Odds against harvesting $250b worth of agro-export produce
Air freighters offloading consignments at the cargo section of Murtala Muhammed International Airport (MMIA), Lagos..
The fortunes of air cargo export in Nigeria have dipped to an all-time low. On the one hand, the misfortune is the difficulty in funnelling agro-produce to nearby airports for airlift to the global market.
On the other hand, is the perennial bureaucratic bottlenecks that frustrate exporters at the entry ports, contrary to the Federal Government’s ease of doing business. WOLE OYEBADE reports that both hurdles combine to rob the country of valuable export potential and attendant scarce foreign exchange earnings.
The Federal Government through the Presidential Enabling Businesses Environment Council (PEBEC), in 2016, rolled out the Ease of Doing Business initiative to facilitate trade, especially at air/sea ports and other business hotbeds.
At the airports, the initiative was mainly to incentivise a similar government initiative – promoting agro-export as an alternative mainstay of the economy that has, over the years, been largely powered by oil and petrodollars.
More so, it is no longer news that Nigeria has an abundant residue of natural resources that are begging for value addition for them to become wealthy. One such is agricultural produce harvested from states across the federation, estimated to be worth about $250b in revenue yearly.
About six years down the ease of doing business lane, not only has the objective largely failed at the export processing centres and airports corridors, the business environment is worse than it was about seven years ago, especially with the stifling of export-to-import trade, even as most goods that find their way abroad are either prohibited or rejected for allegedly falling short of global standards.
[FILES] Air freighters offloading consignments at the cargo section of Murtala Muhammed International Airport (MMIA), Lagos.<br />
While regulators blame exporters for the failure of due diligence and adherence to standard guidelines that are acceptable overseas, exporters are pointing fingers at regulatory bottlenecks, the proliferation of local agencies and conflicting guidelines, high cost of freight, extortion, and multiple charges even on goods that are not prohibited.
However, instead of furthering a fruitless tirade, experts are canvassing for a holistic review of the export strengths cum weaknesses to have a common workable guideline that streamlines multiple agencies and supports exporters for a win-win business outlook.
Enough Wealth To Go Round
NIGERIA, experts say, is blessed with year-round arable food crops that are now equivalent to crude oil in the global market. Already, no fewer than 22 non-oil products have been pencilled in the new export promotion programme of the Federal Government.
The initiative is part of the zero-oil plan being implemented by the Nigerian Export Promotion Council (NEPC), in collaboration with the private sector and is estimated to be worth over $150b in annual export value at full capacity.
Among the products are palm oil, cashew, cocoa, soya beans, rubber, rice, ginger, cotton, Shea butter, tomato, banana, plantain, cassava, cowpeas, and spices as well as petrochemical and leather.
Earlier, the former Executive Director of NEPC, Olusegun Awolowo, reckoned that there was a huge potential for the country’s agro products worldwide, and vast revenue to be made from the export value.
Cashew, which is dense across the rainforest, has an export value of $4.5b a year, and its export quantity has lately been scaled up from 110, 000 metric tonnes, to 300, 000 metric tonnes, with more than half going to Vietnam.
Cocoa too is worth $80b in the global market a year, even though Ghana already does one million and Cote D’Ivoire three million metric tonnes, Nigeria is miles behind with less than 300, 000 metric tonnes a year.
Awolowo added that petrochemical is also worth $150b yearly, but Nigeria is unable to benefit from the largesse because the country is not refining locally.
He said the informal export sector in West Africa from Nigeria could generate $41b yearly, and that with the coming of the African Continental Free Trade Agreement (AfCFTA) market, those products being exported from Nigeria informally to all parts of Africa would be formalised, and a larger market put in place.
Paradox Of Plenty
The Guardian findings showed that besides emails that top the cargo net export in 2021, the country has slumped in the export of agricultural products following a spate of rejections and prohibitions overseas over poor packaging, documentation, and alleged non-compliance with set standards.
Compared to the import-to-export ratio that was given as 66:34 in 2017, last year’s ratio stands at 87:13, though the movement of goods through the airports had increased by 56 per cent compared to 2020.
Indeed, the International Air Transport Association (IATA) lately estimated a massive post-pandemic recovery surge in air cargo globally. African airlines lately saw an 11.6 per cent volume increase compared to that of 2021, given the upward growth in export.
In Nigeria, the export of international air cargo has been on a steady decline since 2017. Five years ago, the country had an import-to-export ratio of 66:34. It dropped to 84:16 in 2018; 86:14 in 2019’89:11 in 2020, and 87-to-13 in 2021.
Though demand volume spiked by 52 per cent in 2021, a total of 217.8 million kg of cargo were freighted through the air.
About 188.74 million kg were imported and only 29 million kg worth of goods were exported.
The imbalance leaves the country’s Murtala Muhammed International Airport (MMIA) as the fifth busiest cargo airport on the continent, with Jomo Kenyatta International Airport Kenya leading. Cairo International Airport in Egypt, is second by export volume, followed by Oliver Reginald Tambo International Airport, South Africa, and Addis Ababa’s Bole International Airport, Ethiopia.
The Chief Executive Officer (CEO) of Chisco Logistics, Obinna Anyaegbu, is of the view that firms that offer logistic services and airlines need more produce/products to keep them busy as there is a low supply for freight services.
Anyaegbu said: “There is a lack of supply and marketing of our products and products globally. Trust me, the Chinese want to eat pineapples, bananas, plantains, and so on. We have some of the tastiest and most nutritious fruits in the world. But demands and supplies are not met right now.
“There are cargo planes and bellies of passenger planes flying empty, yet fruits are rotting away on farms. Those are serious gaps. About two years ago during the COVID-19 lockdown when our vehicle service was down, we leased aircraft to lift cargo on the Lagos-Accra-Lagos route. It was a 14-tonner 737 aircraft, but we were struggling to get two tons a week. So, the export is simply not there.
“We observed that the biggest player on the route was DHL and they are bringing into Nigeria, about 70 to 80 tons of cargo and moving it across West Africa. So, it is mostly imported goods that are moving via the African routes. Kenya is taking out a lot (export) and they have a great supply contract. This is because they meet international standards,” Anyaegbu said.
Institutionalised Bottlenecks, Inefficiencies, Rejections
A year ago, The Guardian reported complicated roadblocks mounted by government agencies where extortion and harassment were rampant, the same way that multiple charges on export goods held sway, causing international cargo airlines to prefer flying out of Nigeria empty. Unfortunately, nothing has changed to date.
Shockingly, among the 16 sundry charges charged for goods coming into or departing the country via airports, only five are officially recognised.
Besides the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), Port Health Services, Nigerian Agricultural Quarantine Service (NAQS), and the Nigerian Customs Service (NCS), the following agencies also collect unofficial charges en bloc: Anti Bomb Squad of the Nigeria Police Force, National Agency for Food, Drug Administration and Control (NAFDAC), Standards Organisation of Nigeria (SON), and the National Drug Law Enforcement Agency (NDLEA).
A recent visit to the cargo section of the MMIA, Lagos, confirmed the surge in the number of airplanes that import cargo into the country. However, three out of every four now depart without exportable goods.
A source who did not want to be named said this is not completely due to the lack of exportable goods from the cargo sheds, adding that goods are coming in bits, but they are too small for what the airliners require.
“The issue is that you cannot be offering a 100 to 200 tonner aircraft just five to 10 tons and expect the operator to pay $35, 000 charges on five tons of cargo. That is a loss. Instead of paying much for so little, it pays them to fly with bags of sand instead and for free,” he said.
Exporters, however, said that there is sufficient cargo potential for global market off-takers but for prohibitions. Also, there are unresolved and bureaucratic bottlenecks frustrating exporters at the airports.
For instance, the country’s dried white and brown beans have been prohibited in European Union member-states in the last five years. This is not unconnected with the possession of pests and chemical pesticides that are allegedly injurious to the health of consumers.
Also banned in the EU, The Guardian learnt, are sesame seeds, melon seeds, smoked fish and meat, peanut chips, and palm oil.
The American government in March 2018 banned the export of smoked catfish and other fish products from Nigeria over a lack of adequate documentation to support the exports, as and when due.
According to the Catfish Farmers’ Association of Nigeria (CAFAN), the market is worth over N20b yearly.
Nigerian yam, hibiscus flowers (for zobo drink), mushrooms, bitter leaf, fluted pumpkin leaf, waterleaf, garden eggs, shelled groundnut, and crayfish among others are some items listed by exporters as being on the rejection list.
While the Shippers Association of Lagos (SAL) estimated that the seized, or prohibited items make up 82 per cent of the country’s exportable agro-allied produce, the World Bank projects that Nigeria and other developing countries are expected to lose between $12b and $15b by 2025 to rejected exports, the World Bank has said.
President of SAL, Jonathan Nicole, noted that a lot of goods were allegedly being exported illegally, and rejected for not having requisite government clearance.
Meanwhile, some of the so-called prohibited produce are warmly received when routed through neighbouring African countries like Ghana, where they are well-packaged, face fewer hassles, and are comparatively cheaper to export.
For Chief Executive Officer of ABX World, Captain John Okakpu, despite AfCFTA’s kick-off, Nigeria is still not primed to benefit from the continent’s export potential.
“Our hibiscus (zobo) export crippled some time ago when Mexico banned it. That is because almost 100 per cent of the export goes through Mexico to the world market. Also, our ginger from Kachia, in Kaduna State goes through India and Pakistan to the world market. The biggest nightmare is our yam. Nigeria tops the charts with about 67 per cent of global yam production, dwarfing Ghana’s 10 per cent. Yet, Ghana contributed 94 per cent of the total number of yams exported from West Africa, and 22 per cent of global exports in 2019. This is a big shame. All we do here in Nigeria is outsmart each other to take what belongs to someone else.”
The Chairman, the Export Group of Lagos Chamber of Commerce and Industry (LCCI), Bosun Solarin, said that bureaucracy and cumbersome regulations have made it almost impossible for exporters to thrive, adding that Nigeria should blame itself for her produce/products that suffer rejection abroad.
“Should we continue to allow badly processed and packaged items/goods through those cargo sheds? No wonder, our products receive negative comments outside the country. I was worried the only time that I went to NAHCO and saw what our people freight out of this country. And I asked, why do we allow such?”Solarin queried.
She advised the government and its multiple agencies to deemphasise revenue generation, describing the current levies as stifling.
She pointed out that NAFDAC charges businesses about N40, 000 for each product, with a cap of only five products per producer.
“Why restrict businesses that can do more products? If the business wants to add the sixth product, they are charged N90, 000 for NAFDAC certification. Why is that so?”
A member of the Association of Export Agents, Olufemi Kayode, also regretted that the country has not taken deliberate steps to develop her processing and export zones to international standards.
“Our terminals are in complete chaos and unkempt for international export. Go to SAHCO and NAHCO terminals in Lagos and see for yourself. The micro and small-scale exporters are not being attended to, so we have the terminal being patronised by only individual exporters.
“Only 60 per cent of what comes through the airports is informal trade and people will cut corners because the system is allowing them. Yet, the same stake and system are against small-scale businesses. No one has good knowledge of packaging, that is why our goods are being rejected or destroyed abroad,” Kayode said.
Regulators, Sharp Practices As Constraining Factors
EVEN though officials of the NAQS explained that the mandatory guidelines are clearly stated online, “most exporters,” they insist, “are always looking for shortcuts. More so, we are grossly understaffed to fully monitor the processes from the farm, to storage, packaging, and export – as provided for in the guideline.”
The Assistant Director, Investor Promotion, Nigerian Export Processing Zone Authority (NEPZA), Augustine Onyekwere, explained that air transport and export sections in the country are still labouring under the intense yoke of multiple charges.
Onyekwere further alleged that government agencies have created artificial bottlenecks to make it very difficult for the air cargo sector to thrive effectively.
“Until these hurdles are crossed, government efforts at attracting more revenue into the gross domestic product (GDP) will not materialise. That is the reason that the air cargo sector is not thriving and costs the country $250b on agro-export produce to the country alone,” he said.
Onyekwere added that it was to solve those problems and entice investors that the Federal Government designated five airports as special economic and free trade zones.
“Unfortunately, most government agencies do not understand the workings of a free trade zone,” he said.
Aviation Security Consultant, Group Capt. John Ojikutu (rtd), however, disagreed with the idea of designating already busy airports as free trade zones, while dedicated cargo airports lie idle.
Ojikutu noted that there are 22 federal airports with an average of 16 million passengers yearly; five international airports with 80 per cent of the annual passenger traffic and 90 per cent (200, 000 metric tons) of air cargo traffic out of over 100 million tons available nationwide.
“But there are 13 designated as cargo airports with less than 10, 000 tons annually, yet not one of them is considered for Export Processing Zone (EPZ), nor Economic Free Zone (EFZ), but the international airports that are also joint-users with the Nigerian Air Force (NAF), with multiple federal agencies, mostly located in complicated urban development areas and complicated security control. Who is doing these to us unilaterally using the president’s name always? Who will save us from ourselves?”
Reversing Deficits In Imports/Exports Ratio, And Domestic Cargo Distribution
THE Managing Director of FAAN, Captain Rabiu Yadudu, offered that an aviation cargo guideline should be the starting point to right the wrongs and correct mistakes that have constituted impediments over the years.
“In this document, we should be able to identify these impediments and chart an implementable action plan that will be followed by all stakeholders to achieve our common goal, which is to reverse the deficits in imports/exports ratio and domestic cargo distribution. In my opinion, having an operational single window for export will be a starting point and FAAN is willing and able to provide the enabling facilities,” Yadudu said.
The Technical Committee on Nigeria Agro Export Rejection set up recently by the Federal Government to investigate the rejection of the country’s agro-exports in the international market, has also given the assurance that respite might be on the way for idle export potential.
The committee at the submission of its findings urged the Trade Ministry to embark on a massive sensitisation and awareness creation exercise on the need for farmers and operators in the agricultural value chain to secure and adopt Global Good Agricultural Practices (GAP) certifications in collaboration with the private sector.
The report also urged the Minister of Industry, Trade and Investment and the Federal Ministry of Agriculture and Rural Development to float a dedicated budget to fund the Global GAP training, traceability, and certification of all their farmers to enable their products to qualify for exports, under the Federal Government initiative.
It further stated that the Nigeria Export Promotion Council (NEPC), in collaboration with the Trade Ministry’s Commodities and Export Department (CED) should produce documents, jingles, and offline promotional campaigns (prints, electronic, and billboards) in major Nigerian languages.
This, it said, is to enlighten stakeholders in the agricultural value-chain on the need to be Global GAP certified, to produce safe and healthy agro produce, and avoid rejections.
It is self-evident that all parties acknowledge both prospects and problems of the agro-allied sector, even as the think tanks are not in short supply of the way forward. However, time will tell if the government will be willing to match recommendations with equal intensity of implementation.
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