AMAKA IFEAKANDU captures stakeholders’ views harvested during the non oil export webinar series 2021 hosted by First Bank of Nigeria Limited.
Recently, First Bank of Nigeria Limited hosted stakeholders on non oil export webinar series 2021 and deliberated on opportunities around the country’s expansion drive towards diversifying the nation’s economy to reduce the reliance on oil as the mains revenue source of the country.
As a fact, the nation’s dependency on oil for forex inflow affects government revenue, especially whenever there is a slight decline in the prices of crude oil at the international market. The situation puts both the federal and state budgets in jeopardy. This will in turn cause the salaries of public sector workers to be delayed and also lead to delay or non-payment of government contractors.
Past Forex earnings
Before the discovery of crude oil, Nigeria depended on agriculture for her foreign exchange earnings as the sector contributed about 60 per cent of the nation’s Gross Domestic Products (GDP), 70 per cent to export and 95 per cent to food needs in the country.
With the oil boom of 1970s, the country neglected agriculture and depended solely on oil for forex inflows. Available data shows oil accounted for 88.75 per cent of the Nigerian trade in the first half of 2021, contributed 7.4 per cent to the GDP in third quarter of 2021, while non oil sectors such as agriculture, traded and ICT remained dominant, contributing 29.94 per cent, 14.93 per cent and 14.2 per cent respectively.
Efforts to diversify economy
The federal government had in the past, introduced different agricultural schemes to support the nation’s economic growth. They include Agricultural Credit Scheme Fund (ACGSF), Agricultural Credit Support Scheme (ACSS), Commercial Agric Credit Scheme (CAC), and Anchor Borrower Programme among others.
The Muhammad Buhari-led administration is also doing everything possible to diversify and grow a productive and competitive economy with the available resource.
First Bank’s intervention
And in a swift intervention, FirstBank organised non oil export webinar series to facilitate sustainable exports as well as guide participants on ways of navigating the hurdles and challenges of exports in Nigeria.
The bank is also leveraging its vast experience in supporting trade businesses, especially in the SME and Corporate Business space to lend its expertise to drive discussions that will enable existing exporters, expand their export businesses and encourage new entrants into non-oil export industry.
To drive economic growth, the bank created an Export Desk to support the needs of exporters, including the designing of export products and solutions, to cater for pre and post export financing and services to foster quick processing of export collections, conversion and payments via automated platforms
The Non-Oil Webinar Series, says the FBN, was set up to create awareness for the endowment in each region of the country, open the exports opportunities prevalent in these areas in collaboration with seasoned export experts; drive grassroots conversations with existing and intending exporters to convert them to export opportunities.
Also, it is designed to help overcome export challenges inherent in these regions; engender awareness on the export potential for AFCFTA prevalent in the regions; and serve as a workshop to address concerns, challenges and solutions in the export business.
Agriculture Support Scheme
Further to this, First Bank, through its Agriculture Support Scheme, has offered a range of products and services designed to help agricultural business yield better result. The bank featured agriculture solution in maize Aggregation scheme (MAS), Paddy Aggregation Scheme (PAS), Commercial Agriculture Credit Scheme, Non oil Export stimulation facilities, conventional agricultural Term Loan and overdraft , Real Sector Support funds (RSSF) among others. The bank remains at Frontline in supporting agricultural sector to grow their business.
In various submissions, stakeholders in the nation’s trade and finance industry believe product packaging, documentation, certification as well as building supporting infrastructure will help enhance the non oil export in the country.
They also admit that export-led economies generally enjoy relative stability and sustainable growth.
In his presentation titled ‘Building Sustainable Non-Oil Export In Nigeria: Harnessing Opportunity within the AFCFTA Treaty and Agro Commodities,’” founder/chief consultant of B. Adedipe Associates Limited, Dr Biodun Adedipe says global economy is projected to grow this year and next year, and anytime global economy is growing, international market will be on the growth direction.
While acknowledging that the nation’s economy is growing, he says it is expected to be at a faster rate.
According to him, “the major challenge in the country today is because we are import dependent economy and the implications is that any time you import from another country, you are creating jobs for the country.”
Adedipe says Nigerian economy grew by 0.51 per cent , 5.01 per cent and 4.03 per cent respectively between first quarter and third quarter of 2021.
He also says the liquid external reserves stands at $41.59 billion as of November 29, 2021 with monthly import bill of $5.61 billion resulting to 7.42 months cover.
The financial expert reveals that oil accounted for 88.75 per cent of foreign trade in first half of 2021 but has only 7.4 per cent of the GDP in third quarter of 2021.
He explains that disconnect of sort is having weak linkage to the rest of the economy, adding that non oil sectors like agriculture, Trade and ICT which contribute 29.94 per cent, 14.93 per cent and 14.2 per cent remained dominant.
“There is no sector you operate in the Nigerian economy that there is no space for you to thrive if you do the right things at the right place and right time for the right person as most things are now digital,” Adedipe explains.
He stresses the need for Nigeria “to change her orientation, to export led growth or import substitution, build supporting infrastructure, set aggressive target and implement rigorous measures,” warning that “if Nigeria doesn’t Act fast, other countries will act on us.”
In another presentation, Deputy Director Policy Department Nigerian Export Promotion Council (NEPC), Akintinde Folorunsho says Nigeria has a lot of potential in horticulture sector in tomato value chain.
Folorunsho, who represented Executive Director NEPC, Dr Ezra Yakusak, says “as Nigeria imports at least 400,000 tonnes of tomato paste annually, there is a large opportunity for the manufacturer that can get it right both in Nigeria and Africa market.”
“There is massive agricultural production of tomatoes in Kano and Benue during peak season but they get wasted due to post harvest loses,” Folorusho declares.
While harping on packaging as an essential to value chain addition, the NEPC boss says “global value chains are becoming increasingly ‘buyer-driven’ and are determined by value chain specific quality attributes characterized by embedded complex quality information, global accepted standard and Codification, certification and procedures.”
He tells the gathering that “NEPC established steering committee to implement facility that will stimulate non export, safeguard jobs and protect business from the adverse effect of Covid-19.”
In his intervention, Area Controller of Customs Apapa Port, Malanta I. Yusuf whose presentation centres on ‘Export Procedure and AfCFTA,’ describes documentation as a major requirement needed before one can be export goods out of the country.
The Customs chief accuses exporters for being responsible for the congestion experiencing in the Nigerian Port, stressing that “most of the exporters failed to complete documentation process early until their consignment arrived at the Port and by the time they finished processing their various papers to clear the goods the entire environment is fully congested.”
Yusuf states that “once exporters comply with the process of honest declaring of goods and documentation, the issue of congestion will be a thing of the past.”
The comptroller also says export prohibition list was introduced by the federal government to encourage local market, provide employment and prevent shortage of goods in domestic market and to limit or restrict arms or dual use of items that may be used in proliferation.
Highlighting the benefits of AfCFTA, Yusuf quotes from World Bank report which states that “implementation of the AFCFTA would lift 30 million Africans out of the extreme poverty and boost the income of nearly 66 million others who live on less than $5.50 a day, increase Africa’s export by $560 billion mostly in manufacturing sector, boost wages for skilled and unskilled workers by 10.3 per cent for unskilled workers and 9.8 per cent skilled workers.”
The Customs boss lists forex restrictions, corruption, local content, regional security, port congestion and administrative delay, Information and Telecommunication Technology, inadequate infrastructure, finance constraints, over regulation of the non oil export sector and inefficient implementation of export incentives and support programme as major challenges of exporters in the trade supply chain.
Regional Chief Operating Officer Anglophone West Africa, Mr Eric Monchu Intong whose talk dwells on ‘Afrexim Bank as a catalyst to AfCFTA treaty’s Success” says Afrexim Bank strategic plan between 2017 and 2021 centred in four pillars.
The pillars, according to him, include promotion and financing of intra Africa trade, industrialisation and support export manufacturing , expand and deepening trade finance offering , improving capacity of Africans in trade finance and financial soundness and performance.
Addressing the gathering, Managing Director FBN Adesola Adeduntan explains that one of the strategies of the bank is to promote export in the country.
He says though the bank runs its business, but also focuses on how to use its available resources to assist the government.
With scarcity of foreign exchange, Adeduntan believes pushing for export is the only way the country will diversify the economy by increasing the forex inflow.
From views harvested at the end of the discourse, the MD says, the bank will be rightly guided in what “role it will play to help our economy and Africa in general.”