Monday, 2nd October 2023

‘Nigeria lacking structures required to implement AfCFTA’

By Tobi Awodipe
15 June 2022   |   1:42 am
The wide trade deficit in Nigeria has a huge consequence especially for the foreign exchange (FX) market and employment creation. The country, with enormous unemployment and FX challenges...

Blessing Irabor is the current president, Organisation of Women in International Trade (OWIT) Nigeria and Chair for the OWIT Africa Liaison 2022. She is also thePresident/CEO, Blissomo International Ltd, providing services in agriculture, tourism, business development and consulting. In this interview with TOBI AWODIPE, she talks about challenges hindering Nigeria’s export and how the country can improve its non-oil export and international trade.

Nigeria’s trade deficit is widening, going by the latest data from the National Bureau of Statistics (NBS), raising concerns about the country’s capacity to improve its export. What do you suggest as the sustainable plan or action to reverse the deficit?
The wide trade deficit in Nigeria has a huge consequence especially for the foreign exchange (FX) market and employment creation. The country, with enormous unemployment and FX challenges, is by implication ‘outsourcing’ critical segments of the economy that create jobs (secondary production) to other economies. In simple terms, Nigeria has continued to export jobs owing to its inability to domesticate heavy factor industries. To address this, Nigeria has to take into priority the measures to address infrastructural challenges, regulatory constraints, security concerns, restricted access to foreign exchange and other related problems that have discouraged exportation of goods from Nigeria.

What would you say are the major challenges hindering Nigeria’s export today?
So many but I’ll say insecurity as a threat to the economy; production of goods below approved international standards; substandard packaging of goods; inadequate infrastructure – transportation and logistics; warehouses and storage facilities which increase loss and damage; overcrowded ports; ill-conceived government policies that stifle businesses and reduce investor confidence. Others are poor/zero access to finance; a lack of understanding of foreign markets and regulations and complexities associated with foreign exchange.

Despite several promises and assurances of improving the ease of doing business for SMEs, would you say people in business/trade have benefitted from this in any way?
Some businesses have benefited but there is still a long way to go. The Nigerian business environment is toxic and hampers growth. Radical policies are made without due consideration and consultation. Access to finance is still a challenge for businesses. The cumbersome processes at agencies such as NAFDAC, SON and even the multiplicity of agencies have not helped either. Women are still struggling to enter certain markets. The assurances on improving the ease of doing business must be met with a harmonious implementation of policies across the federal and state levels of government.

Globally, inflation remains a challenge for many countries. For Nigeria, how much would you say this is affecting the local and international trade potentials?
The effect of inflation on international trade may be described quite simply. When prices and costs in any country rise rapidly, goods produced in the country soon become more expensive than similar goods produced abroad. Nigeria is no exception as the depreciating value of our currency has reduced the purchasing power of both local and international traders. This has further led to scarcity of resources to produce goods and an increase in the price of existing goods in store.

AfCFTA was greeted with so much fanfare when it was signed two years ago. Nigeria is yet to implement the agreement despite signing it. What are the implications for people in regional/international trade?
Though Nigeria has signed and ratified the AfCFTA agreement, the structures required for the implementation of the agreement are still lacking. This apparent deficit in infrastructure seeks to undermine this agreement. Nigeria’s security challenge has posed a major threat to this agreement, especially in the light of constant farmers-herders clashes and terrorist activities of Boko Haram. Nigeria’s population of about 200 million people provides a huge market in the wake of regional and continental trade. However, this population may become primarily consumers with a minimal export capacity if the infrastructure deficit is not addressed to increase production and export of goods. Our laws and practice in Nigeria are also not abreast with the dimensions of trade in services and the required infrastructure to make us competitive in services.

Oil and petroleum products still remain Nigeria’s biggest export despite promises from several governments to diversify and improve non-oil exports, how best can we improve the latter going forward?
According to The Guardian (of March 2022), between 2018-2021, crude and oil products accounted for an average of 89.4 per cent of the total goods exported, leaving industries and agriculture where the bulk of the jobs are created with about 10 percent. Despite the renewed campaign for non-oil exports, oil still controlled 88.7 per cent of the export basket last year. This shows that a lot more still needs to be done in diversifying Nigeria’s resources and promoting non-oil exports. Coupled with the suggestions I’ll state later on, the following interventions are equally critical: Concerted efforts by government at all levels and the various regulatory institutions to minimise all bottlenecks and bureaucracy associated with exportation of finished goods by Nigerian firms especially SMEs; Access to foreign currency would enable exporters manage challenges associated with currency fluctuations; Critically examining production challenges in priority sectors such as agriculture and addressing them more specifically and finally, taking on the situation caused by the global pandemic on Nigerian export businesses taking advantage of e-commerce would give Nigeria’s non-oil exporters the leeway to access international markets effectively.

As women in international trade, what unique challenges would you say you face?
Access to affordable learning opportunities to garner technical competence in international trade from reputable institutions; access to entry-level, mid-level and C-Suite roles for practitioners of international trade; production and export capacity; market access; lack of formalisation of businesses; legal and institutional constraints as well as structural inequalities in patriarchal societies.

Nigeria would be hosting the international body of this association soon. What major issues would this conference look to address?
The 2022 Africa Women Trade Conference, which will be hosted in Nigeria, proposes to move beyond basic discussions around gender and trade to actual analysis of who participates and benefits from regional and international trade, and the process/extent of participation. In this regard, the conference will draw recommendations from the following questions: What are the current considerations for a gender-responsive trade facilitation agenda? How can gender-specific challenges be addressed within the AfCFTA complementary measures?

What is the gender dimension to investment, standardizations, certifications, competition policies and intellectual property rights? Do all exporters/importers and aspiring exporters/importers have equal opportunities? Are solutions available to address challenges they face within the context of trade in services/trade in goods? Is the export/import participation rate the same for both male and female gender? In what sectors are the genders prominent? What are the most efficient methods to support women on issues such as discrimination, capacity building and networking and how is gender-mainstreaming strategies enabled by government entities responsible for implementing trade facilitation measures?

The conference’s methodologies will include but not limited to: High-level meetings, 2-day discussion platforms that will involve short issues papers or powerpoint presentations prepared and presented as background for panel discussion as well as story-telling about successful women entrepreneurs. The meeting days will employ hybrid methodologies in order to expand the scope of participants. It would also have a 1-day trade show that provides a platform for sharing trade, investment and market information and enabling buyers and sellers, investors and countries to meet, discuss and conclude business deals and an award of excellence night for exemplary service by selected trade and business actors which will be aimed at recognizing special and outstanding services provided for national/regional and/or international significance.

What can the Nigerian government do to improve international trade to boost the nation’s GDP?
Nigeria has been a member of the WTO since January 1, 1995; having been a member of the General Agreement on Tariffs and Trade (GATT) since November 18, 1960.

Nigeria ratified the WTO Trade Facilitation Agreement on January 20, 2017 and the amended WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS) Agreement on January 16, 2017. Since then, Nigeria has entered into several other international, bilateral and regional agreements including the AfCFTA. However, in order to position the country to benefit maximally, the following must be considered and implemented: ease in the regulatory processes relating to exporting goods; promotion of social and economic policies that will be instrumental to promoting women and youth in trade, more specifically, improving their entrepreneurial capacity and employment opportunities; infrastructural development of road and rail networks as well as export facilities to enable transportation of quality products from and to Nigeria as well as optimization of border administration processes via technology. Other steps are improving security and general business environment; rationalization of import duties and restrictions to avoid the possibility of arbitrary product reclassification and to align with global cost-per-shipment levels; promoting transparency and accountability by avoiding duplicate procedures that often take time and lead to delay and publishing all timelines and clear cut processes for imports and exports on its website; coordinate and streamline procedures inside regulating bodies to expedite licensing requirements, inspections and tax exemptions; support subnational governments on its local agenda to promote trade development within its environment and the last but not the least, establish regulation to support more efficient and less-expensive logistics services like rail services and facilitating new investment in our ports.

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