• Tuesday, June 25, 2024
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BusinessDay

Deficient bill of lading, knowledge gap hobble Nigeria’s $4.5bn non-oil exports

Hapag-Lloyd slams $500 peak season surcharge on Nigerian cargo

Nigeria’s non-oil exports of $4.5 billion is being constricted by a knowledge gap among exporters and the challenge of incomplete documentation, including the bill lading, as well as the failure to comply with the required trade guidelines, experts say.

According to the Nigerian Customs Service, exporters must have specific basic documents for an export transaction to be allowed to exit the country.

Among these documents are a duly completed Nigeria Export Proceed Form (NXP), a Proforma Invoice, a sales contract/agreement where applicable, NEPC registration certificate, a relevant certificate of quality issued by one or more of the agencies such as Plant Quarantine, NAFDAC or SON, shipping documents including Bill of Exit, Bill of Lading and Form EUR-1

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

A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried.

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 due to 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 not supposed to stay in the port terminals for more than seven days, but several are retained for upwards of two years, 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 spend between three weeks and over two years, 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 days and over two years.

Obiora Madu, the director-general of the African Centre for Supply Chain, said most of the challenges and delays faced by exporters in the value chain centred around poor and incomplete documentation as well as 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 noted that exports thrive on a tripod of development, promotion, and the ability of exporters to submit documents that can’t be faulted.

Also, Kayode Daniel, government relations manager at APM Terminals, said “There is an established procedure and documents clearly defined by government agencies that some exporters are not complying with.”

According to him, 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 created inefficiency and delay in the country’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 was losing its export position to other West African countries and contracts cancelled by importers overseas due to challenges limiting the Nigerian government’s export drive.

“Nigeria cannot diversify to become 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 intentional about driving export trade if we must earn the much-needed dollars to grow our economy,” Madu said.

He noted that Nigeria must borrow a leaf from a country like Finland by creating an export task 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 stressed.