By Omodele Adigun
There is so much money to make in the export business if only Nigeria can scale up the production of non-oil exports.
According to Mr. Olusegun Awolowo jr., the Chief Executive of Nigerian Export Promotion Council (NEPC), there is so much money and the possibilities are just endless for the country in export. “Mostly, it is agriculture that is number one, export of services: ICT, Nollywood and everything. It is just phenomenal. It is a $1 trillion market traded annually,” he said.
On what the nation can do to join the league of big foreign currency earners, he stated: “It is about capacity development, building human capacity, and that is what has been lacking. Everybody just woke up and said ‘Oh I want to export.
“Australia did this sometimes ago. They went from 4,000 exporters to almost 50,000 exporters in a year by practically training them. What did that do? It boosted their non-oil export.”
At a media interface in Lagos during the export month of Fidelity Bank recently, Awolowo bared his mind on how NEPC is promoting export business in the country.
Potential exports
There is so much money and the possibilities are just endless for Nigeria in export .Let me give you world rankings of Nigeria’s agricultural product.
Mostly, it is agriculture that is number one. But I am going to come to export of services: ICT, Nollywood and everything. It is just phenomenal. It is $1 trillion market traded annually. When you look at our country, we are the number one in yam, cassava, sheanut, melon seeds, kola nut, cocoyam, sorghum. On Okra we are number two, cashew nuts with shell, we are number two, doing 836,500 metric tonnes. And palm kernel, we are number three. You go to cocoa, we are number four in the world now. Groundnuts, we are number four; palm oil, we are number five; plantain, we are number six; sesame seeds, number seven; pineapple at one million, four hundred and twenty metric tones; chile pepper, we are number eight; mango, we are number 10. So it goes on and on of so many products that we can offer.
The challenge really now is to add value to many of these products. You talk about Cocoa. Yes. Cocoa is good for us, we have been exporting cocoa. Cocoa is actually our number one export after oil. We are doing 385,000 metric tones while Ivory coast is 1.7 million; Ghana is about 800,000 metric tones. Just look at the land mass on the map. You can see that we can do so much more than that. So when we are calling for the zero-oil plan that we are introducing, it is scaling up production of many of these our agricultural products; scale up production; scale up productivity capacity of the nation. That way, you create more jobs. You begin to add value to it.
Cashew, in 2014, we did 130,000 metric tones. I was in Vietnam, Vietnam is the highest buyer of our cashew. I was challenging them that, is there something in your law that stopped you from coming down to Nigeria and next to where the cashew is, you establish your processing (plant), set up a factory. So we can now export the finished products of cashew. And the man looked at me, and said ‘Mr. Awolowo, you produced 130,000, we bought 120,000 out of it.
What is left to process? Mr. Awolowo, go back and scale up production.’
That is number one. That is key. This year, we did 160,000 metric tones. The same Vietnam bought 150,000. So we need to scale up more. So it has to be two folds. You just can’t say, oh shut down! We are not selling raw cashew because you want value addition when you have not developed the capacity and the industrial base here. So, we can’t do that. We have to do a two-legged strategy on which we are working with USAID. Yes, continue to export the raw cashew so we generate foreign exchange that we are now losing from oil.
Last year, we made over $300 million in cashew. So it is good, it is going up. And then, we scaled up production and we asked the gentleman that came on the program me, Foodpro. He was exporting raw materials. He has established a processing company now. And we are getting very good cashew from Nigeria. So that is the way we balanced it. Also with cocoa. When you go to the export of services, that is just phenomenal.
Now I will give you an example. When you look at comedy, the most popular area for comedy is the Niger Delta. From Alibaba to Akpororo and so on. Many of the comedians are from the Niger Delta, using pidgins; using yabbis as they call it. Now I tell you, the value of that will be more for the Niger Delta than their oil and gas. Oil and gas and their final products, will run out. You will even know when it is going to finish. The whole world knows because they have data that will show you when it is going to run out. We are increasing in population from the Niger Delta. The biggest export in South Africa now is a guy called Trevor Noah, a comedian. He is now doing the Daily Show. He is a South African comedian but he has now got the anchor of the Daily Show (in US). It used to be Justin Heward. It is one of the biggest shows. And he is a model; he is speaking for Africa and for South Africa. That is another thing we have not even looked at for the Niger Delta exporters. You look at the Nollywood, how we can do that.
We are currently working with the Commonwealth Secretariat on an export strategy for services. And it will cover all about this, how we can do it. So the opportunities are just enormous.
Challenges
You talk about the challenges. These are infrastructure challenges that we face as a country. The Nigerian Industrial Revolution Plan, which the former administration came up with, is going to be continued by this government. It has identified that the way to go about it. The challenge we have really is infrastructure. We suffered big deficit of infrastructural development in this country. We don’t have the warehouses, we don’t have the storage facilities, we don’t have the roads to be able to move these products. We don’t have the train to move these products. They are big hindrance to export development in this country. But the government is seeing to these, and we are happy about that. On the other hand, we look at new technologies that can help us and can avail us to go past these. And those new innovations are all technologically based and driven. So when your exporters are not even properly trained on where they can get access to funds. For instance, you can look at say, rather than going by road, you want to freight your goods. Then you cost it properly. You observe some understanding of some economies and how it can work. And you can get your products down. It is about capacity development, building human capacity, and that what has been lacking. Everybody just wake up and said ‘Oh I want to export.
And then, you now run into fraudulent freight forwarders or agents and you get into a crisis because you don’t understand the process yourself. Now we do our zero to export programme to train exporters. But again we lack the capacity to do this training properly. So in partnership with Lagos Business School and finance by Fidelity Bank, we are able to train exporters and develop them.
Australia did this sometimes ago. They went from 4,000 exporters to almost 50,000 exporters in a year by practically training them. And, of course, what did that do? It boosted their non-oil export.
Value addition
On MSMEs and processing, how are they going to benefit? That is real very key because we are trying to move exporters from exporting just raw to either semi-processed or finished process. So practical education would teach them. It would show them how to go about that. And that is very key. And it is going to benefit a lot of MSMEs and SMEs because that is the direction the country wants to go; move from exporting raw to finished products so that we can now put value addition.
On solid minerals, we obviously know that so many solid minerals are being smuggled and just taken out of the country. We had Lead poisoning that happened just couple of years ago. But the good news is that the Solid Minerals Ministry has been working on this. And we went to present the zero-oil plan to the Minister, Dr. Kayode Fayemi, some weeks ago, discussing how we are
to be working with their sectoral strategy in order to move and promote export. He was more concerned first about import substitution.
He was looking at it that way because, when you look at what Nigeria has achieved under the Nigeria Industrial Revolution Plan with cement, it is very good example.
At a point, Nigeria used to be a net importer of cement. We stopped importing cement now. Nigeria exported cement last year. Dangote exported cement last year from Nigeria. So Nigeria is no longer importing cement. So we are no longer spending foreign exchange on that. The idea on bitumen, on limestone, on every minerals, let us scale up production in all these. So that we stop importing. I was also sharing with the Minister (the market value of) Gold. When we looked at it internationally, gold was traded annually at $400 billion.
Nigeria is not part of it. Yet we have gold in Nigeria. And there is old wise saying that, in Gusua, in a very hot afternoon, when you kick hard on the ground, you are kicking gold dust. Just to show you what is possible in Nigeria. So we are going to be working with the Solid Minerals Ministry. At the last National Economic Council Retreat we just had, a couple of governors from the solid minerals producing states also raised that issue that ‘look, we want to start exporting gold.’ Not only import substitution, but we must make foreign exchange from this end.
You talked about crop processing plant, I saw one on my way to Ado Ekiti. It is sad that it was started but it hasn’t been completed. Our appeal to the Ministry of Agriculture is that we need to finish these processing zones so that our farmers can use them and get benefit from such. Also on our own ministry, we also have the Commodity Exchange.
We can use that, with the crop processing zones, so that our farmers can use and get their value for their crops: they are stored and they(farmers) are paid. They don’t have to wait; they will know the value (of the crops) as they are planting and harvesting. So it is a good business it has been done successfully in Kenya and Rwanda. So there is no reason why we can’t do it here.
You talked about incentives. Yes! We are an incentive agency at NEPC. We provide incentives. The one we have concentrated on so far and so long has been the Export Expansion Grant (EEG), which is, we just leave you until you finish exporting. Then you come back. Once you remit through your bank and through CBN, then you collect your incentives.
Now, look at it, if you are processing this leather cover, it is a finished product. So it attracts 30 per cent of the value of that then. So if you export like $3 million worth of it, you come back to us and you collect a cheque of $900,000. So when you look at it, you see that that is ripe for manipulation and corrupt practices because that threshold was just too large. That has been suspended and we are walking on a new one. The most important one that we like to stress is the Export Development Fund (EDF). That is a pre-shipment incentives. That is the grant you can use to help SMEs. We are calling on the Federal Government to activate that incentive. That is the one that can be used to help SMEs, MSMEs and Nigerian companies to grow because the ones benefiting from EEG before were labelled foreign companies. The big companies come from abroad, set up here and take the advantage of that.
On the jute bags, , we made a case to the Federal Government on the jute bags for cashew exporters on behalf of the Nigerian Cashew Association, which we are supporting. It is very key because that is what absorbs the moisture in the cashew so that you can get the correct quality and value that most of these exporters want to buy. Even you can see that we increase the export without the jute bags. Imagine the boom it can do when we get it. And then it will attract better price for the cashew. That is what is really about because when it goes out like that, they check it and look at the moisture, and they reduce your value for you. So that is why exporters are not happy. But when we get it in place, it will increase that.