Exporters Brainstorm on Challenges of Business Environment
A Roundtable facilitated by Policy Development Facility has highlighted issues and challenges faced by exporters of agro commodities,making far reaching recommendations for regulators to become facilitators.
At the event held at Fraser Suites with government and non-governmental stakeholders in attendance ,the current business environment was roundly adjudged to be discouraging and unhelpful to the exporting community.
The full communique issued at the end of the event is published below:
“In 2017, Policy Development Facility Phase II began The “Exporter Experience (EE)” study series which is a key support to the Government of Nigeria through the secretariat of the Presidential Enabling Business Environment Council (PEBEC), the Enabling Business Environment Secretariat (EBES). The purpose of the study series is to support the business environment reforms initiated by the Government in July 2016.
“Encouraged by the contribution of the exporter experience study to the work of PEBEC, the PDF II organised a Policy Roundtable with the theme: Promotion of Transparency and Efficiency in The Business Environment. The dialogue was anchored on evidence-based issues resonating from a series of research studies and interactions with non-oil exporters, export oriented and trade facilitating agencies, requiring cohesive demand for co-ordinated policy response as it relates to the legal and regulatory frameworks as well as administrative and governance systems.
“The roundtable brought together export-oriented government agencies such as National Agricultural Quarantine Service (NAQS), Standards Organisation of Nigeria (SON), Central Bank of Nigeria (CBN), Nigerian Export Promotion Council (NEPC), Members of the National Assembly (NASS), National Agency for Food and Drug Administration (NAFDAC), Federal Airports Authority of Nigeria (FAAN) as well as private sector operators such as NICERT Limited and Members of the non-oil export communities of Practice (CoP) including other non-oil exporters to deliberate on the issues hampering the efficiency and transparency of the business environment while making actionable recommendations.
Observations and Key Recommendations
“After exhaustive deliberations on various thematic issues, the following observations and recommendations were made:
ELIMINATION OF DUPLICATE FUNCTIONS OF SOME EXPORT-ORIENTED AGENCIES AS THEY POSE AN OVERBEARING COST ON EXPORTERS
• Eliminate duplication efforts of Government Agencies as systemic redundancies are counterproductive to the good intentions and effort of the government in the implementation of the Ease-of-doing-business reforms.
• Harness the synergy between all regulatory authorities to make it easier for exporters to continue to conduct their business. For instance, the operationalisation of a single window – a one-stop shop for all imports, exports and transit procedures similar to the “Accounting and Corporate Regulatory Authority” of Singapore which takes less than an hour to register an entity and a maximum of 24 hours to receive response on status of approval of registration.
• The need for a legislative bill to address the issue of duplication of functions on the part of Government Regulatory Agencies.Action: The National Assembly, Presidency, NAQS, CBN, NEPC, NASS, NAFDAC, SON
INCREASE NATIONAL STRATEGIC SUPPORT TO GIVE NIGERIAN EXPORTERS SOME COMPARATIVE ADVANTAGE.
• There is need to identify some national priority sectors and provide some incentives needed for exports to thrive as done in Australia (for instance) that commands the third largest share of world trade with 34 different support programs for its exporters.
• Improve the presence of Nigeria representative(s) in international trade networks and strategic countries. Case in point being that Nigeria is the largest producers of yam worldwide while Ghana is the largest exporter of yam as a result of lack of strategic placement.
• Nigeria should promote the participation of its exporters in both regional and international trade fair exhibitions to showcase the prospects and potential of Nigeria.
• Provide incentives such as grants, funds, waivers etc to encourage the competitiveness of goods from Nigeria. For instance, freight charges are extremely high in Nigeria compared to Ghana and other African countries.
• Nigeria needs to protect its Geographical Indications (GI) to maximise its potentials in international markets. The absence of a GI system and protection mechanism of the intellectual property right of products of Nigerian origin has made it difficult to tap into the huge benefits that Nigeria’s GI products offer.
• The government must find a solution to the Apapa port gridlock as it constitutes a huge burden on exporters. Manual collection of duties at the ports is another hindrance which must be automated to cut all forms of sharp practices and ease avoidable delays currently experienced by exporters.
Action: Presidency, NASS, Ministry of Trade and Investment, Ministry of Foreign Affairs, NEPC, NAFDAC, Nigeria Customs Service (NCS)
FOSTER INTERNATIONAL PARTNERSHIPS THAT WILL FACILITATE THE ACCEPTANCE OF NIGERIAN EXPORT
• Nigeria needs to adopt Global GAP in its certification process to reduce the rejection of Nigerian exports in the international market as seen in neighbouring countries such as Ghana, Benin republic who have adopted many of such global standards and certifications.
• Regulatory agencies such as NAFDAC and SON should engage effectively with their international counterparts and secure partnerships with similar sister agencies abroad such that exports certified by NAFDAC can be allowed into the international markets and substandard goods not approved by NAFDAC specifications are prohibited from exiting Nigeria borders. For instance, there is no Nigerian food item on the Canadian Food Inspection Agency (CFIA) list in view of the increased migration of Nigerians to Canada and the attendant increase in demand for Nigerian foods.
Action: Presidency, NASS, Ministry of Trade and Investment, Ministry of Foreign Affairs, NEPC, NAFDAC, SON
NEED FOR INCREASED SENSITIZATION AND CAPACITY DEVELOPMENT OF BOTH REGULATORY AGENCIES AND EXPORT PRACTITIONERS
• Revamp of research institutes to foster innovation and capacity development on improved technologies as well as knowledge sharing on global trends, for instance high yielding crops in the agriculture sector where Nigeria has comparative advantage.
• Exporters must adhere to the newly updated EU market regulations which came into force on the 14th of December 2019 and beware of prohibited chemicals like glycosides in plant and plant products as contained in the new regulation.
• NAQS and other relevant agencies should support farmers with trainings on professional application of chemicals as it is difficult to manage weeds on farmland without the use of chemicals.
• Self-regulation is necessary across the export value chain especially among Export/Trade associations and groups to further forestall the rejection of Nigerian exports in the international market.
• NAFDAC, NAQS, SON and other standard upholding agencies should reel out relevant and detailed information such as factsheets of international standards and specification of the various categories of exports to reduce the information gap as well as incidence of rejection of Nigerian exports.
Action: Ministry of Trade and Investment, NEPC, NAQS, NAFDAC, SON
GOVERNMENT TO RECOGNISE AND STRENGTHEN ORGANISED EXPORT GROUPS TO CONSTRUCTIVELY INFLUENCE POLICIES THAT PROMOTE EFFICIENCY AND TRANSPARENCY
• The NEPC must work together with the export-oriented Communities of Practice to advise, proffer solutions, provide feedback and escalate sharp and harmful trade practices to the former when necessary. For instance, NEPC should register and recognise the Nigerian Coalition of Non-oil exporters being facilitated by PDF II which seeks to strengthen the voices of non-oil exporters and increase their participation in formulation and implementation of trade policies.
COMMITMENTS MADE DURING THE DIALOGUE
• CBN to facilitate access to the N500bn ear-marked for non-oil exports in specific sectors such as agriculture since 2015. Interested and qualified export practitioners will be intimated on the modalities and strategies needed to access the funds being housed in CBN.
• The leaders of the Non-oil Export Community of Practice to meet with CBN Trade & Exchange department on accessing the export development fund for its members.
• House Committee Chair on Trade and Commerce to facilitate legislative support needed to promote non-oil exports such as the Export Expansion Grant (EEG). The chair also indicated interest in the study commissioned by PDF II on the effectiveness of the EEG and the ease of accessing the funds.
• NEPC encouraged non-oil exporters who are already captured on the NEPC system and have verified documents to approach the office for the EEG grant.
• SON pledged to improved their processes including payment and inspection. For instance, there is a 30-60-day lag between receipt of payment from clients and inspection of facility by SON. SON pledged that being a reform-minded institution evident by its 3rd position in PEBEC MDA reform ranking, will take the feedback obtained from the event to further improve their processes.
The participants expressed their satisfaction at the Roundtable discussions and made a commitment to adopt the recommendations and improve on the identified gaps.
Exporters should conduct their due diligence on interested areas of export before venturing into the market space.
There is need for stakeholders to engage government more frequently on pro-export policies.