Lingering bottlenecks deny exporters of AfCFTA benefits

Exporters in Nigeria have expressed discontent over lingering challenges which has caused a slowdown in the momentum of the sector’s activities which excludes them from the potential benefits of the African Continental Free Trade Area (AfCFTA).

Ede Dafinone, chairman, Manufacturers Association of Nigeria Export Promotion Group (MANEG), said following the outbreak of the COVID-19 pandemic, the export sector has struggled with reduced international demand and domestic economic challenges such as high and increasing exchange rates, high energy cost, multiple taxations, port inaccessibility, smuggling, etc.

“This reflected in its performance for Q4 2020 as the export of manufactured goods fell by 3.1 percent when compared to the 74.4 percent achieved in the same period of 2019,” He said at the MANEG’s fourth AGM held on Wednesday in Lagos.

He added that domestic policies of government on non-oil export incentives and exchange rate policy affected the prosperity of the manufactured products export sector.

Darren Bennett – Voci, Managing Director, Beta Glass, revealed that exports have become more challenging due to various challenges and rigorous demands, as he was being mandated to pay an additional $394,000 to convey 57 trucks to Ghana by road due to the tariff introduced by the Benin Republic for transit goods.

This new policy for him hits harder as he revealed that Beta Glass recently invested $30 million to expand their capacity specifically to be able to utilize export opportunities.

Dafinone said efforts are being made to ensure the export process improves leveraging and announced that NEXPORTRADE Houses Ltd, a platform set up by the MAN Export Promotion Group to boost formal trade volumes between ECOWAS member States and African countries will kick off its pilot project in the Assigame international market, Lome, Togo, where made in Nigeria products, will be showcased to potential importers.

Speaking exclusively to BusinessDay, Dafinone described the Export Expansion Grant (EEG) as one of the most successful export incentives for exporters although not without bumps. He said that the government is also looking to pay the 2017-2020 export grant using promissory notes while the N130 billion backlog for 38 companies.

Read also: Proper documentation, value addition crucial for effective AfCFTA participation

“Although we have thanked the federal government for paying backlogs of EEG, it is important to note that the non-payment of the full-face value of the amounts due to exporters on the promissory notes impacts adversely on the global market competitiveness of the Nigerian manufacturing exporters,” he added.

Speaking on the theme of the AGM ‘the implication of imposition and retaliatory tariffs and non-tariff barriers on trade within the ECOWAS sub region’, Ken Ukaoha, President, National Association of Nigerian Traders (NANTS) said tariffs are key instruments of cross border exchange of goods and are among the most widely used instruments of protectionism along with the import and export quotas.

Ukaoha who was the keynote speaker said Non-Tariff Barriers (NTBs) such as embargos, sanctions, and restrictions make trade activities difficult and are trade-restrictive instruments used by countries to further their political and economic goal.

“ECOWAS regional trade has an average value of $208.1 billion but if the political will cannot be mobilized by the regional body to deal with the NTBs, optimization of trade benefits shall continue to remain elusive among African countries,” he said.

He added that the AfCFTA as an export opportunity presents yet a more serious challenge hence state parties must eliminate and resolve all NTBs using the resolution mechanisms in place.

In his remarks, Mansur Ahmed, president, MAN, said the African Continental Free Trade Area (AfCFTA) will come with challenges however it will be accompanied by huge opportunities that manufacturers and exporters can optimize.

“It is extremely important that we build the resilience our economy needs not only to scale through the present challenges but also to prepare ourselves for the headwinds still ahead and properly position to seize the opportunities that the trading platform offers,” he said.