Nigeria’s export: Our road, still far-Olufemi Boyede

 

Olufemi Boyede, a Certified International Trade Professional, is the CEO of Koinonia Ventures Limited, Nigeria and President of Koinonia Global Services Inc., Canada. He has over 30 years of professional experience in international trade and strategy with bias for export business. He is currently the President of the Toronto Hub of the Nigeria & Canada Business Network and recently founded the Nigeria Trade and Investment Centre, Canada.  He has published a lot of journals and has held numerous trade and export development positions in Nigeria and worked with international bodies including the World Bank, DFID, Commonwealth Secretariat and a host of others. He is the originator and convener of the annual Non-oil Export Conference Exhibition and Awards and a host of other interventions in the non-oil sector of Nigeria’s economy. He presently resides in Canada from where he intervenes in numerous international (non-oil export) trade advocacy and logistics issues.  He was in Nigeria recently and interacted with some news men on the nation’s economy as it concerns export trade. Church Times Nigeria was at the meeting.

 

 

You have been a Major player in the non-oil sector for well over 20 years. How will you asses the various policies of government on non-oil export particularly the present government?

 

With all due respect and full sense of responsibility, I would classify the present administration’s disposition to the non-oil export as disappointingly and discouragingly lukewarm.  For an administration that came in when Nigeria was just clawing herself out of the throes of economic depression, it was expected that more serious attention would be paid to non-oil exports.  Unfortunately, the administration seemed to immediately distance itself from non-oil export orientation by basing its diversification agenda on non-oil revenues, particularly TAX… thereby trivializing the non-oil export sector.  I am not playing on language and connotations here.  There is a clear distinction between NON-OIL REVENUES and REVENUES FROM NON-OIL EXPORTS.  A few instances lend credence to my inference that this administration is only paying lip service to exports:

 

  • President recently presented the 2019 Budget to the National Assembly.  In the breakdown subsequently released by the Minister of National Planning, only 5.2 billion was earmarked for payment of export incentives, particularly the Export Expansion Grant.  Going by the trend of EEG paid-outs over the past ten years, I am shocked that Government by this singular action, seems to be establishing a threshold beyond which Nigerian exporters are not allowed to go.  Ironically, a whoppoing N305bn has been earmarked for payment of subsidy on imported petroleum products.
  • The ERGP is a 142-page document.  The first time the word “non-oil export comes up in the entire document is on page 73 and it was just a passing mention of the Government’s commitment to pursuing the NEPC’s zero-oil plan.  The Zero-Oil Plan itself has been evaluated by the International Trade Centre and this United Nations Global Agency for (Export) Trade Development has told NEPC categorically that it does not qualify as an export strategy. That is why Nigerians have been saved the noisome cacophony of ZERO-OIL PLAN that was nearly all over the place for two full years.  So as it stands, we really still do not have a National Strategy on Export Development and Promotion.
  • The Minister of Industry, Trade and Investment just a few days ago released his scorecard since his assumption at the helm of affairs in the Ministry.  Again, I painstakingly went through that report which chronicled some undeniably great strides. Surprisingly, not a single line referred to any achievement in the non-oil export sector.
  • Realising the great forex contribution potential, the administration has recently elevated the office of SSA to the President on Diaspora Matters to a full Nigeria Diaspora Commission.  I have also taken time to go through the Act establishing the commission, its roles and responsibilities and the “initial” action plan, including the Departments and sub-units that will drive the activities, and, shockingly there seems to be no consideration for non-oil exports.  For those to drive this Commission, export development, using diasporas as marketing agents and distribution platforms is key. I have not seen any such indication in the new Commission.

Has Nigeria been able to take effective advantage of global policies like AGOA?

 

Again, my answer here is an unfortunate categorical NO.  And this is disheartening because Nigeria was one of the very first countries on the continent to be availed access to the AGOA market.  At the onset, the Nigerian administration of President Olusegun Obasanjo perceived the potential size and impact of this scheme so much that it created the office of a Presidential Adviser (of Cabinet Status) for AGOA.  A National Technical Steering Committee was set up with the usual hype and fanfare.  AN AGOA Unit was also created at the then Ministry of Commerce & Industry.  Characteristically, nothing came out of all that.  Just like we are busy procrastinating on the signing of the African Continental Free Trade Agreement, Nigeria procrastinated and did not participate at all in the very first cycle of AGOA, ie. 2003-2008.  AGOA was then extended till 2015, and even with Government yet to put her acts together, a few Nigerian companies began to explore the market.  The scheme is still very much extant (until 2021) and I’m afraid to say, we are far, very far, from appropriating the vast opportunities that this market offers.  Over 95% of the trade credited to Nigeria under AGOA is actually CRUDE OIL sales.

 

What in concrete terms do you think should be done to effectively promote Nigeria’s non-oil sector?

 

At the risk of repeating myself so much that I feel like a loud-sounding cymbal, let me say again that non-oil export development is a direct function of a broad-based consultative and generally agreed and adopted National Export Strategy.  Such a Strategy will have a National Strategy Team driving it.  This does not imply a vote of no confidence in the National Agency charged with responsibility for non-oil export promotion.  Rather, it helps first and foremost to establish collective ownership (and therefore, collective responsibility for success or failure).  It establishes synergy (of all MDAs and the Private Sector Associations and sub-groups with stake in the growth of the country’s exports.  Of course, a perfect strategy will also contain an action plan, a monitoring and evaluation mechanism  and be flexible enough to be subjected to regular, if not continuous modification.  Resources for its implementation will have to be budgeted for (and must be outside the usual running budget of the NEPC.  Above all, the Team as whole, must be made to report to an authority higher than the Nigerian Export Promotion Council.  In the case of the United States of America that I am so fond of citing, the Team was actually of Cabinet statyus and reported directly to President Obama.  The lowest ranking member was the Secretary (Minister) in charge of the relevant agency and Heads of the Private sector players.

 

Several months back and apparently in reaction to a similar case I made on the  NTA programmes “GOOD MORNING NIGERIA” and on NTA’s TUESDAY NIGHT LIVE” the NEPC quickly “constituted and inaugurated a National Export Promotion Committee.  Obviously because the depth and import of my suggestion was not fully understood,  I dare to say that apart from serviced meetings, I, like millions of Nigerians, am yet to see or hear of any concrete achievements of the committee.

 

Until we understand that the National Export Strategy Team must be unique, deliberate and vibrant (MORE LIKE A TASK FORCE) we are very unlikely to get any results.

 

Looking at our non-oil sector and the global trend of doing business do you think as a country we have a chance in making a statement in the global front?

 

Again, based on what is on ground right now, my answer is a categorical NO.  International Trade (exports) thrives on COMPETITIVENESS.  There is no way that an average Nigerian exporter can favourably compete as of today in the international market.  Apart from the myriad of challenges back home that culminate in unduly high unit cost of Nigeria’s exports, our reluctance to sign some agreements that bestow Zero or Preferential Tariffs on our products has also negatively impacted our ability to compete globally.  Ask a Nigerian exporter of Cocoa.  The EU remains Nigeria’s biggest importer of Cocoa and other agricultural products.  Since we out-rightly rejected (in whole) the Economic Partnership Agreement proposed by the EU, Nigeria’s Cocoa, (beans and other value-added derivatives) now attract as high as 7% import duty in the huge EU market.

 

Worse still, the Export Expansion Grant, the only one of 18 existing (by law) export incentives in Nigeria, has never really worked smoothly.  I can tell you categorically right now that the last time any Nigerian exporter enjoyed the EEG was in 2014.  Commendably, the NEPC succeeded in getting the backlog of unpaid grants (2007-2016) incorporated into the Federal Government’s domestic debt profile.  The Council has pushed for this to be paid via Promissory Notes, but despie promises that exporters would receive these PNs before the end of 2018, access remains a mirage.

 

Along the line, the NEPC modified the scheme, reducing the grant rate from a possible 30% of repatriated proceeds to 15% (with exporters required to pay a 2% Administrative fee (before collection, mind you).  The grant was to be paid via a newly introduced instrument tagged the Export Credit Certificate.  Again, despite all the motions we have seen, no movement has been acheieved.  We are gradually approaching a third export year now (another set of backlogs) and yet, no one has seen the colour of the Export Credit Certificate.

 

You have been part of some state’s summit on non-oil export. What from your view is stopping states and even individuals from invading the world with their products. The Ogun State adire industry readily comes to mind?

 

Let me start by stating emphatically that it is not only Ogun State that has an exportable product in the adire you referred to.  Every one of Nigeria’s thirty-six States and FCT has at least 2 products that can make waves in the global market.  Niger State is the world’s largest producer of Shea Nuts Butter.  Paradoxically, 95% of this product grows in the wild.  Why is Niger State not the world’s largest exporter of Shea Butter?  Ondo State produces 65% of Nigeria’s Cocoa and Nigeria’s is rated as the world’s sixth largest exporter of Cocoa.  What is the ranking of Ondo State in World Cocoa deliveries?  Delta, Edo, Akwa Ibom and Cross Rivers States between them have the capacity to catch up with Malaysia on Palm Oil.  What is the share of these States in world trade in palm Oil.  Lagos State has the longest/largest natural beach along West Africa.  Cocoanut grows in the wild and even with its Coconut Development Agency, Lagos State is yet to feature officially as a world exporter of Coconut (and derivatives).  I could go on and on. The Nigeria Export Promotion Council, one of its presentations, listed at least twenty products where Nigeria is top-five largest producer in the world.  But in not a single one of these does the country feature even on the top-fifty list of exporters.

 

The answer is simply that where there is no plan, there cannot be results.  And plans will come as a result of the Leadership’s understanding and prioritization of non-oil exports as an economic roadmap.  This is presently lacking in all the States.  Again, let me play the devil’s advocate here on behalf of the NEPC.  Since almost twenty years, the Council had set up State Committees on Export Promotion.  I am not sure how much cooperation these Committees are getting from their respective States.

 

Talking about incentives for exporters what is the current situation?

 

As I had stated in answer to one of your questions earlier, the situation is dim and gloomy. Again let me reiterate that this situation is sad.  Check the world’s largest players in export trade.  The USA, Australia, China, Malaysia, India and Ghana next door, all have very fantastic and functional support instruments, programmes and incentives to push their products into the world markets.  South Africa, the last time I checked, had thirty-four separate Export Promotion Councils, each dedicated to a sector where the country deems herself to have high potential.  Nigeria has only one.  Australia incentivizes exports to the level of refunding a telephone call made by an exporter, or the cost of visit of a potential importer, once these lead to actual export sales.  Australia and USA have a yearly Presidential Exports Awards instituted over fifty years ago.

 

Recently, Nigeria, through the NEPC, decided to activate the never-started Export Development Fund.  I am not sure if the Fund has been endowed and how much the Federal Government is dedicating to this only PRE-SHIPMENT catalyst for export growth.  Permit me to say in pidgin English – OUR ROAD STILL FAR.

Don’t you think giving incentives is an avenue for corruption in the sense that those who get the incentives may not be exporters?

 

Now you are asking a question that gets me really agitated.  Over the past 12 years, the EEG has been touted as open to all manners of abuse and corruption.  I am yet to hear of any exporter that has been prosecuted for blatant fraudulent appropriation under the scheme.  Again let me explain here that the NEPC did a very thorough job of “cleaning the Augean stable” by blocking all potential and suspected avenues of abuse of the scheme.  The EEG itself has undergone more than twelve separate investigations over the past ten years. A former Finance Minister (and Coordinating Minister of the Economy, Ngozi Okonjo-Iweala, was one of those coaxed into believing that the EEG was at best a “dash” to exporters.  She retracted her position (of suspicion) after visiting only a handful of heavy manufacturer-exporters in Kano.  She had to publicly acclaim the importance of the EEG and its significant contribution to Nigeria’s export growth.  You cannot sit in your office and continue to perpetuate the wrong tag of corruption inflicted on the EEG.  Let me also inform you that the EFCC, ICPC, Presidential Committee om Trade Malpractices, the National Assembly, Ersnt & Young, and a few others have all carried out detailed (and one forensic) investigation of the scheme.  The only corruption I am very much aware that existed (I use the past tense because we haven’t seen any such under the current leadership of the NEPC) was the preferential treatment accorded to a few exporters in past years and under previous administrations where the self-tagged BIG FOUR always had their claims processed and paid rapidly while other exporters could wait for upwards of three years before receiving theirs.

 

Again, let me repeat that abuse and corruption, when there was, was effectively curtailed by the NEPC via their eligibility criteria, product classification and factory inspection.  I stand to dare you to name any claimant today who either does not exist or has not exported

Is it incentives exporters need or enabling environment for production to meet global standard?

 

Both.  By enabling environment, I suppose you are referring to the necessary trade infrastructure.  I posit that until our Power situation, roads, rails, congestion at the ports, multiple toll gates between farm-gate (of processing factory) are removed, Government will have to sustain the regime that favours incentives in order to help exporters cushion the losses from these inefficiencies.

 

Looking at the economic indices beyond the non-oil where is Nigeria getting it right? Where are we getting it wrong?

 

As I said at the beginning of this interview, the Federal Government has actually introduced some far-reaching and very waste-curtailing instruments that should lead to a revamping, and ultimate recovery and growth of the nation’s economy.  Backward Integration, the National Automotie Policy, the Agriculture Transformation programmes (including and especially NIRSAL), the rejuvenation of the FIRS, blockage of leakages in selected sectors including Customs revenues, etc., are steps in the right direction.

 

What I would personally like to see (as an advocate of a non-oil export-driven economy for the oast thirty years) is deserved attention being paid to Nigeria’s non-oil export development and growth.

 

What practical advice would you give going forward for us as a country?

 

Like several other advocates and technocrats before me, I would advise that the Nigerian Leadership strive to inculcate a culture of “Nigeria-first” into its work-force.  Once we can elevate national interest above the present “what’s-in-it-for-me” syndrome, our recovery will come so fast, you would think it’s the eighth miracle of the world.  Of course, in line with my personal passion and campaign, I would love to see as soon as possible, a Cabinet-level task Force (I once tagged this NARESQ-NOE – National Resque Squad for Non-Oil Exports constituted and instituted as speedily as possible.

 

About Church Times

ChurchTimes Nigeria is a publication of Church Times Agency . Its vision is to report the church in a professional way with a view to also promote what Christians are doing in politics, business, education, health and other spheres of human endeavours. With various pages including news, features and interviews, tit bits, social diary and light hearted humor, the publication is packaged in a way that offers the reader a refreshing insight into the activities that take place in the Church and carried out by Christians in every sphere of life.

View all posts by Church Times →

Leave a Reply

Your email address will not be published. Required fields are marked *