Afribank Capital Limited’s Executive Director in charge of Capital Markets, Financial Advisory Services and Research & Strategy. He is Associate Member, Chartered Institute of Bankers of Nigeria and London; member, Certified Pension Institute of Nigeria and Nigeria Institute of Management, NIM, and member, the Institute of Management Consultants.

In this interview with PREMIUM TIMES, Mr. Orya spoke about his stewardship at NEXIM.

Congrats on your re-appointment by the President for another term of five years. Will you say in good conscience that you deserve this new term? What transformation have you brought into the bank in the past four years?
NEXIM was set up in January 1991 by an Act of Parliament No. 28. Its primary mandate was to use deepen external sector of Nigerian economy. The specific focus was how Nigerian economy could diversify from oil.

NEXIM was to provide finance and risk bearing facilities (credit insurance and guarantee), trade and market information. On my assumption of office, provision of business advisory service to small and medium-scale enterprises, SMEs, was added.

NEXIM’s attention has been on Nigerians engaged in non-oil exports. By August 2009 when my management came in, the bank was virtually in disarray. Its mandate was not properly prosecuted. The bank’s financial and operational performances had deteriorated to alarming proportions, apart from several other corporate governance issues.

The loans portfolio on ground ran into about N14.6 billion. Out of this, about 72 per cent was non-performing, with about N10.03billion, or 69.05 per cent classified lost, in line with the prudential guidelines of the Central Bank of Nigeria, CBN.

The greatest challenge at the time was that NEXIM had no funds to pursue its mandate. Its authorized and call-up share capital was only N50 billion. But, when my management came in, only N17.26 billion was contributed by the stakeholders for almost 20 years, cumulatively.
There was an outstanding debt of about N32.74 billion. It was absolutely very difficult to even create new loans, new risk assets and operate profitably. Out of the amount, the CBN, one of the shareholders, had given just about N6.7 billion for 20 years. The other shareholder is Federal Ministry of Finance incorporated. Both own NEXIM in equal proportion form the N50 billion they are supposed to give to the bank.

The CBN was reluctant to give more money to an institution that had completely derailed from its mandate. Clearly, the CBN was not interested in sinking more funds, since the one it had given before appeared to have gone into a bottomless pit. There were no returns on investment. The money given was equity to yield some returns.

It was obvious the shareholders knew the money given for the bank’s operations had opportunity cost. If money was not used to service Nigerians through the bank, CBN believed it could have done so in some other sectors to the benefit of Nigerians.

Even the N17.26 billion equity contribution was depleted by accumulated losses to about N9.13 billion. That was the amount we met in the books. There was significant decrease in income. The quantum of loans the bank could charge interest on or push to its profit and loss account and boost its bottom line was drastically reduced. The bank’s record keeping was completely in tatters. The overheads were escalating by the day.

In August 2009, the latest management account was for April 2009. It was clear the previous management did not capture records of transactions on a daily basis, a practice routine to smaller institutions.

That was the picture how NEXIM was run before we came. There was no strategic focus on where the bank was going and what the objective targets were. The bank was more like a rudderless ship. The bank was distracted from its core mandate. NEXIM was not set up to finance oil and gas industry activities. But, at the time, it was lending to both oil and non-oil businesses, including importation of petroleum products.

There was complete absence of risk management framework. Even the corporate governance framework in place then was observed largely in breach. Yet, these are two key pillars a banking institution like NEXIM cannot afford to ignore.

The staff strength was over-bloated, with significant skill gaps. They could not drive anybody’s investment vision. Most of them had no idea what the industry was all about, nor what NEXIM stood for. Little wonder the management could not push through its strategic vision.
What’s worse? The bank had no visibility. Nobody knew there was a bank like NEXIM. The few who knew did not know what purpose it was to serve. No effort was made to project its significance and objectives.
When we came in, what we did was to work out ways to reverse these problems and allow the bank operate its mandate profitably and contribute significantly to Nigeria’s economic development.
What did you do with over N200 billion stabilization fund CBN was said to have given NEXIM?
N200 billion stabilization fund to NEXIM? From where? That’s a shocker to NEXIM management? Over 23 years of its existence, NEXIM has not received from the CBN, cumulatively, N200 billion for stabilization, guarantee or any other purpose. No such money has come from any other government agency either. If one were to aggregate all funds to NEXIM from all sources as loans and other forms of financing for over 23 years, it is not up N100 billion.
What stabilization fund means is not quite clear. My view is that the claim was from a mischief maker for reasons NEXIM was not aware of.

Has NEXIM under your management met its target?

Absolutely! When we came in, we did not want to approach our shareholders for money. We needed NEXIM to recover and refocus on its strategic direction on its own. First, developed a five-year strategic plan to define NEXIM’s vision, mission and objectives to pursue. Though money was a major constraint, we looked at the sectors with potentials to create jobs and grow the economy.
The non-oil sector is very large, but we decided to select just four sectors with high great potentials to generate jobs for Nigerians, give the country foreign exchange and alleviate poverty. These were manufacturing, agro-processing, solid minerals and services, that made up our MASS agenda. Under services, we said we would focus on financing hotels and tourism; transportation – road, air and sea, and the creative and entertainment industry, because of youth involvement and the intellect they have. We resolved to work out ways to assist the youth.

We also defined five strategic objectives to push through our MASS agenda. First, have a clear market focus and become a major contributor to non-oil sector. Second, build a world class institution imbibing best in class corporate governance principles and risks management practices. Third, be a relevant player in export market and significantly influence government trade policies. Fourth, build a profitable institution with a robust balance sheet. Fifth, build a highly skilled and motivated work force.

How many of these have been achieved in the last four years?
All! First, from the stand point of financial performance. In NEXIM’s entire history, I am proud to say this is the very first time it is making profits from year one to four consistently and paying dividends to its shareholders – CBN and the Federal Ministry of Finance Incorporated. The 4th year is still undergoing the auditing process for the year ended December 2013.

Second, in terms of the financial intervention and support to non-oil exporters. NEXIM was able to give about N35.46 billion between August 2009 and today. We also gave guarantees of $27.3 million. When everything is converted, total support from NEXIM comes to $39.5 billion. The support helped create over 24,000 direct jobs for Nigerians. These jobs are capable of generating estimated foreign exchange of $320.12 million annually to the Nigerian economy.

Third, on non-performing loans. NEXIM considered almost N10 billion lost. Not that the bank did not have the capacity to go after the debtors, the previous administration lacked the will to do so. So far the bank has recovered about N1.9 billion.

The profit has been quite substantial. But because of the huge bad loans we inherited, it ate deep into the final profit. For instance, in 2010, which was the first full year we did, we made over N800 million. But, by the time provision for those legacy bad accounts were made, it came down to only N189 million.

For 2011, it was even better, with a profit of N1.29 billion. But the legacy accounts took the figure down to about N71 million. However, for 2012 we made a profit of N348 million. We have made a recommendation to the Board for approval to pay the shareholders.

Fourth, we have entrenched good corporate governance, which was lacking. When we got in, risk management strategy was not there. Today, we have restructured the bank’s credit policy. Formerly, a loan would move from the Business Development Department straight to the Executive Council, credit Committee and to the Board.

Today, all these have been reviewed. We have reinforced the credit process by ensuring everybody was involved. Now, before a credit application gets to the Executive Committee on its way to the Board, it must leave the Business Development Department to the newly created management credit committee, MCC in the middle made up of all head of departments, irrespective of whether they are in operations or not. Until that credit passes the MCC, it can never get to the Executive Committee.

We also made sure that no executive committee member, Managing Director or Executive Director has an individual lending limit. Every credit must pass through that process to be approved. So, if the Managing Director wants to influence the approval of a credit in favour of any interested beneficiary, he has to lobby all the heads of department to agree to pass the credit, which is not possible.

These are ways we enhance credit control. Because of the legacy bad accounts the bank inherited, we said going forward, we do not want these kinds of bad debts. We made sure that at the MCC, the Chairman is the Chief Risk Officer of the Bank. If he says the credit was not yet good to go to the MCC, it would not go. That is how we have re-engineered the credit process.
Fifth, we have been able to rebrand the bank. Before now, NEXIM had no visibility. Today, NEXIM is known globally. Even within Nigeria, a lot of awareness campaigns are ongoing every quarter in all regions. Any state government involved in any entrepreneurship business, or training people engaged in business, NEXIM must be there to create that awareness.

Before we came in, EXIM banks around the world had forgotten about NEXIM. We have now re-established contacts with most of these EXIM banks. The U.S EXIM Bank is now working with NEXIM, which also has a relationship with the African Import-Export, AFREXIM, India EXIM bank, and the ECOWAS bank for investment and development.

NEXIM has signed Memorandum of Understanding, MOUs with China, Turkey and Mexico. NEXIM has been to Malaysia on a study tour when our 5 year development programme was being prepared. All these things have been done to establish a strong corporate governance structure.

We are happy now that we are working closely with all these people. With this NEXIM has been able to attract investment capital by way of commercial lending from some of them. These are not backed with any sovereign guarantee. It is purely on the small balance sheet NEXIM has. These partners appreciate the way we are managing NEXIM.
What’s the volume of investment capital NEXIM was able to attract to the country?
That’s about $80 million.

Are there specific success stories to showcase NEXIM in all this?
Absolutely! One, NEXIM has created a lot of developmental impact in the Nigerian economy, particularly in terms of jobs for the people and foreign exchange we’ve attracted.
Two, NEXIM has transformed from a loss-making organization to one making profits consistently. This has encouraged our shareholders to support us in all we do. They now believe NEXIM has a management capable of giving them returns on their investments.

Consistently, for the past four years, our management has achieved what has never happened in the bank before. NEXIM was rated the best development finance institution in Africa in 2013.
One remarkable achievement since our management came in we want to showcase was confirmed by the recent rebasing of Nigerian economy’s gross domestic products, GDP by National Bureau of Statistics, NBS.

When we came in, the question was why people said South Africa was the largest economy in Africa. NEXIM’s finding was that in South African, the level of informal trade (unrecorded trade activities) was very small (less than 15 per cent of total economy). In Nigeria, level of informal trade was more than 60 per cent. Our interventions helped grow the contribution of informal trade to the country’s economy.

How did NEXIM achieve this?
NEXIM: In places like Kano, Katsina, Seme border, Maiduguri (before the advent of the Boko Haram insurgency), Calabar and other border communities in the country, huge trading activities have been going on between small and medium scale enterprises and neighbouring countries. These trading activities are not always recorded when the country’s GDP was being computed, even when most of them have been trading for more than 20 to 25 years.

These traders also walk across to other countries to sell their goods and return to the country with the cash in their pockets. Such trading activities do not add any value to the country’s economy, because the payment system is not structured to achieve that purpose. NEXIM needed to come out with a product that captured and recorded Nigeria’s trade activities and deepen the payment system.

What’s NEXIM effort at promoting regional trade?
Traditionally, the market for non-oil export is Europe. But, sadly the country has not yet gotten to a level of producing goods that make the country very competitive, because of the high standard that the European Union has specified.

What NEXIM did was to look at how other EXIM banks in the world were able to grow to the level they have attained and develop a capacity that would make them go to other economies and compete favourably.

What we found out was that the famous EXIM banks in the world segregated their foreign markets into two distinct types. Their regional market (in Nigeria’s case – ECOWAS) is our traditional market. Any market outside ECOWAS, becomes their non-traditional market. Therefore, they would never venture out of their traditional markets. They would first trade among themselves; understand the technicalities involved in international trade; deepen the payment system; get the goods to the standards required, before they venture out.
Even when they are going out, their respective governments (in this case Nigeria or Ghana) would follow their exporters with risks mitigating instruments to protect them against non-payment, political risks and other uncertainties.

Our analysis revealed that we have huge potentials in ECOWAS sub-region. We then asked, if so, why didn’t NEXIM develop a product that would first formalize the country’s trade and deepen the payment system as well as ensure regional integration?
We came up with the ECOWAS trade support facility, which was launched in April 2010 with about N2billion. The facility have some generous terms to encourage Nigerians to draw from and trade within the sub-region.

All other EXIM banks in the world were coming to the sub-region to set up their shops, since this was where the highest return on investment came from. Unfortunately, Nigerians have always abandoned this market and get to those that would not offer them opportunity to compete effectively.

How has NEXIM facilitated market competitiveness?
Interestingly, everybody accepts NEXIM has responsibility to encourage trade within the sub-region. After about nine months, we went back to the market to meet the exporters, to find out what challenges they had. We found out that Nigerian exporters were having enormous challenges in moving their goods from Nigeria to other markets.

The only major means of moving goods in the country has been by road, which has obvious challenges, including multiple check points, harassment from security agencies, bad roads and other associated costs.

What that means is that if a businessman was given a loan of $5 million to produce goods conveyed in about 20 containers, he would have to put about 20 trucks on the road to battle with these challenges all the way to the market.
NEXIM then realized why the country’s traditional trade activities were very low at about 8 per cent. To move the entire goods easily in international trade, it has to be by sea. NEXIM, as Nigeria’ trade policy bank, acknowledged these challenges as a non-tariff barrier. Within ECOWAS sub-region, there are about 318 million people, with Nigeria controlling over 50 per cent of that population. Even in terms of political and financial institutions, if Nigeria says yes, then it is yes, and vice versa.

Nigeria is obviously the dominant trading partner in the region. If one gets to the markets, products there are mostly from Nigerian markets. Neither the President nor Minister of Trade can decide how to overcome these non-trade and tariff barriers. It is NEXIM, which is in charge of the country’s trade policy that would come up with initiatives to tackle that.
NEXIM is a government agency. It does not lend money to government, because government does not trade. The private sector does. Then we asked why NEXIM was not facilitating setting up of a cargo shipping company to be owned and driven by private sector. NEXIM’s role under that arrangement would only be to facilitate.

How is NEXIM facilitating that process?
NEXIM: Early in 2011, NEXIM’s Board approved the initiative. Two consultants were engaged, one each from ECOWAS and Francophone sub-regions. The consultants went through the 15 member states of ECOWAS, conducted a search and came back with a report that about $60 million would be needed to procure the vessels, and about $1.5million to create a special purpose vehicle to be used as a platform to raise money for the proposed trans-ECOWAS shipping company.

When the consultants went round, they met with officials of the Federation of West Africa Chamber of Commerce and Industry, FEWACCI, who exclaimed that they had been pressurizing ECOWAS Commission for over 5 years for a grant to conduct a study. We co-opted them into the project.

When the draft law was presented, we asked the consultants to go to Cameroun, despite not being a member of ECOWAS. In Cameroun, the people there know all about Dangote products from Nigeria, from sugar to indomie and other pastas and products.

While in Cameroun, the consultants met with one of the biggest logistics companies based in Central Africa, TRANSMEX, which was on the verge of procuring some vessels to enhance their logistics operations. When they looked at NEXIM model, they requested to join on the project. We accepted. TRANSMEX is today on the Board with NEXIM.

A special purpose vehicle was set up called Sea-link Promotional Company Limited, with a member of FEWACCI as the Chairman. The group is the only known body of traders within ECOWAS region.
Presentations of the shipping model were presented to the ECOWAS Commission, ECOWAS Parliament and to several international fora on the need to have a sea-link facility, considering that what was on ground was so bad.

For instance, to move one’s goods or products from Nigeria to Ghana, with all the challenges mentioned above, it would take about six days by road. But, to move goods from Lagos to Ghana by sea, it would take between 45 to 60 days.

Under that kind of scenario, how can the people trade among themselves? The goods would first be taken to Europe and a trans-shipment done from Europe to Ghana. God save the trader if the goods are perishable.

Where are we now on the sea-link project?
The project has gone very far. Currently, we are doing capital raising of $60 million. We were in Abidjan, Cote d’Ivoire recently for the road show. Another roadshow was in Doula, Cameroun, while the last one would be in Abuja, Nigeria.

Interestingly, even before the public offer, because of the strategic importance of the sea-link initiative, people have been paying their equity. Before the private placement document was out, a lot of people wanted to pay the $60 million capital, but were rejected. It is meant to benefit all 26 member countries in the two regions, with a combined consumer base of 440 million people and GDP of over $700 billion.

The people must be made to have a sense of ownership of the initiative. We would be asking for some concessions from the various governments. So, shares are allocated to various governments at the moment. By the time the offer closes and people from those countries have not taken up their shares, we can recover those shares and allocate them to others.

The efforts our exporters are making within the sub-region are huge. To underscore that, representations at the various consultative meetings come from a very high level of government. Every person is excited about the project. That is the only way we can deepen trade in the region.

What time frame are we looking at for the possible take off of the project?
The offer would soon open, and would take some time to be collated. Between now and September, the allotment of the equities would have been completed and the funds available for all the arrangements to bring in the ships. So far, we have been able to get technical partners from Greece. We want to ensure that between December 2014 and January 2015 we should commence operations.
Since one cannot get the ships off the shelf, we are having a two-pronged approach. First, we would be leasing the ships to allow for the commencement of the project. A new one would be acquired subsequently. Our ships would carry both passengers and goods. Because the two regions would join, there would be another one that would start from Congo Brazzaville to dock at major ports down to Dakar, Senegal.

What would you say are NEXIM’s major achievements?
Our major achievements so far are the dual role NEXIM has played – as development finance bank and commercial orientation. NEXIM has created jobs and supported non-oil exporters and other such benefits to the economy. Since NEXIM does not have money from Federation Account, it has to pay dividend on the monies it is given. We are happy NEXIM is not only a DFI (development finance institution) that flaunts what it is doing. The kind of staff NEXIM has now are highly skilled and professional in their jobs. NEXIM is also an institution with ability to intervene in the creative and entertainment industry.

NEXIM pioneered Mr. President’s policy directive that there should be a way of making people in that industry have access to adequate funding. NEXIM developed operating guidelines and started lending to the industry. We went to EXIM India to learn from their model, because they are the ones that actually lent to Bollywood to help them get to the level it has attained today.
People who have produced their films in America go back to India for post-production. We have been able to give a lot of money to drive and open up the sector. We are also working with some organizations to map the industry.

Till now, we were only talking about the potentials in the creative and entertainment industry. We are working with some other institutions to see how we can reduce these potentials into Naira and kobo, to make it easier for us to know who we are supporting.

How many beneficiaries are there for the entertainment fund?
We have over 3 billion applications from Nigerians all over the world. Looking at the whole value chain of the entertainment industry – from fashion and film production, cinemas and infrastructural platforms and televisions. What we have been able to give out is only about N1.11billion.

What challenges are you facing giving out the loans?
The challenges come by way of how to collaterize the loans. There are certain banking laws that forbid giving out monies without collateral. We are holding them as much as we can on how they can take advantage of this opportunity. Based on our experience from our relationship with EXIM bank of India, we are able to come up with very creative and innovative products that do not necessarily require giving somebody a house or car as collateral to access funding.
EXIM India can lend on the basis of cash flow or insurance products. We brought the Indians to Nigeria in 2012 to ensure that they went to the relevant Ministries, namely Finance, Trade and Investment, National Insurance Commission, NAICOM; Nigerian Communications Commission, NCC; Video and Censor Board, Central Bank of Nigeria, CBN.
In their own case, their Central Bank first of all identified it as an industry and circular, like a forbearance, that if a particular bank was interested in lending to the entertainment industry, they should do so on a particular basis.

A whole lot needs to be done. We have been able to get that report from EXIM India. We are studying it with government, and we believe that at the appropriate time, those policy issues would be made and clearly help people in that sector in accessing funding. To NEXIM, it is all about export of service. NEXIM is excited about what is going on.

Who were the beneficiaries of the loans to the entertainment sector?
They are about eight. But, it must be made clear that NEXIM does not give monies to individuals. Monies are given to incorporated entities. What NEXIM did was to place a lot of emphasis on infrastructural platforms, like cinemas, where there were issues of piracy. When one looks at Nigeria with only about 60 screens today for a population of about 170 million people. In India, they have 13,000 screens. What that means is that Nigeria has 0.36 screen to a lot of people.

NEXIM’s major concern is how to block the issue of piracy. Government is doing so much. But, what one finds is that these people suffer so much. At the end of the day, their work is leaked and somebody somewhere duplicates everything and sell. So, we must find some ingenious ways of letting the people enjoy the efforts they have made.

One of the things we learnt from India, which is applicable to most of the countries, is that one does not send one’s tape out, as most of the banks lend on the basis of the tape. Once the tape is out, some people would not pay the money. They don’t even burn these things into CDs and DVDs the way it is done in Nigeria. The work would be shown on the screen for at least one to three years through the box offices for people to recover their money.

By the time they finally decide they are going to burn them into CDs and DVDs, the person must have recovered his money a long time ago. The only thing we have to do in Nigeria is to have a lot of cinemas.

NEXIM has been able to finance one cinema each in Lagos and Ibadan. Another one is being processed for Kano, which is traditionally a film city. We are also looking at community cinemas in some of these capitals. First, to engage these young people, and secondly to see how we can contain the issue of piracy to encourage people in the entertainment industry to believe that their works would not be pirated.

Government is also looking at how to strengthen the work of the National Copyrights Commission, NCC, so that people engaged in that industry would have the confidence. Right now, how to protect their intellectual property is a big challenge. But, NEXIM believes that is a sector that have young people with very high intellect and can help reduce the high unemployment in the country. We have to tackle it headlong.

How much support has NEXIM been able to give to SMEs as a strategy for job creation?
From Day One, we knew that if Nigerian economy must move forward, considering its structure, the emphasis should be on support to SMEs. One of the first things NEXIM did was to set up the business advisory services, to help some of the SMEs with very good ideas, but no knowledge on how to put them in bankable form. Over 90 per cent of the N39 billion NEXIM has given is in support of SMEs. That is where those small jobs were created. It is those SMEs engaged in those sectors that touch people in the rural areas directly.

If N50 million is given for the purchase of a processing plant, in states like Benue, the impact on agriculture would unimaginable. The way oranges, mango, cassava and tomato produced from the areas are wasting is shocking. There is no preservation facility. And it is only when they are processed that money is made and jobs created. So, NEXIM is emphasizing value addition at that level.

That explains why NEXIM looked at the markets the average Nigerian exporter should focus on when preparing its strategic repositioning. We advised them to focus on West Africa, which has the highest GDP among the various regional economic blocks in Africa. This is where the margins are. It would even make them understand the quality expected to produce when one moves out. The level of trade among ourselves is the lowest. As long as we do not trade among ourselves, other people would come into the region and exploit our market. But, most of the people trading are SMEs.

NEXIM has its own definition of SMEs different from CBN’s and SMEDAN’s. But, we do not go down to the level of N1 million or N2 million. We have a focused market. Every project NEXIM must intervene in must have export content, even if only one or two per cent. We need to deepen the external sector of Nigerian economy. We’ve got a market close to them. If one is producing here and selling in Benin Republic, even if one per cent, at least something is coming in.

Some SMEs complain about the difficulty in accessing financing in NEXIM. Is there any standard they must meet to facilitate access?
Most of the customers are not able to bring a proposal in a bankable form. There are lots of misconceptions about NEXIM and government bank. When people are coming to NEXIM, they come with the notion it is government bank that should just give them money. May be that was what was happening before we came. What I tell them is: Sorry, it is no more possible. I have never worked in a government bank, but one with simple processes that must be followed to secure a loan. Most of them are not interested in that. When requests for documents are made, they would not comply.

The truth is that it is not difficult to access loans from NEXIM. We are very accommodating. NEXIM tries to support exporters as much as possible to see how they can access funding, especially for those sectors we are focused on. So, the difficulty is actually from the project promoters. Most of the projects NEXIM is financing are green field projects. Some of them have grown so big they are among CBN’s 100 exporters. So, my advice is that people should just comply with the simple process of documentation. As a bank we work with documentation.

Has NEXIM been able to attract financial assistance from international finance organizations, and for which sector?
NEXIM has been able to leverage on its small balance sheet to get some investment capital into the country. We have a lot of offers from other EXIM banks, but we have not been successful in them, because our balance sheet is small.

To boost our prospects, NEXIM engaged its shareholders, especially now that the country’s economy has been rebased. The prospects of trade has become very important. When one looks at that over 96 per cent of the country’s export revenues come from oil, there is need to diversify the sources of the country’s export earnings. Even with our small balance sheet, NEXIM was able to get Nigeria into the Organization of Economic Cooperation and Development, OECD in 2013. That’s another achievement.

The world is in love with Nigeria, because of her huge potentials. With an authorized share capital of N50 billion, which has not been fully paid, NEXIM is trying its best to attract investment capital on a commercial basis. Government also caused African Development Bank, ADB to give NEXIM $200 million in 2011. We are yet to draw down on the money. The first tranche of $15 million would soon be actualized. This is an indication that government too is committed. With the level of engagement NEXIM has, there is no doubt that something positive would come up.

Any room for partnership with other financial institutions like the BOI in managing some funds for SMEs?
NEXIM has a different market focus. A state government can go into partnership with BOI and look at the micro institutions like rural women. NEXIM has a specialized market, where people who understand what it takes to export are found. If NEXIM has that kind of collaboration, it cannot lend to a state government. We can only lend to private sector. What government can do is to ask NEXIM to step in and help if its intervention funds in a particular area is not well utilized.
For instance, NEXIM is in the forefront of structuring the solid minerals sector. NEXIM brought the Miners Association of Nigeria, MAN together and empower them to organise all the artisans into cooperatives and have control. Government has done a lot in mapping the industry and providing information for the operators. NEXIM, as a DFI has been in the forefront of bringing these artisans together under one association of miners.

NEXIM was inspired by what it saw in South Africa. From the total $94.21 billion realized from exports in South Africa in 2011, almost 60 per cent came from the mining sector.
Nigeria’s natural endowments are more than South Africa’s. There are solid minerals in commercial quantities. Yet, the contribution of solid minerals to Nigeria’s GDP is virtually nothing. What this says is that Nigeria has huge potentials and resources buried in the ground and nobody seems to be looking at it. Therefore, NEXIM felt this is one sector that needed to be given attention. NEXIM has lent so much to that sector now.

Based on the potentials of these minerals, how many of these non-oil sector products have NEXIM been able to help develop?
We have intervened in about six sectors, including marble in Kaduna; gold in Zamfara; barite in Port Harcourt and Nasarawa state. A lot of commercial banks run away from solid minerals industry. They believe it is high risk. But, that is where as a DFI, NEXIM should get into, de-risk the industry, and make it attractive for commercial banks to come in and play. Once that is achieved, NEXIM can move out to other unserved markets. That is what NEXIM is doing.
NEXIM is also looking at the issue of laboratory in the sector. Right now a lot of mineral samples are taken outside the country, whether they’ve been evaluated correctly or not. The country has only two laboratories in Enugu and Kaduna. NEXIM is looking at how to support those kinds of programmes, so that people don’t take their samples outside the country.

What’s the level of achievement under the buyer-credit scheme?
This line of credit is given to help exporters from a particular country have easier access to finance. NEXIM wants to build that kind of foundation. When one gets to most of the markets within the sub-region, one finds Nigerian products. In that situation, Nigeria might decide to give a line of credit through NEXIM to a financial institution, may be a similar EXIM bank in Ghana, to help potential buyers of the country’s products access that facility to empower them purchase those products.

NEXIM has $20 million from EXIM bank of India for that kind of facility. That money cannot be used for any other transaction other than those from India, either in terms of acquiring equipment people want to import, or industrial raw materials that would help produce exportable goods.

NEXIM has set up ECOWAS trade support facility since, before now, people were doing their businesses in cash. By 2015, NEXIM should begin to give about N1 million to any country in West Africa that we believe have more of Nigerian products in their market.

If people are not encouraged upfront to make payments through the banking channels, how then would they take advantage of such money? That is one of the reasons we established the ECOWAS trade support facility.

Now that Nigeria is the largest economy in Africa, the country has gotten to a level where it should begin to give back to some of the countries that consume most of her goods to create an easy market access for her exporters. The facility is to develop and create an easy market access for our exporters.

Despite the huge NPL burden, what’s the future like for NEXIM?
NEXIM has a very bright future. From the standpoint of where we are going, the bank has a clear direction where it is heading. The processes are very transparent and functional. The staff are very competent and well-motivated.

Looking at the international community, how NEXIM plays in the global market is very important. The kind of interest expressed about Nigeria is enormous. What has been a major drawback has been availability of funds. At the moment NEXIM has very good projects close to about N100 billion in the pipeline, but no money to pursue all of them. Once there is adequate funding and everything in place, NEXIM has very good prospects. Today, almost all EXIM banks in the world want to deal with NEXIM to deepen trade.

We expect that as Nigeria is now occupying the leading position in terms of economy in Africa, NEXIM must find very ingenious ways of following the country’s exporters to help them have easy market access, particularly as it is a member of OECD Global network of EXIM banks.

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