Cargo imports jump 21% in first half of 2019

Importation by cargo (perishable and non-perishable products) from Europe, America and other parts of the world through the country’s airports is seeing a significant increase as a result of the relatively relaxed foreign exchange policy, BusinessDay’s findings show.

“Since the introduction of investors and exporters window last two years, there has been stability in foreign exchange rate,” a source at Customs said.

BusinessDay visited two air cargo handling companies, Nigerian Aviation Handling Company, Nahco Aviance (NAHCO), and Skyway Aviation Handling Company (SAHCO) which handle almost 95 percent of all export and import cargoes going through Nigerian airports.

Findings show that total volumes of cargo (from NAHCO and SAHCO) increased by 21 percent to 33,205,954.39kg in June 2019 from 27,239,029.6kg the previous year.

On the other hand, exports fell by 25 percent in 2018 to 4,116,243.1kg from 5,524,953.1kg 2019.

Data gathered from NAHCO show that air cargo exports fell by 28 percent to 3,696,940.10kg from 5,201,229.10kg in 2018. On the other hand, the volume of air cargo imports increased by 17 percent to 16,906,938.39kg in 2019 from 14,384,540.6kg in 2018.

Similar data obtained from SAHCO show that air cargo imports increased by 26.7 percent to 16,299,016kg in 2019 from 12,854,489kg in 2018. However, exports increased by 29.7 percent to 419,303kg in 2019, from 323,724kg in 2018.

Godwin Emefiele, governor, Central Bank of Nigeria, last month said since the establishment of the I&E Window in April 2017, CBN recorded about $35 billion in autonomous inflows through this window alone. As a result, exchange rate pressures eased considerably across all markets as the rates converged to about N360/US$ and the distortive premium almost eliminated.
Emeka Enenanah, head of operations, NAHCO, said the economy has been a major driver for importation in Nigeria, adding that with stability in dollar rate, importers can forecast and make business decisions.

“On the other hand, exporters are majorly small scale business owners and farmers which constitute small players in the economy. This is rainy season and farmers are just harvesting now, so in the next two or three months we expect exports to pick up because Nigerians export mostly agro products,” Enenanah said.

Seyi Adewale, chief commercial officer, Nigerian Aviation Handling Company plc, told BusinessDay that some of the commodities being exported are palm oil, vegetables (fresh/dry), melon (egusi), ‘ogbono’ seeds, ‘cashew nut’, ginger and garlic. Others include zobo leaves, yam, plantain, pepper, cocoa, bitter cola, cola nut, garri, dried fish, yam flour, cassava flour, plantain flour, cocoyam, vegetables and various kinds of fruit.

Detoun Abbi-Olaniyan, founder and CEO, Thistleberry Natural Farms, said despite the Federal Government’s moves to promote export of agro products, Nigeria still relies a lot more on its major exports of oil and very few agro-allied products.

“We are not prepared to airfreight out of Nigeria. Our facilities are not geared towards exports. The first port of call for fresh commodities before it gets to NAHCO or SAHCO is the inspection point, which is the Nigeria Agricultural Quarantine Service (NAQS). You can’t compare facilities in NAQS to what you will find in Ghana. The facilities are 20 years behind. Inspection and testing are still done manually or outsourced. The technical skill still needs to be renewed.

“If the first call of export is this way, contamination can come in at any point in time. This is why our products are not accepted in other countries. Even if the product left the farms fresh, the facilities available can’t keep them fresh for so long. When the commodities manage to get to NAHCO or SAHCO, you see confusion around there. It is like an open air space where products go in and different people come into contact with it. This is enough to discourage an exporter who doesn’t know the business.

“Apart from air freight being expensive, our products are not produced to standard and we do not package to standard. You cannot produce for yourself and say you want to export. The few people that understand the business are the ones managing to run it. Majority of what we export are what we feed Nigerians in diaspora, who make up less than one percent of the entire population of one nation,” Abbi-Olaniyan explained.

Niyi Akenzua, executive director, finance and risk management, Bank of Agriculture, said Nigerian agricultural produce are taken to Ghana for processing so they can meet international standards and this is not good.

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.

“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 Lagos Chamber of Commerce SME Group.

“There is also no policy in place to support exporters,” Kachikwu said.

IFEOMA OKEKE