Forum blames high cost of shipping on low export volume
STAKEHOLDERS in the maritime sector have blamed high cost of shipping in African countries on low export volume within the continent.
Speaking at a forum in Lagos, they explained that the development is detrimental to intra-regional trade and economic development.
They explained that the design and location of ports in African countries do not make room for export trade, “whereas in Western states ports are designed purposely for exports”.
According to the stakeholders who spoke at the maiden edition of International Seatrade and Investment Convention, there are no direct trade routes amongst African countries, pointing out that 90 per cent of income in African countries goes into the funding of imports.
In a communiqué issued at the end of the forum held in Lagos, the stakeholders lamented that export tariff within the continent are ambiguous and complex, “therefore are not easily understood by exporters”.
Explaining further, the communiqué blamed policy inconsistency and overt dependence on road transportation as major obstacles to export trade in Africa.
It explained that undocumented export trade is the reason for inaccuracy in export data, adding that it adversely affects funding by commercial banks.
The participants explained that lack of concessioning of port railway system also affects adversely export trade.
Pointing the way forward, the communiqué explained that to drive export trade in African effectively, nations should have goods to export, means of transport, Ports for ships/cargo interface, adequate transport logistics services and infrastructure.
Other terms identified by the forum include:
*Terms of trade governing the contractual agreement between the seller and the buyer must be spelt out.
It advocated financial system that supports export trade “to allow easy transfer of funds and robust insurance/export guarantee scheme”.
According to the communiqué, other factors include:
*International standards for the goods to be accepted at International markets;
*Efficient regulatory standards to monitor and compel compliance;
*Sensitize and establish proper economic policies to encourage local manufacturers;
*Integrated planning including the provision of rail systems should be part of the criteria for the approval of new ports to avoid the mistakes of the past;
*Littoral countries should not neglect trade opportunities offered by their neighbouring landlocked countries;
*Nigeria should have trade representatives in various countries to drive the process of trade with her trade partners, as this will go a long way to improve standards;
*Export tariffs should be simplified for easy understanding;
*In subscribing to International conventions, African countries should ensure that indigenous exporters are protected;
*Government should provide an effective regulatory climate that ensures quality control as the cornerstone of the production of indigenous goods and services; *Government should engage the private sector during and not after the formulation of policies to ensure sustenance;
*Adopt an integrated planning approach for policy formulation and implementation;
*Ports should be designed and built to handle export trade;
*African countries should build trust with one another to enhance business relationship;
*African countries should reduce export of raw materials. Rather they should add value to their products to generate more foreign exchange and create jobs for the teeming population;
*In order to strengthen the value of the naira, Nigeria must produce and export because there is an extent to which naira value can be defended;
*Adequate infrastructure should be provided to promote trade facilitation;
*The basic thrust of economic policies should be to promote strategies and a roadmap that would promote exports;
*Invest in Agriculture and Manufacturing;
*Provide the infrastructure that will ensure maximum yield, efficient and adequate storage systems for agricultural products;
*Invest in processing of produce in secondary and tertiary state to optimize value and earnings;
*The establishment of trade routes within Africa should be given urgent attention;
*The integrity of pipeline systems should be restored and rail corridors leading to and fro the ports should be concessioned;
*Reservation of road corridors on port access areas is necessary for future port expansion;
*Adequate revolving loan policy for the upgrade and renewal of trucks should be put in place as a matter of urgency;
*Private sector should drive and fund advocacy programmes;
*There should consistency in policy formulation and implementation so as to assist organizations and individuals undertake long term planning;
*The use of Information Communication technology to achieve the automation of management processes should be prioritized;
*Exporters should take advantage of the opportunity offered by Free Trade Zones (FTZ) to reduce their cost of production and
*Funding by banks should be product and sector specific at very low interest. Government needs to work with banks to earmark the areas of trade requiring such funding.
Declaring the forum open, former Head of State, General Abdulsalami Abubakar challenged African countries to put in place adequate transport and logistics infrastructure as part of measure to boost export.
Abdulsalami said Africans should move from the mindset of thinking only about Europe, Asia, the America whenever export trade is discussed.
He said Africa is experiencing “exponential growth in economy and in population”, adding that the development translates to market.
According to Abubakar, to facilitate export trade on a continental basis, there is need to adopt and implement policy of intra Africa and inter-regional trade amongst Africa countries.
He said every Africa country should tailor its domestic policies towards global goal, pointing out that Transport linkages between Africa countries require deliberate effort.
Abdulsalami said: “For instance, as countries invest in and improve their transport infrastructure, we should deliberately invest only in infrastructure that is interoperable with that of the neighbouring country.
“For example, type of rail gauges should be uniform to facilitate trade with neighbouring states. Countries should implement regulations that reduces bureaucracy and obstacles to trade between Africa countries”, said Abdulsalami.