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Nigeria’s hope is non-oil and $1trn services export market – Awolowo

SEGUN AWOLOWO is the outgoing executive director and chief executive officer of the Nigeria Export Promotion Council (NEPC). Awolowo who has worked with four presidents was appointed to head NEPC by President Goodluck Jonathan in 2013, and reappointed by President Muhammadu Buhari in 2018. Since 2016, Awolowo has been driving the Zero Oil Plan, as an economic blueprint for Nigeria to boost non-oil exports, among several others. In this exclusive interview with a BusinessDay team led by BASHIR IBRAHIM HASSAN, general manager, Northern Operations, Awolowo highlights how the NEPC, through his leadership, has been able to scale up the export of non-oil products, leveraging on the Zero oil plan, and synergy with other agencies.

On assumption of duties as Chief Executive Officer, what was your vision to drive NEPC and Nigeria’s exports?

From research, I realized that we have been doing it wrong. We have not put exports on the front burner of our national development. Most of our development plans have not really looked into exports. And I knew that was really a major concern. After doing research, I found out that the major problem is that we are not even producing enough. I will come to quality, standards and everything later, but beyond that, we are not even producing enough.

From research, I knew that the best way to drive this is that it has to be public and private sector driving it together; and that the agency must indeed be more client-centric. I use that word in the full meaning of it. You must satisfy your clientele, because that is what keeps them going.

Basically, the NEPC is an incentive agency — you provide incentives to drive exports, and we were not even doing that enough. The ones we were doing had stalled, and I had to do a holistic evaluation of the whole thing to find out how to work. I knew I had to have collaboration to drive this because I’m not a regulatory body and I’m not a producing organisation. So I needed to work with the key players.

I identified the key players like the NIPC, Standards Organisation of Nigeria (SON), NEXIM bank, NEPZA, etc. Because everybody had been working in silos, no information, no data on exporters processed was available. Then, the minister (at the time) asked me where NEPC fits in under the Nigerian Industrial Revolution Plan, and I remember that oil prices will crash any moment and asked what Nigeria was planning. Under the Industrial Revolution Plan, we then settled for 13 strategic products to replace oil — palm oil, cocoa, sugar, rice and cashew while mining related are cement, Iron ore/metals, auto parts/cars, aluminium, fertilizer/urea, petrochemical and menthol. I was going to do a memo to the president but realized it was bigger than a memo, and instead we developed what we now call the ‘Zero Oil Plan’. The last minister said the plan was very audacious and ambitious and I replied him and said this is the time to be audacious and ambitious.

On assumption of duties, where was non-oil exports, and where is it today?

We now set new targets under the zero oil plan and identified 22 sectors where Nigeria can earn $30 billion in foreign exchange. That was during the second economic crash when this government came on board and we lost about 30 billion US dollars in our oil revenue. Nigeria realizes 93 percent of her foreign exchange from oil. So whenever oil price crashes, you have a shortfall in revenue. It affects everything we do, because that’s our only source of foreign exchange.

In some agriculture products, we identified how much we needed to plant, how much we needed to scale up to, how much we needed for integration and to have an inclusive economy. That is what we’ve been driving and we pushed it to the federal government and even private sector until the Nigerian Economic Council (NEC) set up a committee to drive the implementation of Zero Oil Plan.

As the global economy evolves, we are looking into export of services, which is a $1 trillion market where we can make so much money. We worked with the Commonwealth Secretariat to develop a plan for export of services. Later on I handed it over to the Minister of Communication and Digital Economy to continue driving it, because digital economy really means trading in services.

Read also: New produce bigger than crude oil coming

I have been a meddlesome interloper in many more ways than one because I go from ministry to ministry, agency to agency trying to drive this. Because if Nigeria is not producing, then I have nothing to export. If you’re not making films, I have nothing to export; so I have to talk to those making films, give them the proper market to attract. I have to urge Edo state to scale up palm oil production because there is a market and there is also the processing of all the derivatives of palm oil that we can make.

If Nigeria does not export, Nigeria will die! It’s simple, if you’re not an export-led economy or export-driven economy, you will continue to have these problems

In terms of figures, how have you been able to boost non-oil export?

Let me give you an example on sesame seeds. Cocoa used to be our number one export. Three years back we had a challenge with sesame seeds on certification and we got a suspension because we had some aflatoxin on our sesame. So I summoned Wacot, the company exporting it to my office here and told them about the problems. The governor of Jigawa, who also joined us in the meeting, said he would do something phenomenal in this country. He said he would take the sesame and scale it up. He cleared land in about five emirates and replanted sesame. Last year, not only did we get certification for organic sesame, sesame became number one export before cocoa in the country.

Now that is synergy; a willing company, a willing state government, that scaled up production. We grew more and worked with the certification agencies training the farmers on how to plant organically and we got the certification. That is the work we must continue in all the sectors.

We sat with Alhaji Aliko Dangote on petrochemicals. He had tried to buy the Kaduna refinery and was no longer interested in petrochemicals. I told him that the petrochemical business is a $150 billion business annually globally and Nigeria is not there! Nigeria is importing. My team and his team sat with him for about six hours. We went through the Zero Oil Plan page by page. Alhaji is so meticulous. When we finished with petrochemicals, we went to cement and clinkers and even gave us figures that surpassed our expectation in cement and clinkers.

My point is that all these things must be focused and must be laser-jet driven by government and private sector. I always go back to the example of cement. Nigeria used to be number one importing country in cement. President Obasanjo said it must stop. Three years ago, we exported cement from Nigeria. We are no longer importing cement.
This is what we must do in all these sectors, and that is what the Zero Oil Plan is calling for.

How many more companies have you supported?

Another company is Food Pro, a group of young boys exporting raw cashew kernels. We were in Vietnam together and we told the Vietnamese that we want to go into processing. We cannot just be selling raw materials to them all the time. We urged them to come and invest in a processing plant in Nigeria.

One of the guys told me: “Mr. Awolowo, you’re producing 130,000 metric tonnes, and out of that we have bought 120,000 metric tonne, What is left to process? Go back and scale up production and productivity.” Then, (Akinwumi) Adesina was minister of Agriculture and I told him we really need to pay attention to cashew because there is foreign exchange in cashew. We worked with farmers (on the use of) improved seedlings under the auspices of the Nigerian Cashew Association. In another two years, we got 270,000 metric tonnes. Now, we are doing over 300,000 metric tonnes. So, I told the guys at Food Pro to come into processing. They came back to me later with other businessmen to support them. We got BOI and NEXIM Bank, who identified an old cashew processing plant in Ilorin, called the governor and asked for support. I was even able to take the Vice President to commission that plant. They are employing over 600 women to do the work there. So it is a thing every government should support.

Another company is Casanovas, which I took to Mr. President. They are a small company that wanted to invest their money in something. They got land in Idu Industrial estate. They’re buying cassava, processing and packaging. It’s not rocket science! They got some support from a German company, and we are exporting now to Germany, other European countries and to America processed cassava, which has never been done!

If you remember, we had that big cassava revolution that even led to a glut because we had over produced. But we are now processing, and this is what we’re encouraging. All the 36 states’ commissioners for agriculture and commerce came for the National Committee on Export Promotion meeting and we took them on a visit to that, and they were asked to replicate this in their various states, to get inclusive growth, and pull women and men off the streets. There is an export market for all these things.

Cocoa is the saddest story, because the four countries that dominate cocoa production in the world — Cote d’voire, Ghana, Nigeria and Tanzania — are all jostling for eight billion dollars in revenues, that’s all! Out of it, we get over $1 billion or sometimes up to $2 billion a year on export earnings.

But, it gets to Europe and becomes chocolate; then it becomes an $80 billion market and we are not there. So we said let us rethink. Penny Pritzker, a former US Secretary of Commerce, led a team to Nigeria, but before she visited I had told her about our challenges. So, she brought the big chocolate companies here to come and see. But we’re already too late to get that chocolate that you will like or I will like, but of our children and co, let’s get them into this Nigerian made chocolate so they can get a taste for it.

We said let’s get Nestle and others to come and start producing, help us invest in some of our cocoa plantations so that they can scale up. Luckily, there is a new invention for cocoa grafting, so, there is potential in all that. For cashew, we entered into a programme with USAID to develop our cashew strategy, and we decided to do a two-legged one.

We are not going to stop exporting cashew because we need the foreign exchange, but we will increase production and productivity and then get into processing. So in that, we are able to run about three or four companies now that are processing. Some are doing semi-processed exporting. Some are doing fully processed and we are trying now to get these products into stores in Europe and America.

What are the top products with export potential?

The main thing we say is Nigeria must survive in a world economy where she no longer sells oil, and that was the audaciousness of the plan. If Nigeria is not selling oil, what will Nigeria do, what else can Nigeria sell to the world? We must look at that.
And how do we ensure that those new exported goods create enough jobs and private wealth to improve the quality of life in Nigeria?

We looked at exports to GDPs of most countries and Nigeria is about 18% but only 1% if you remove crude oil. Crude oil is 17% of our exports. Meanwhile Brazil is doing 12%, Russia 29%, China 24%, Indonesia 24%.

We looked at the top non-oil products in every country, what they’re doing. Indonesia is very interesting. It’s coal, palm oil, rubber, refined petroleum, and leather footwear. Prime Minister Nehru said in 70s to India: if India does not export, India will perish. I’m saying it again now: If Nigeria does not export, Nigeria will die! It’s simple, if you’re not an export-led economy or export-driven economy, you will continue to have these problems. What has kept us going is export of crude oil now. We’re not drinking the crude oil here! How many cars does Nigeria have to use all the crude oil? But again, we are not processing the crude oil, and that’s where the Dangote refinery is going to change the total landscape of our economy in the country, because those are the kind of scale-up projects we need. We call Zero Oil Plan our especial transformational export projects that the government must do. If the fund used to invest in an oilrig, say $700 million, is invested in cocoa plantation, you can’t lose! You will grow! Invest that kind of money you use in looking for oil in many of these things God blessed Nigeria with.

The products under the Zero Oil Plan are petrochemicals and methanol; soya beans, soybean meal and oil; sugar raw cane and confectionery; cotton and yan, nitrogenous fertiliser and ammonia; palm oil; rice; rubber; hides and leather; cocoa; beans paste butter and powder; and gold.

Those are our first 11 products, we call them Category A products. The category B products we chose are not trading as high as this other products internationally, but, they provide your economy with the mileage to move. They include the cement and clinkers; cashew; Sesame; Tomato; Banana and plantain; Oranges; Cassava; Spices, and ginger.

You just mentioned tomatoes, and being from the North I know how we waste a lot of it. What have you done on this?

We can only advise governments and businesses to go into processing; because we can export and you can earn your foreign exchange.

In terms of incentives, tell us how much you’ve spent.

We got an approval of almost N350 billion from President Buhari for incentives. We’re running the Export Expansion Grant (EEG). We had a crisis with it — in fact, by the time I came on board, it had stopped. Customs had even stopped collecting forms for payments. But we ensured reorganization of the whole thing. We made a case for government to pay off all the debts, which the government agreed to, and we are paying it off in promissory notes working with the Debt Management Office (DMO). We’ve been able to pay off almost N200 billion out of that to companies that have bad bills packed from 2007 up till date. So, we’ve been able to clear many of those.

We have also been able to energize the Export Development Fund, which is a fund for SMEs, MSMEs to draw them into the export business. We started that under the N50 billion export expansion grant we got from the federal government this year. We are taking almost 2000 companies. We have given them grants of almost 7 billion naira. We’ve been able to give companies COVID relief to cushion the effects on them. I think we’re going to be doing almost 20 billion naira on that. Then, we looked at the total export sector, because we said it’s not enough just to give the companies money — what happens when they want to export their fresh produce?

If there are no cold storage facilities at the airports, then it defeats the purpose. So we’re looking at provision of cold storage at six of our international airports, working with NAHCO. We are doing domestic export warehouses all over the country to help exporters aggregate their produce and from there it goes straight to the ship, not to the port, because everything has been cleared. There’s a committee working on this that involves Customs, NAFDAC and quarantine services.

You have mentioned so many of your achievements, but, can you tell us in brief what they are in this organisation?

I would say I have built a more client-centric organisation. I am happy with that. I have let the world know what Nigeria has to offer. I have let Nigerian companies know that there is a market for many of their products out there. I have let government know that the way forward is an export-led revolutionized policy and economy for this country. And if we don’t do that, it’s going to be a big problem for us, and I think they’re listening.

I remember once when I was on a flight with Oby Ezekwesili, we met at the airport lounge and talked about jobs. She said I must be able to attract companies to Nigeria. Let them set up the factories here for low wages and produce to export. I told her I was getting frustrated and she advised me not to stop, that no government programme or policy just happens on a platter of gold. You have to continue pushing it. That was a big encouragement for me that day. So I continued travelling to the states, meeting private sector and encouraging them.

Zenith bank invited me for one of their programmes and I told them that the next time they invite me, it has to be a non-oil business. You must move your customers into non-oil business. If you have a proposal for Tank farms and you go to a bank, the bank will give money. But, if you go with a proposal for Cashew, they would ask you to wait downstairs. Many of those Tank farms have gone bankrupt. The GM decided in our next meeting to look at non-oil investments, to finance many of these companies so that we can have the much-desired foreign exchange that this country needs. And that is a total revolution, it is a total mind-set change and I think it will continue.

Truly, government has no choice. Fossil energy is there. President Buhari is one of the first African presidents at the COP26 meeting in Switzerland that signed a commitment. What is strange about that is that Nigeria is a petrol economy. What you’re saying is that we must reduce fossil emissions; yet what you’re producing is petrol, but you have made the commitment to the future of our children and our world. So how do we finance and get money, if we’re not going do petroleum, burn our gas?

That is why we must go really deep into non-oil. Countries in the world are signing on to electric cars, saying that by 2025, only electric cars would be in their country. So, they’re not needing your petrol anymore. I jokingly said somewhere that maybe we will have to have to go and talk to our local traditional herbalists on how we can add sesame to crude oil, so we can drink it! How do we add cocoa or ginger to this crude oil so we can use it for something else? So what happens to the crude oil? It is scary, but when I look at the potential of this country, then my cup becomes half full, and I become the perennial optimist that I’ve always been.

All these we are talking are on product. We have not started on people, on the creative industry and on export of service. We have not even started on banking, on an educated English-speaking population. We have not even started on that.

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