• Wednesday, May 29, 2024
businessday logo


Nigeria’s $4.5bn export proceeds at risk over poor paperwork, non-compliance

Nigeria’s $4.5bn export proceeds at risk over poor paperwork, non-compliance

As Nigeria struggles to earn more foreign exchange to salvage the depreciating value of the country’s battered naira and slow its galloping inflation, dollars earned from non-oil export proceeds are currently at risk.

Nigeria’s non-oil export proceeds valued at $4.5 billion are being threatened by poor documentation by exporters and failure to comply with trade guidelines.

In 2023, Nigeria’s non-oil export proceeds declined by 6.25 percent to $4.5 billion compared to $4.8 billion earned in 2022, according to Nonye Ayeni, executive director of the Nigerian Export Promotion Council (NEPC).

Analysts warned that the value could further decline this year if the challenges hindering export trade in Nigeria are not resolved in earnest.

BusinessDay findings show that thousands of export containers get trapped at port terminals after facing logistics hurdles to move from the export processing terminals and warehouses to the ports in Lagos.

The standard, according to analysts, is that export goods are supposed not to stay in the port terminals for more than seven days, but today, several stay for over two years in the port jeopardising the Nigerian Ports Authority and the NEPC-created Export Processing Terminals and Export warehouses respectively.
Today, most export cargo that gain access to the port, spends between three weeks and over two years at the port while some end up not leaving Nigeria.

A recent visit to Apapa Port revealed that a total of 4,837 export container boxes were trapped at the port. A breakdown shows that about 1,940 containers spent between zero and 10 days; 1,524 containers stayed between 11 and 20 days; 757 containers spent between 21 and 30 days while 616 were categorised as abandoned export containers for spending between 31 and over two years.

Obiora Madu, director general of the African Centre for Supply Chain, said most of the challenges and delays faced by exporters in the value chain are around poor documentation and non-compliance to trade guidelines.

According to him, 95 percent of documents submitted by exporters have discrepancies due to a lack of export skills.

Citing an example, Madu told BusinessDay on the phone that an export document was brought to his desk during his days in the bank, and after going through the documentation, he called the attention of the exporter to one missing document.

He said the exporter insisted that the document was not needed, only for the goods to be detained in the destination port and the exporter was compelled to return to get that missing document.

“That incident caused both the exporter and importer additional delays and losses that could have been avoided if the right thing was done in the country of origin, Nigeria,” Madu said.
Madu said exports thrive on a tripod including development, promotion, and capacity of exporters to submit export documents that nobody can fault.

Confirming this, Kayode Daniel, government relations manager at APM Terminals, said there is an established procedure and documents clearly defined by government agencies that exporters are not complying with.
Daniel said the inability of exporters to complete the documents required for the containers to leave the port is creating operational bottlenecks for the terminal operator resulting in multiple handling of export boxes.

Technically, Daniel said, exporters’ action or inaction stalls the shipment of goods because Customs would not authorise the loading of export boxes without proper documentation.

BusinessDay discovered that the development has been creating inefficiency and delay in Nigeria’s export value chain as new export cargo finds it difficult to enter the port while those in export processing terminals spend longer days, thereby jeopardising the quality of Nigeria’s export goods shipped to international markets.

Also, Lukman Shittu, chairman of the Nexus Association of Maritime Transport Operators, said Nigeria’s exports do not get to the international market on time, and that is why exports originating from Nigeria do not meet quality standards.
Shittu said the country is losing its export position to other West African countries and contracts are cancelled by importers overseas due to challenges limiting the Federal Government export drive.

“Nigeria cannot diversify into becoming a major exporter of non-oil goods if it remains business as usual. We are not serious because up until now, we have yet to make exports seamless, especially the small exporters. Nigeria needs to be international about driving export trade if we must earn scarce dollars to grow our economy,” Madu said.

He said Nigeria needs to borrow a leaf from Finland by creating an export tax force to ensure export bottlenecks are resolved using phone calls rather than memos.
“We need to give a mandate to government agencies involved in the export value chain to ensure speedy clearance of export, introduce technology to check delays and fast track documentation. We also need to build the capacity of Nigerians to become good exporters by ensuring they take certification that would prepare them to become good exporters,” he said.