First Bank of Nigeria Ltd recently held a maiden edition of its non-oil export webinar to promote awareness on the prospects of Non-Oil Export in Nigeria.
The virtual event was themed, ‘Building Sustainable Non-Oil Export in Nigeria; Harnessing Opportunities within AfCFTA Treaty and Agro Commodities’ and saw the presence of stakeholders across related fields throw light on the subject matter.
Speaking during the event, Dr. Adesola Adeduntan, CEO, First Bank of Nigeria Ltd, in his opening remark said the oil boom brought fortunes upon a lot of people while the fall in global oil prices caused the economy to plummet, a pointer to the fact that there is a need to intensify on the diversification of the nation’s revenue base.
With the digitization and automation of the client interface processes as well as the creation of a dedicated export desk in place, the CEO said the bank has been strategic in channelling its commitment to driving the growth of trade transactions.
In addition to providing end-to-end solutions for export products which caters to pre and post export financing products and export services, Adeduntan said the bank will continue to demonstrate support for the sustainable revenue drive in growing the economy by creating nimble product and service offerings for export trade services cutting across agriculture, structured trade and commodity financing and treasury.
Biodun Adedipe, Founder and consultant, B. Adedipe Associate limited while drawing from the report of IMF which expect Nigeria to grow significantly in 2021 and 2022 noted that whenever output is growing, it would most likely improve international trade and vice versa.
He said, “We saw in 2020, when supply chain stood as it was strongly challenged, the international trade also collapsed. But the key thing for us in Nigeria is our economic growth, we have the evidence that it is growing just like every other economy around the world.”
He added that one of the outcomes of a deliberate policy and action on non-oil export is the fact that it allows for growth in reserves which talked about depth of the nation’s pocket and the number of import bill months that can pay.
“The larger that volume is, the more comfortable we are and the more the stable the exchange value of our currency. In general, from my own research over the years, having interrogated this space for close to forty years, export-led economies generally enjoy relative stability and sustainable growth. This means to be export-led goes beyond natural endowment, otherwise, it is more about clarity of what to produce from the rest of the world,” he said.
Importantly, Adeduntan charged that it is crucial to set targets and implement rigorous measures. He said, “If we fail to act now, our contemporaries in other countries will act on us and the AFCFTA will find other countries expropriating that.”
Representing the Managing Director and Chief Executive of the Nigerian Export Promotion Council (NEPC), Folorunsho Akintunde, Deputy Director, NEPC spoke on the role of the promotion in building sustainable non-oil export whilst also highlighting its mission is in line with the expansion of non-oil exports for sustainable and inclusive growth.
He also added that following the crash in international crude oil prices, the Zero Oil Plan was developed leveraging on the AFCFTA in response to the recession in 2016 in preparation for a world in which crude oil is less relevant.
He noted, “The Zero Oil Plan is a strategy for boosting foreign exchange through the non-oil sector by rolling out export policies for 22 major products that could generate up to $30 billion in foreign exchange a year and also the commencing export projects and investment tracking in each state of the federation as part of the One State One Product (OSOP) scheme.”
Other non-oil initiative to facilitate AFCFTA, according to Akintunde includes; preparing and positioning SMEs For AfCFTA, export competency development programmes, NEPC/GIZ Nigeria Competitiveness Project (NICOP) amongst others.
On Nigeria Customs Service…
Yusuf Malanta, the Area Controller of Apapa Command of Nigeria Customs Service while speaking on sensitization of export procedures and AFCFA said that Nigerian custom service plays vital roles and responsibilities in the entire export transactions with regards to records, processes documentation and statistical record of all export shipments.
He explained that exports under the federal ministry of finance export guidelines for export procedures could be categorized as commercial export; consisting of oil including its derivatives and non-oil or dried cargo exported from Nigeria to other countries in bulk for commercial purposes, or Non-Commercial Exports; in the form of goods or any articles exported to other countries for purposes other than trade.
Whilst explaining that a number of documents are required by an exporter such as the SDG form, Nigeria export promotion council certificate, Nigeria export proceeds form, amongst others, he also highlighted some of the export prohibitions to include maize, unprocessed rubber latex and lump, timber, scrap metal, artefact and others.
According to Malanta, the reason for prohibition could be to encourage local industry, provide employment, prevent shortage of goods in the domestic market because it is more profitable to export or to restrict items that may be used in proliferation, terrorism or nuclear, chemical, or biological warfare.
While pointing out that experts see potential to lift Nigerians out of poverty and raise manufacturing output through the AfCFTA, he however said to realize the potential, Nigeria must follow targeted industrial policy and structural reforms; upgrade Customs infrastructure; address the domestic cost of doing business; reduce bottlenecks, port processes, and transportation costs; promote digital marketing and e-commerce; and create targeted awareness about the AfCFTA policy.
Eric Monchu, the Regional Chief Operating Officer and Head of Mission for Anglophone West Africa, AFREXIMBANK, noted that the bank was set up 28 years ago with a mandate to promote, facilitate and finance intra and extra African trade.
He stated that the bank work on a five years strategic plan as the current plan is called ‘the AFREXIMBANK strategic plan (2017-2019): impact 2021 – Africa transformation’ which is divided into 4 pillars namely: intra Africa trade, industrialization and export development, trade finance leadership, financial soundness and performance.
In addition, he said the bank plans to make available 40 billion US dollars in intra-African trade and investment financing during the next five years, twice the amount it disbursed, for the same purpose, in the last four years amongst other facilitation initiatives by the bank.
He also highlighted the key financing instrument as the global facility, intra-African investment finance, intra-African investment guarantee, guarantee in support of government commitments to project promoters, fleet financing, trade information and advisory services etc.
On export credit insurance…
Stella Okotete, Executive Director, Business Development of the Nigerian Export-Import Bank (NEXIM) while responding to question on the focus of export credit insurance disclosed that an MoU has been signed with new underwriters to expand the role and activities on the export credit insurance beyond political risk to commercial risk as she noted that the export credit insurance is to protect exporters of their credits and products against the risk of non-payment.
She added, “We have the small and medium export facility which is designed to support for small businesses in the export value chain. Government in its wisdom is determined to diversify our export basket so we understand that the bulk of businesses in the country today are small scale entrepreneurs and access to finance is also a big constrain, so we develop the small and medium enterprise facility, smith.
“Also, the WAYEF, women and youth export facility is important because women play in the entire value chain and the export market is being led by elderly exporters so there is this age gap and we thought it is wise for the country to actually play actively our youthful population, it is also important that we create a fund to support young exporters in the export value chain.”
According to data from the Nigerian Export Promotion Council, NEPC, Nigeria’s non-oil exports increased by 14 per cent from N1.74 billion in 2019 to N2.074 billion in 2020. But experts say the country has the capacity to generate more foreign exchange earnings through non-oil exports given that crude oil generates about 90 per cent of Nigeria’s foreign exchange earnings.
In lieu of this, events like the non-export oil webinar organised by the Firstank will expectedly boost interest in stakeholders to look into the space to improve Nigeria’s overall GDP.