‘How improved regulations can aid non-oil export growth’
Identifying non-oil export as a leading priority for sustainable economic development, the Lagos Chamber of Commerce and Industry (LCCI) has urged managers of the Nigerian economy to streamline the fragmented regulatory environment and enforcement framework inhibiting the growth of the non-oil export sector.
The president, LCCI, Babatunde Ruwase, explained that there are still incidences of multiple regulations and guidelines set by various ministries, departments and agencies resulting in too many approvals and signatories before export-related transactions are consummated.
The LCCI boss at the chamber’s 2019 export group’s symposium tagged “Synergy between Regulations and Trade in Nigeria: Driving Exports”, said in the process of getting approvals and required signatories, exporters sometimes suffer huge financial losses arising from mortalities of perishable produce/products.
“This, in effect, creates an environment of distrust and makes it difficult to grow the sector. Our position at the LCCI is that regulations must be simplified, effective, modernised and responsive, thereby making compliance less cumbersome and burdensome on the operators,” he added.
He maintained that it was imperative to create an effective collaboration between the Government and the Private Sector to address and resolve challenges hindering export expansion.
“There must be regular engagement of all stakeholders to develop the right ecosystem for an export-led economy. This symposium, therefore, aims at creating the needed platform for supporting the creation of the right ecosystem that is much desired,” he stressed.
He said the theme of the symposium is very strategic and timely due to the fact that export, particularly non-oil export, is the backbone of sustainable economic growth and development.
He added that the forum was also timely to fortify the diversification agenda of the current administration as enc
encapsulated in the Economic Recovery and Group Plan (ERGP).
“With the appointment of new ministers and the formation of the federal cabinet, this symposium provides another opportunity to set agenda for the new ministers to deliver promptly of the promises of the government,” he said.
According to him, over the years, oil has dominated Nigeria’s export trade and recent statistics from the National Bureau of Statistics (NBS) showed that Crude oil contribution to total export was 82 per cent in Q1 2019, stating that in contrast, the percentage of non-oil export was 4 percent, 5 per cent, 6 per cent and 13 per cent in 2016, 2017, 2018 and Q1 2019, respectively.
However, the non-oil export recorded a growth of 83 per cent in 2017 and 89 per cent in 2018. This trend indicates that the government’s effort on export diversification appears to be yielding positive results in recent times, though the performance of the sector is still largely below potentials.
The Chairman Export Group, LCCI, Ademola Agboola, said businesses in Nigeria are having challenging times even as the government is working hard to get the economy back into good times.
He added that exports from Nigeria dropped 0.2 per cent year on year to N1.452 trillion in March 2019, amid declines in sales of raw material (-20.5 per cent); solid mineral (-43.1 per cent) and energy goods (-4.8 per cent).
In contrast, exports grew for agricultural goods (74.5 per cent); crude oil (0.7 per cent) and manufactured goods (353.6 per cent). These significant increases do not really translate to better times for wider demography of the private sector. Our revenue is still much dependent on oil. We have the capacity to do much better,” he said.
He said most rejects are caused by delays, wrong documentation, multiple approval of different agencies with perceived overlapping responsibilities, calling on the need to close gaps in export processes and procedures in order to be more efficient and save cost.
In his remarks, the Chairman and Chief Executive Officer, Olu Olu Foods, Olumuyiwa Aiyegbusi, said the institutional framework is still weak, which he said was responsible for the rejection of some of the nation’s goods at the global markets.
“Only strong institutions would make our goods competitive at the international stage and until we address this, our goods will continue facing the high level of reject in Europe and other parts of the world,” he said.
He called for an increased working relationship between exporters, local traders, and the regulatory agencies.