Post by Trade facilitator on Nov 11, 2022 20:58:26 GMT 1
Infrastructural Deficiency, High Cost of Funds Have Impaired Export Competitiveness
In this exclusive interview with James Emejo, the Executive Director/Chief Executive, Nigerian Export Promotion Council (NEPC), Dr. Ezra Yakusak, discusses the challenges of the country’s non-oil export sector, and its contributions to the diversification agenda of the current administration. Among other things, he said the government’s strategy was to create an avenue to ease exports as well as make Made-in-Nigeria products globally competitive.
What is your impression of the non-oil export sector vis-a-vis the government’s diversification agenda?
Very good question. I must tell you that the key objective for establishing the NEPC in 1976 was borne out of the need to have an alternative source of foreign exchange earnings for the country through the export of Made-in-Nigeria products. Of course, over the years, successive governments have made deliberate trade policies and incentives that will significantly impact positively on the non-oil sector.
For example, we have the Export Expansion Grant (EEG) scheme among other incentives created to boost the volume and value of our exports. So, coming back to your question, the government have done very well especially if we juxtapose government support with current economic realities. For example, only last year, the Federal Government under the National Economic Sustainability Programme (NESP) released a N50 billion-grant to drive the diversification of the economy through non-oil exports. The grant as you know was also used to mitigate the negative effect of the COVID-19 pandemic on businesses, especially MSMEs.
Only recently, the Central Bank of Nigeria (CBN) launched the ‘’RT 200 ‘’ Foreign exchange programme which is an intervention programme targeted at generating $200 billion in Foreign Exchange (FX) earnings from Non-Oil Proceeds over the next three to five years.
To complement the efforts of the CBN in actualizing this objective, the NEPC has set up the Domestic Export Warehouse (DEW) and the Export Trade Houses (ETH) which are structures that will help reduce the cost of exporting our goods by strategically creating an avenue to ease exports and thereby make Made-in-Nigeria products competitive in the global market.
What exactly is the mandate of NEPC and how much of it has been realised?
The Council’s mandate is clear. Our vision is to make the world a marketplace for Nigerian non-oil goods and services while our mission is to spearhead the diversification of the Nigerian economy by expanding and increasing non-oil export for sustainable and inclusive economic growth.
Simply put, section 4 of the NEPC enabling Act empowered the Council with the special responsibility of promoting the development and diversification of Nigeria’s export trade and assisting in promoting the development of export-oriented industries in Nigeria, among others.
Since the Council was created 46 years ago, I must say that the NEPC has made significant progress in terms of building the capacity of exporters, creating awareness of the potential of the sector with a view to stimulating the interest of Nigerians to participate in export business and more importantly in driving activities in the sector through strategic export intervention programmes and projects. Some of these export intervention programmes and projects have significantly helped in increasing the basket of exportable products from Nigeria. So, in a nutshell, I can tell you that the Council is living up to its mandate.
What do you think are the major challenges of the non-oil export segment and how have you responded to these?
The challenges plaguing the sector are numerous. These challenges have over the years made our products less competitive in the international market despite our comparative advantage. Some of these challenges include but are not limited to infrastructural deficiency, such as incessant power outages, poor road networks to serve as a channel for distribution of goods and services, lack of access to affordable finance as well as logistics problems and poor quality and packaging of Made-in-Nigeria goods.
However, the NEPC in collaboration with key stakeholders and relevant Ministries, Departments and Agencies (MDAs) of government is working assiduously to address them. For example, through the ease of doing business initiative of the Presidential Enabling Business Environment Council (PEBEC) among other export intervention projects such as Export Trade Houses and the Domestic Export Warehouse, I am optimistic that these challenges will be reduced to the barest minimum.
According to data, the services sector is yet to record any values in terms of non-oil exports. What is the challenge and how is the council addressing this?
The impact of Trade in Services export globally cannot be over-emphasized. In 2021, global services exports were valued at $6 trillion, representing 5.9 per cent of world GDP and 22.6 per cent of total world trade in both goods and services. Indeed, the trade in services sector is critical to the diversification of the economy. It is for this reason that the NEPC and the Commonwealth Secretariat London partnered to produce reliable data on the export of professional services in Nigeria. Suffice it to say that there had been previous attempts to create awareness of the Trade-in-Service sector of the economy, including the creation of the National Strategy for Export of Professional Services in 2010 through the Commonwealth in 2016 which assisted Nigeria to develop a road map for the service sector.
However, our current focus of collaboration with the Commonwealth Secretariat is on data/statistics collection and management. This is critical to our export effort as it would fill the gaps in collecting or capturing data from relevant institutions in order to generate, analyse and use statistical information on Trade-in-Services in line with the global trend. For example, the creative industry and the recent massive investments in the tech-enabled start-up ecosystem to support our youths, all have the capacity to generate wealth and job opportunities for sustainable economic growth along the entire value chain. I believe with the right investment in the services sub-sector by relevant MDAs working with the private sector Nigeria will be able to maximize the opportunities globally.
No doubt, a lot of funds have gone into the Export Expansion Grant scheme, how effective is the scheme to date and what are the challenges and way forward?
The EEG, which is a post-shipment incentive is a way of supporting active exporters in increasing the volume, value and quality of their exports. It is essentially designed to increase the basket of exportable products from Nigeria, other than crude oil, and improve the global competitiveness of Nigerian products as well.
Over the years, the scheme has been bedevilled with challenges leading to incessant suspension among others issues like non-payment of backlog to beneficiaries. However, I am delighted to inform you that the in the first half of the year the federal government approved the sum of N375 billion to clear the backlogs of claims for beneficiaries of the EEG scheme. As I speak with you, over 285 exporters are to benefit from the grant while the money will clear the backlogs from 2016 till date. Recently, we had an interface with Distinguished and Honourable members of the National Assembly where this grant/scheme was defended.
What is your vision for NEPC and what do you hope to achieve by the time you leave office?
My vision is to do all within my capacity to ensure that we no longer depend on oil as the major source of running our economy. The reason is simple. The non-oil sector has the capacity to guarantee job creation and wealth creation particularly for our teeming youths as well as contribute significantly to the nation’s Gross Domestic Product (GDP). Therefore, with the numerous projects and programmes we have conceived using the “Export4Survival campaign as a strategic engagement tool with key stakeholders in the sector, I am optimistic that the country will in the next 3 years record significant progress. Only recently, the NEPC Half Year Report shows 62.37 per cent increase in the volume and value of total exported goods from Nigeria.
On assumption of office, you launched the Export4Survival scheme. What is the key objection to the programme?
The Export4Survival” campaign is a strategic initiative to increase awareness of opportunities in the sector and the benefit of exporting Nigerian goods and services to the overall growth of the Country’s Gross Domestic Product |(GDP). Export4Survival is indeed a call for all Nigerians to realize the urgency of engaging in non-oil export trade as a viable means of economic growth, poverty alleviation, industrial development and boosting our foreign exchange earnings.
What is the council doing to boost the non-oil export sector?
Through numerous capacity-building programmes in the area of Good Agricultural Practices (GAP) packaging and provision of hybrid seedlings to farmers, just to mention a few, the Council has assisted exporters in addressing the issue of poor quality of Nigerian products. The NEPC is also a member of a special Technical Committee set up by the federal government to address the perennial rejections of Nigerian non-oil export products in Europe, the Americas and other parts of the world. That committee would work hard to make recommendations on ending the rejection of Nigeria’s products.
The “Go Global, Go Certification” project, one of the programmes of the Council also complements this initiative with a view to ending the rejection of Nigerian products. The aim is to secure appropriate international certifications for products of Nigerian origin. To make Nigerian products competitive in the global market, we also established three Export Trade Houses in Cairo, Egypt, Lome in Togo and Nairobi in Kenya respectively.
The major objective of the ETHs is targeted at increasing Nigeria’s international market share and growth, enhancing the visibility of Nigerian products as well as increasing foreign exchange inflow and creating employment for the teaming youths. Plans are underway to establish another ETH in South Africa and Dubai, United Arab Emirates (UAE) among others. This project is being executed under a Public-Private-Partnership (PPP) scheme.
Source: www.thisdaylive.com/index.php/2022/11/09/yakusak-infrastructural-deficiency-high-cost-of-funds-have-impaired-export-competitiveness/
In this exclusive interview with James Emejo, the Executive Director/Chief Executive, Nigerian Export Promotion Council (NEPC), Dr. Ezra Yakusak, discusses the challenges of the country’s non-oil export sector, and its contributions to the diversification agenda of the current administration. Among other things, he said the government’s strategy was to create an avenue to ease exports as well as make Made-in-Nigeria products globally competitive.
What is your impression of the non-oil export sector vis-a-vis the government’s diversification agenda?
Very good question. I must tell you that the key objective for establishing the NEPC in 1976 was borne out of the need to have an alternative source of foreign exchange earnings for the country through the export of Made-in-Nigeria products. Of course, over the years, successive governments have made deliberate trade policies and incentives that will significantly impact positively on the non-oil sector.
For example, we have the Export Expansion Grant (EEG) scheme among other incentives created to boost the volume and value of our exports. So, coming back to your question, the government have done very well especially if we juxtapose government support with current economic realities. For example, only last year, the Federal Government under the National Economic Sustainability Programme (NESP) released a N50 billion-grant to drive the diversification of the economy through non-oil exports. The grant as you know was also used to mitigate the negative effect of the COVID-19 pandemic on businesses, especially MSMEs.
Only recently, the Central Bank of Nigeria (CBN) launched the ‘’RT 200 ‘’ Foreign exchange programme which is an intervention programme targeted at generating $200 billion in Foreign Exchange (FX) earnings from Non-Oil Proceeds over the next three to five years.
To complement the efforts of the CBN in actualizing this objective, the NEPC has set up the Domestic Export Warehouse (DEW) and the Export Trade Houses (ETH) which are structures that will help reduce the cost of exporting our goods by strategically creating an avenue to ease exports and thereby make Made-in-Nigeria products competitive in the global market.
What exactly is the mandate of NEPC and how much of it has been realised?
The Council’s mandate is clear. Our vision is to make the world a marketplace for Nigerian non-oil goods and services while our mission is to spearhead the diversification of the Nigerian economy by expanding and increasing non-oil export for sustainable and inclusive economic growth.
Simply put, section 4 of the NEPC enabling Act empowered the Council with the special responsibility of promoting the development and diversification of Nigeria’s export trade and assisting in promoting the development of export-oriented industries in Nigeria, among others.
Since the Council was created 46 years ago, I must say that the NEPC has made significant progress in terms of building the capacity of exporters, creating awareness of the potential of the sector with a view to stimulating the interest of Nigerians to participate in export business and more importantly in driving activities in the sector through strategic export intervention programmes and projects. Some of these export intervention programmes and projects have significantly helped in increasing the basket of exportable products from Nigeria. So, in a nutshell, I can tell you that the Council is living up to its mandate.
What do you think are the major challenges of the non-oil export segment and how have you responded to these?
The challenges plaguing the sector are numerous. These challenges have over the years made our products less competitive in the international market despite our comparative advantage. Some of these challenges include but are not limited to infrastructural deficiency, such as incessant power outages, poor road networks to serve as a channel for distribution of goods and services, lack of access to affordable finance as well as logistics problems and poor quality and packaging of Made-in-Nigeria goods.
However, the NEPC in collaboration with key stakeholders and relevant Ministries, Departments and Agencies (MDAs) of government is working assiduously to address them. For example, through the ease of doing business initiative of the Presidential Enabling Business Environment Council (PEBEC) among other export intervention projects such as Export Trade Houses and the Domestic Export Warehouse, I am optimistic that these challenges will be reduced to the barest minimum.
According to data, the services sector is yet to record any values in terms of non-oil exports. What is the challenge and how is the council addressing this?
The impact of Trade in Services export globally cannot be over-emphasized. In 2021, global services exports were valued at $6 trillion, representing 5.9 per cent of world GDP and 22.6 per cent of total world trade in both goods and services. Indeed, the trade in services sector is critical to the diversification of the economy. It is for this reason that the NEPC and the Commonwealth Secretariat London partnered to produce reliable data on the export of professional services in Nigeria. Suffice it to say that there had been previous attempts to create awareness of the Trade-in-Service sector of the economy, including the creation of the National Strategy for Export of Professional Services in 2010 through the Commonwealth in 2016 which assisted Nigeria to develop a road map for the service sector.
However, our current focus of collaboration with the Commonwealth Secretariat is on data/statistics collection and management. This is critical to our export effort as it would fill the gaps in collecting or capturing data from relevant institutions in order to generate, analyse and use statistical information on Trade-in-Services in line with the global trend. For example, the creative industry and the recent massive investments in the tech-enabled start-up ecosystem to support our youths, all have the capacity to generate wealth and job opportunities for sustainable economic growth along the entire value chain. I believe with the right investment in the services sub-sector by relevant MDAs working with the private sector Nigeria will be able to maximize the opportunities globally.
No doubt, a lot of funds have gone into the Export Expansion Grant scheme, how effective is the scheme to date and what are the challenges and way forward?
The EEG, which is a post-shipment incentive is a way of supporting active exporters in increasing the volume, value and quality of their exports. It is essentially designed to increase the basket of exportable products from Nigeria, other than crude oil, and improve the global competitiveness of Nigerian products as well.
Over the years, the scheme has been bedevilled with challenges leading to incessant suspension among others issues like non-payment of backlog to beneficiaries. However, I am delighted to inform you that the in the first half of the year the federal government approved the sum of N375 billion to clear the backlogs of claims for beneficiaries of the EEG scheme. As I speak with you, over 285 exporters are to benefit from the grant while the money will clear the backlogs from 2016 till date. Recently, we had an interface with Distinguished and Honourable members of the National Assembly where this grant/scheme was defended.
What is your vision for NEPC and what do you hope to achieve by the time you leave office?
My vision is to do all within my capacity to ensure that we no longer depend on oil as the major source of running our economy. The reason is simple. The non-oil sector has the capacity to guarantee job creation and wealth creation particularly for our teeming youths as well as contribute significantly to the nation’s Gross Domestic Product (GDP). Therefore, with the numerous projects and programmes we have conceived using the “Export4Survival campaign as a strategic engagement tool with key stakeholders in the sector, I am optimistic that the country will in the next 3 years record significant progress. Only recently, the NEPC Half Year Report shows 62.37 per cent increase in the volume and value of total exported goods from Nigeria.
On assumption of office, you launched the Export4Survival scheme. What is the key objection to the programme?
The Export4Survival” campaign is a strategic initiative to increase awareness of opportunities in the sector and the benefit of exporting Nigerian goods and services to the overall growth of the Country’s Gross Domestic Product |(GDP). Export4Survival is indeed a call for all Nigerians to realize the urgency of engaging in non-oil export trade as a viable means of economic growth, poverty alleviation, industrial development and boosting our foreign exchange earnings.
What is the council doing to boost the non-oil export sector?
Through numerous capacity-building programmes in the area of Good Agricultural Practices (GAP) packaging and provision of hybrid seedlings to farmers, just to mention a few, the Council has assisted exporters in addressing the issue of poor quality of Nigerian products. The NEPC is also a member of a special Technical Committee set up by the federal government to address the perennial rejections of Nigerian non-oil export products in Europe, the Americas and other parts of the world. That committee would work hard to make recommendations on ending the rejection of Nigeria’s products.
The “Go Global, Go Certification” project, one of the programmes of the Council also complements this initiative with a view to ending the rejection of Nigerian products. The aim is to secure appropriate international certifications for products of Nigerian origin. To make Nigerian products competitive in the global market, we also established three Export Trade Houses in Cairo, Egypt, Lome in Togo and Nairobi in Kenya respectively.
The major objective of the ETHs is targeted at increasing Nigeria’s international market share and growth, enhancing the visibility of Nigerian products as well as increasing foreign exchange inflow and creating employment for the teaming youths. Plans are underway to establish another ETH in South Africa and Dubai, United Arab Emirates (UAE) among others. This project is being executed under a Public-Private-Partnership (PPP) scheme.
Source: www.thisdaylive.com/index.php/2022/11/09/yakusak-infrastructural-deficiency-high-cost-of-funds-have-impaired-export-competitiveness/
