• Sunday, June 23, 2024
businessday logo

BusinessDay

AfCFTA: Nigerian exporters drilled on coping with supply issues to conquer the African market

AfCFTA: Nigerian exporters drilled on coping with supply issues to conquer the African market

Nigerian exporters must overcome supply issues if they ever wished to conquer the African market with over 2.5 billion market size (persons).

This is as the Nigerian business community must strive to join the export business to earn foreign currency and not only ease the pressure on the nation’s foreign exchange system but to have direct access to hard currency for their own good.

These were handed down in the week by Aliu Sadiq, one of the experts in market penetration techniques, who is an assistant director with Nigerian Export Promotion Council (NEPC), who also said that the Africa Continental Free Trade Agreement (AfCFTA) is around the corner, only waiting for the structures to be put in place to moderate the free market zone so goods can begin to move easily within Africa.

Sadiq had also said the continent is working hard to make goods move from one African country to the other instead of having to first move to Europe before coming back to Africa, a scenario he said has continued to make the goods not competitive even within Africa.

The assistant director insisted that West Africa market zone (ECOWAS) is Nigeria’s first hanging fruit as a market to capture.

He said any country boasting of starting business in AfCFTA must be wrong because the structure is yet to be set up and that the authority to approve the papers to enable export is not yet set up.

He said the biggest countries of the world are top exporters and that the greatest advantage of AfCFTA is access to foreign currency (forex). “This is why the FG of Nigeria is reviving the export processing support fund soon.”

He said the target for Nigeria should be to make the world a market for Nigeria away from oil. He warned that countries that indulge in massive borrowing without large export base would be courting disaster. “This is why the FG is doing everything to push up the non-oil export sector.”

He said Rivers State has oil palm and cassava as its areas of advantage and must do everything to maximise the areas for export.

On supply challenges that exporters face, Sadiq said an exporter must achieve the ability to source supply steadily and consistently to required certifications and standards. He said that is what makes the difference in the export business because of the need for demonstrable ability to meet orders at the right time.

He tutored on: “Supply is the biggest challenge in export business. The exporter must see to the ability to supply the right quantity, the right quality, at the right time.

“The European market is the toughest in the world. Their producers especially their farmers are very strong and try their best to ward off competition. So, Nigerian producers and exporters should try the ECOWAS market first.”

On the other chain issues to deal with, Sadiq mentioned product range, product size/grading, procurement of raw materials, compliance issues especially for the EU market, quality control procedures, production flow/steady flow, production process development, equipment quality, test/lab facilities, export packaging, accommodation/warehousing considerations, and certification issues.

He warned against urge to cheat in export business, saying cheating is the worst thing an exporter would want to do. “This behavior seems rampant in sesame seed business. Most buyers say products from a particular state in the upper east Middle Belt of Nigeria are often mixed with sand to increase quantity because the product has same colour with sand. When this gets abroad, they will reject it and may blacklist the exporter. So, there is need for the exporter to test the product at all stages to be sure before shipping it out.”

He also mentioned logistics as another key element to sort if one ever wanted to be a successful exporter. He advised some of those in the export business to consider playing in the logistics value chain especially in the cold room segment. “This involves delivery issues for exporters. They need to deliver according to terms and timelines of the contract plus quantity. Beware of handling of products in transit.

“You need to do aggregation to create volume; that is to decide products that go together in same delivery batch to meet volume to deliver. Before promising what to supply abroad, crosscheck Nigeria’s total output per year in that product to avoid over-promising.”

To capture Africa, the expert advised, “Let us go into processing and value-addition especially in beverages, shoes, etc. Rejecting products abroad is rampant and all energy must be directed at stopping it.”

Sadiq touched on marketing and urged the exporters to consider company brochure, company website, product information, knowledge of product application, understanding disputes handling processes, and customer relationship management.

He said sales and planning were important too. “You must have an international sales plan and distribution plan. You must need to capture the local market so as to encourage Nigerians to consume local products to boost the economy.”

On pricing, he said: “Beware of add-ons, calculate all expenses, consider the price in the importers market before determining the price of your products for export.” This, he said, is to avoid building your price without capturing some expenses you easily overlook.

To build up experience, he urged budding exporters to practise with the local market, improve their product quality, increase the size, efficiency, etc. “Study the external markets and then try with samples. Research a lot on your product so you can be a kind of authority.’

On sourcing finance, Sadiq urged the exporters to Know the history of the product and financing, profitability, financial situation, bookkeeping, access to credit, etc.

He said communication is very important in the export business. “Consider available means of communication such as email, whatsapp, fax, website, skype, chat, etc. Build good customer service plus effectiveness of communication.”

On management, he urged them to create organizational structure of your firm, commitment and transparency and cooperation. He said it is key to build a culture of honesty and integrity, else, you fizzle out.

“Human resources management is important in your running of your export business. Try to do staff training, have job description, acquisition and selection of personnel must be carefully treated.

“Your must imbibe corporate social responsibility (CSR) strategies in your business so you can be noted for some good work in certain areas such as fighting child labour, forced labour, human rights. Above all, follow the rules.’

In his intervention, the south-south zonal coordinator of NEPC, Joe Itah, gave key points, saying Africa is the focus with a market size of over 2.5 billion persons. He said challenges abound but training will ease it.

Read also: Requirements needed for Nigerian businesses to export under AFCTA

In an address Itah presented on behalf of the Executive Director of NEPC, Ezra Yakusak (PhD), the zonal coordinator said it was thrilling to for the first time have this particular type of capacity building workshop in Port Harcourt, referring to Export Market Access for MSMEs.

He said the pandemic has further exposed nations across the world to the vulnerability and volatility of oil as a single source of major economic reliance, with Nigeria included.

“The overarching objective of the programme is to acquaint Micro, Small & Medium Entreprises (MSMEs) with the requisite knowledge to penetrate the foreign market and compete favourably with their peers from other nations of the World.

“Today’s event is couched with the focus of maximizing our endowed economic position – in areas of both competitive and comparative advantages, for the West African market, not forgetting also the prospects put forward by the establishment of the African Continental Free Trade Area (AfCFTA) – the largest single trade bloc expected to unite over 2.5Billion people and population within the African market.

“Let me consider every exporter here as being fortunate because the challenges surrounding issues of market penetration are numerous, quite daunting, and frustrating especially when you are either a budding exporter or an old hand wanting to introduce your product to a new market. A perfect grasp of market access techniques, therefore, remains as one of the needed bedrocks in the value-chain to successful export business.

“At this point, I need to underline that as an exporter you have to always keep an eye on how to find buyers for your export products – granted that you already have quality products and in sustainable quantity because if you are not able to identify customers and offload your products, all your efforts will be in vain.

Selling products in the international market has never been a simple adventure – considering various inhibiting characteristics such as diverse language, geographical distance, cultural differences, the difference in respective Government policy focuses, and lack of market knowledge among others – which exporters have to overcome.”

He said it is due to the growing concern to subdue these challenges and make exporters gain more access to foreign markets that NEPC has today assembled experts in International Trade who will share practical experiences, offer useful techniques on getting your products ready, and provide buyers too.

The ED/CEO charged all present to take advantage of the meaningful discussions that took take place in this forum to enhance the transformation of their export businesses – as this would enable them to contribute meaningfully to their personal development and the growth of our national economy.