Air cargo exports rise on weaker naira and trade promotions

Exportation of both perishable and non-perishable products from Nigeria to Europe, the US and other parts of the world, through the nation’s cargo airports has seen a double-digit growth on the back of a weaker naira, as well as the recent trade promotion drive by the Federal Government.

“Over the last 12 months or more, there has been a lot of shortage of foreign exchange, which has driven people to go into export to earn dollars. This could be the general driver or explanation,” said Ede Dafinone, chairman of Manufacturers Association of Nigeria Export Group (MANEG).

BusinessDay recently visited two air cargo handling companies, Skyways Aviation Handling Company Limited (SAHCOL) and Nigerian Aviation Handling Company, Nahco Aviance (NAHCO) which handle 100 percent of all export and import cargoes going through Nigerian airports.

Data gathered from NAHCO show that air cargo export soared from 9,609,772 kilogram (kg)in 2015 to 12,094,952kg in 2016, showing a 25.8 percent increase.

On the other hand, the volume of air cargo imports declined significantly from 75,016,936 kg in 2015 to 52,842,852 kg in 2016, which is a 41.96 percent drop.

Similar data obtained from SAHCOL show that air cargo exports rose from 3,147,842kg in 2015 to 6,665,340kg in 2016, showing a 111.74 percent rise.

However, imports fell from 12,440,234kg in 2015 to 11,327,915kg in 2016, showing a 8.9 percent fall.

Seyi Adewale, chief commercial officer, Nigerian Aviation Handling Company Plc, explained that the Federal Government has been doing a lot of awareness campaigns through its agencies, such as Nigerian Export Promotion Council, (NEPC), which has seen more farmers, middle-men and manufacturers moving into export.

Some of the commodities being exported are palm oil, vegetables (fresh/dry), melon (egusi), ‘ogbono’ seeds, ‘cashew nuts’, ginger and garlic. Others include zobo leaves, yam, plantain, pepper, cocoa, bitter cola, cola nuts, garri, dried fish, yam flour, cassava flour, plantain flour, cocoyam, vegetables and assorted fruits.

“We are seeing a rise in exportation and this makes us happy. Our products are in high demand in America, Europe and Africa. Products that go to America include dry fish, crayfish, palm oil, groundnuts, egusi, ogbono and yam,” Jasper Awunor, coordinator of NAHCO Warehouse told BusinessDay.

“We also export similar products to Europe, apart from crayfish and dried fish. We also export yam, beans and garri to Europe,” Awunor said.

Awunor said Nigeria mostly exports perishable products such fruits and vegetables to the UK, Ghana and Zimbabwe, as well as some other African countries.

Seyi Adewale, earlier cited, said NAHCO currently has seen an increase of about 50 percent in exportation between 2015 and 2016, adding that its revenue has spiked by 52 percent, which is a result of the current devaluation of the naira.

He added that government’s enlightenment campaigns show present and prospective exporters the opportunity and what they stand to gain by exporting, noting that another reason for the increase in exportation is that the tariffs are reduced at the export end, compared to the import end, in order to encourage people to export.

A manufacturing exporter said cargo export could have been spurred by easier formalities at cargo airports, lower tariffs and cheaper rate of using the medium for export.

Nigeria’s currency, the naira, has taken a hit, on the back of foreign exchange crisis caused by oil price lows.

Government has shifted policy focus to the non-oil sector, to earn foreign exchange and diversify revenue. But this is not yet yielding significant fruit.

An International Trade Centre (ITC) report shows that out of $35.54 billion worth of exports done in 2016, only $3.04 billion was non-oil export.

“The major challenge we face is that the cost of exporting products out of Nigeria is still very high,” said Jon Kachikwu, CEO of Jon Tudy Interbix, an exporter to the US, who is also the chairman of the Lagos Chamber of Commerce SME Group.

 

ODINAKA ANUDU & IFEOMA OKEKE