- Containers laden with export goods
As many shipping firms are complying with the Federal Government’s directives on Nigerian Export Proceed (NXP) numbers, the Naton looks at the reason the government needs to diversify its export base away from oil so that the country can win its battles against unemployment and poverty.
With the collapse of oil prices at the international market, exporters and other stakeholders in the maritime industry said the country has to navigate a major oil price crisis worsened by the coronavirus pandemic.
This, stakeholders said, underscores the need for Nigeria to look outward, diversifying its export base away from the volatile commodity, if the country is to win its battles against unemployment, insecurity and poverty.
Export of non-oil goods:
As the new year is fast approaching, the Federal Government has been urged to make export of non-oil goods one of the determinants of the economic growth and development of the country.
The Federal Government, the stakeholders’ said, needs to formulate policies and develop strategies that will lead to increase in exports and makes it rank among the highest priorities of its agenda for next year, to stimulate economic growth and reduce poverty.
Apart from the fact that exporting is beneficial to the nation’s economy, maritime analyst and exporter Mr Gbolahan Adetiba, urged the government to intensify efforts on the export of non-crude oil to continue togenerate revenue and foreign exchange needed to develop the economy further, while taking a bold step that would lead to the diversification of the economy on a large scale.
Adetiba urged the government to invest disproportionate amount of the nation”s resources on maritime trade, agriculture and other mineral resources to ensure a balanced term of trade, economic growth and development
Findings revealed that many shipping companies are complying with the Federal Government’s directives on Nigerian Export Proceed (NXP) numbers.
The Form NXP is a mandatory document to be completed by all exporters through authorised dealer bank for shipment of goods outside Nigeria irrespective of the value and whether or not payment is involved. Any customer willing to engage in export business is required to register with the Nigeria Export Promotion Council.
Investigation has also shown that the Nigerian Shippers’ Council (NSC), in partnership with the CBN has carried out three sensitisation meetings in Lagos and Port Harcourt to educate shipping companies and exporters on the need to implement the directive on the NXP.
Its Executive Secretary, Mr Hassan Bello, told The Nation that the NSC is also working with other relevant agencies of government and exporters to ensure full compliance so that exports without the NXP are discontinued.
Bello said the Federal Government would always encourage investors in the maritime industry with incentives and called on shipping companies to follow the directive issued by the Central Bank of Nigeria (CBN) to enhance their operations.
Bello said he appreciated the terminal operators for the removal of demurrage charges on cargoes last week covering the period of the #EndSARS protest.
“We are visiting to see the challenges confronting terminal operators after the disruption of operation during the protest. We also want to ensure that there are no spillovers that will affect the nation’s economy, as it will have adverse consequences. Shippers were not able to remove their cargoes so there is need to think about it and come up with incentives so that they can do so,” he said.
Bello noted that the NSC, Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) are working to ensure tax incentives and for terminal operators to have 98 per cent independent power supply.
Another exporter, Mr Leke Adetowubo, said the best government could do “is to eliminate the obstacles to the smooth functioning of market forces and provide information to exporting firms about destination markets and foreign competitors’’.
“The two principal compositions of Nigerian exports are oil and non-oil exports. In the past, non-oil exports, led by primary commodities, drove the economic growth of Nigeria. However, this template changed with the discovery of crude oil in 1956. With the increased exploration activities, revenues accruing from oil export have led to increased foreign exchange earnings, more revenue for government, and higher contribution to GDP.”
The government, Adetowubo said, needs to open up the economy and pursue external-oriented trade policies by vigorously pursuing export to achieve growth and development.
“There is an avalanche of evidence to show that exports are correlated with economic growth and development of countries – developing and developed alike.
“Nigerian export earnings from major agricultural crops contributed significantly to the Gross Domestic Product (GDP). Non-oil exports comprise agricultural products, solid minerals, textiles, manpower, etc. It is made up of every other thing we export from Nigeria except petroleum products. Manufactured exports consist of textiles, beer, cocoa butter, plastic products, processed timber, tyres, natural spring water, soap, detergent and fabricated iron rods. Agricultural export merchandise included cocoa, groundnut, palm oil, cotton, rubber, yarn, palm products, fish and shrimps.
Increasing the availability of credit
The availability of short and long-term credit is crucial to exporters. This is necessary for small and medium enterprises, for which the credit constraints are more binding than for large firms. Since SMEs make up the large majority of firms, improvements in this area are necessary to favour export development.
Simplifying regulation
The government needs to simplify regulation related to exports; long bureaucracy procedures negatively affect especially new exporters. At the same time, governments should improve information collection and dissemination about foreign markets and requirements for exporting.
Improving cooperation among economic actors
Besides traditional policy instruments, export growth could be favoured by improving cooperation among exporters and between the government and business actors. The stimulation of export growth requires the combination of short- and long-term policies.
Strategic collaboration between different levels of government and the private sector is widely considered a key element for policy success.
A shipper, Mr Sunday Felix, also called on the government to enhance the domestic enabling environment for potential exporters in terms of infrastructures, regulation, access to finance, insurance, fiscal policies; foster the strategic cooperation between private and public actors and among domestic producers, exporters, and policymakers; improve the productivity and technological content of domestic goods, and provide incentives to nurture innovation; facilitate the access to credit, serve to build the country image in foreign markets; offer targeted and tailored assistance, and rely on continuous evaluation. These are required to be supported by monetary and fiscal policies designed to improve the enabling environment; and stimulate institutional development.
