Embracing new strategies to promote non-oil export amid pandemic
To many industry observers, the COVID-19 pandemic will alter the way the world lives and how businesses are run. With oil revenues at the lowest, the Federal Government continues to explore non-oil revenue as buffer. While Nigeria’s non-oil export has continued to suffer as a result of parlous state of infrastructure and access to ports, the Nigerian Export Promotion Council (NEPC), hopes to continue to leverage the pandemic to explore air cargo for perishable goods. Stakeholders share experience about the move. FEMI ADEKOYA writes.
Globally, the restrictions on the movement of people and border closures foreshadow a disruption in supply chains and a decline in exports. Already, countries around the world have closed their borders to non-essential traffic, and global supply chains for exports have been disrupted.
With limited markets available for non-essential goods and services as a result of lockdown in many countries, there are concerns for non-oil exports, especially for perishable goods.
In its impact assessment and policy responses to the coronavirus pandemic on agricultural exports, the Nigerian Export Promotion Council (NEPC), noted that agricultural exports, especially cocoa, are predicted to suffer.
Specifically, the NEPC envisages a fall in exports of over $100 million in the cocoa sector in Nigeria, as a result of declining prices due to falling demand in Europe.
It therefore asked that the recommendations made by the Nigerian Governors’ Forum on special clearance for producers, suppliers and distributors of essential goods and services at the nation’s ports, be extended to exporters of goods who had secured orders before the pandemic and are seeking to execute them.
As the world grapples with shortages in food and medical supplies, the World Trade Organisation (WTO), and other development agencies have urged countries to remove red tapes that hinder the movement of essential goods and services.
The NEPC reiterated this concern, noting that while many countries are prohibiting exports of certain food products, Nigeria’s agricultural export sector can ill afford to do this, as the top three Nigerian agricultural exports in 2018, cocoa, sesame seed, and cashew are produced to cater for foreign demand.
To ensure that demands are met, the Chief Executive Officer of the NEPC, Segun Awolowo, noted that the Council has succeeded in sustaining exports with the commissioning of a British Airways Cargo through a freight and forwarding company, Free On Board Global Logistics Limited, for exports to the United Kingdom, European Union countries and the United States.
According to him, the initiative, in collaboration with the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and Export Action Group (NEXAG) , is already serving as a relief to exporters pondering how to convey their products to these destinations.
One of the logistics firm implementing the agenda, the Chief Executive Officer of FOB Logistics, Jimmy Adebakin, confirmed that the company has moved cumulatively in excess of 60 tonnes of Nigerian non-perishable foods; yam, noodles, garri, fish and vegetables to London.
“And upon arrival in London, we are providing trans-shipment services across Europe to North America as well, and the interest is growing every day.
“Every flight, we are exceeding the performance of previous flight and we have another flight scheduled for this week and we are hoping that with the right support and publicity, Nigerians will understand that we can no longer continue to depend on oil, even as people continue to take the initiative to get involved in this Nigerian non-oil export drive.
“We have been supported highly by the Nigerian Export Promotion Council (NEPC), and the Nigeria Export forum (NEF).“They’ve supported us and we are very grateful for that. We see a change in the curve. We see a change in the attitude and we believe that we need to let Nigerians know that Covid-19 pandemic is here to stay for a long time and the only way we can support ourselves and the federal government is for us to look inwards as individuals, corporate entities and as a government to create the enabling environments, not by lip service anymore.
“COVID-19 has demonstrated to us that the Nigerian government cannot do everything. It is impossible. This effort has to be private sector driven. And this is why we have made it a point of duty”, he added.
An exporter, who has been part of the deal, Bamidele Ayemibo, commended the initiative, saying that this has been able to help exporters to do shipment during the period as the economy continues to experience a slowdown.
“I think it is a good initiative. So instead of not being able to do shipping at all, we have been able to reduce losses from inactivity”, he added.
On the challenges of access to global markets, Adebakin on his part stated that: “This is a wake-up call, and we need to give publicity that we are the new kid on the block, and we are totally committed with our global network and our cargo services align with offices in over 3,700 cities of the world, in over 180 countries. They are all supporting our drive to provide not only customs clearance on arrival of the shipment at the destination; they are providing warehousing facilities, distribution facility, and they have agreed to support Nigerian exporters to remit back their money.
“That is another problem that Nigerian exporters are facing, they do not have representation at the country of designation where they have sent their goods to. They find themselves in a situation where they have invested all their money and somebody out there is selling their own”.
Awolowo had reiterated the need for non-oil exporters to acquire additional non-mandatory certifications to enable them to compete effectively in the global markets.
According to him, non-mandatory certifications like the ISO, HACCP, and GMP are global certification, trusted by consumers and end-users of products and services, and are attained, based on the reputation of the certifying bodies.
He said: “The impact assessment by NEPC has shown that the agricultural export sector is at major risk following the covid-19 pandemic. Nigeria’s biggest non-oil foreign exchange earner, cocoa, is particularly vulnerable with a dramatic fall in prices.
“With the bulk of Nigerian cocoa going to Europe, prices could fall further as demand plummets, meaning the anticipated loss of $110.8 million could in fact, worryingly, become larger in magnitude. Sesame exports are likely to prove more resilient due to diversified export markets and more stable prices, whilst cashew exports are vulnerable to falling demand in Vietnam”.
“The Federal Government should as a matter of urgency commence full implementation of the Zero Oil plan as a precondition for sustainable economic growth and diversification of the economy. NEPC will continue its efforts in addressing the logistical challenges facing exporters currently, as well as promoting a diversification of Nigeria’s agricultural export base. We are putting all our manpower into implementing policies that will ease the burden on exporters”, he added.
The COVID-19 pandemic is a wake-up call to policymakers as the unusual and unprecedented nature of the crisis has made it impossible for Nigeria to continue to do business as usual.
Indeed, a more integrated response spanning several sectors—including health, finance, and trade—is required to address structural issues that make the country less resilient to shocks, and limit its range of policy responses. In the long term, tougher decisions need to be made, including but not limited to diversifying the country’s revenue base away from oil exports, and improving investments in the healthcare sector by ensuring that the economy is able to recover quickly from difficult conditions in the future.