Incentives, packaging, standards demarket Nigerian exporters

The products of Nigeria’s non-oil exporters are becoming increasingly uncompetitive in the international market, owing to lack of incentives, poor packaging and non-adherence to global standards.

Exporters battle with high production costs at home, resulting from a difficult operating environment in the country. This often pushes up the prices of their products in the global market, scares away international buyers and makes the exporters lose profits and substantial capital.

It also puts their products at a disadvantage in a market flooded by cheaper and better packaged Asian products.

“The cost of our logistics infrastructure is very high.  Most times the local price of a commodity is higher than the international price. This is why I say that exporters need incentives,” said Obiorah Madu, chairman, export group, Lagos Chamber of Commerce and Industry (LCCI) in Lagos.

Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group (MANEG), said  the suspension of the Export Expansion Grant (EEG) is putting Nigeria’s export trade in jeopardy and also makes the country’s quest for diversification a wild goose chase.

“The potential of the EEG’s contribution to export growth is very huge, but the uncertainty in the scheme is really affecting the performance of non-oil exports in the country,’ Oyelola told BusinessDay.

Apart from incentives, some Nigerian exporters fail to compete favourably in the highly competitive market, as they fail to evolve good packaging modes that will attract buyers.

“There is the need to package your products properly. You can have a quality product but packaging can give you out.  When we do our market survey, we find that some products are poorly packaged and labeled,” said Louis Njoku, director of laboratory science, Standards Organisation of Nigeria (SON), at the Coatings Show in Lagos.

At the National Agro-Commodity Export Stakeholders Forum held weekend in Lagos, Flora Christy Olaku of the Food Safety and Applied Nutrition department of the National Agency for Food and Drug Administration and Control (NAFDAC), said there is a need for exporters to package their products properly and store them in healthy environments.

Olaku also pointed out that the manner in which some Nigerian exporters use pesticides is increasingly demarketing them.

“Some exporters will fumigate when the commodities are on the container. What happens is that once the goods get to other countries, the first thing that the foreign inspectors will perceive is the smell of pesticides. This is often why some products are rejected,” she said.

Nigeria exports raw commodities such as cocoa, rubber, beans, sheep, goat skins and sesame seeds, among others. The country also exports semi-finished or finished products such as raw leather, leather shoes and bags, aluminium, tobacco products, cotton yarn and woven fabrics.

Most of the export products do not meet international standards. Recently, Europe banned Nigerian beans from coming into its market. The European Food Safety Authority said the rejected beans were found to contain between 0.03mg per kilogramme to 4.6mg/kg of dichlorvos pesticide, though the acceptable maximum residue limit is 0.01mg/kg.

Charles Malata, technical supervisor, United Nations Industrial Development Organisation (UNIDO) said Nigerian exporters sometimes take international standards for granted.

“When the international community sets a date for compliance, we do not have to dilly-dally, believing that what we export will be accepted. This is the problem most of the SMEs here have. Many of them do not want to know what the international standards say but will keep believing that what they export will be accepted.

“But that is usually not the case. Standards change and we need to move from one stage to another,” Malata told journalists during a training on ‘The Concept of Quality in Nigeria’ held in Minna.

ODINAKA ANUDU