Importers' Forex Challenge: A Blessing in Disguise?

It is a common saying that opportunities go around in overall called work. This statement best describes the current foreign exchange challenge of a lot of importers in the country. The policy of the government on foreign exchange which led to the closure of the Windows for sales (Retail and Wholesale Dutch Auction System), listing of some imported items as being non-valid for foreign exchange and rationing of the weekly sales to importers through the various banks have brought untold hardship on the business of many importers in Nigeria.

For the import businesses, who are currently undergoing a lot of stress because of the high cost of forex and inadequate forex, here is my suggestion, you can save your business from this financial bleeding and disappointment of your suppliers abroad by simply setting up a special purpose vehicle in your organisation for the purpose of exportation. This challenge therefore creates a unique opportunity for importers to start a new line of business and thereby increasing the revenue base of their businesses.

It is interesting to note that an importer can become a supplier of raw material to his suppliers (who is a manufacturer). An importer who imports batteries from a manufacturers can in turn exports waste battery cells and lead ores to them. Those importing chocolate and confectionery can in turn export cocoa beans to the manufacturer. If the item being imported is sugar, the importer can in turn export sugarcane to the manufacturers. If the importer is into the importation of juice concentrates from the manufacturers, he can in turn begin to export fruits to them.

This current challenge can therefore be use as a leverage and motivating factor importers to invest in export business and thus create their own foreign exchange. The forex from the export proceeds can then be used to fund their importation businesses. As a matter of fact, it is a lot easier for an importer to simply flip over his operation and begins to export. This is because, the importer already understands international trade documentations, port operations, payment methods, risks involved international trade to mention a few. All that the importer now need is to have a proper understanding and handling of the 5Ps (Products, Pricing, Purchasers, Payment & Paperwork) which are very critical to non-oil export business success. The details of the 5Ps will be discussed in detail in the subsequent editions of the Export Digest within the current quarter.

Most of the importers in Nigeria can be broad categorised into 3 groups based on their core businesses. These include Manufacturers, Engineers and Traders. Each of these groups have unique features that make them to be perfectly suited to operate in the 3 sub-sectors of non-oil export businesses in Nigeria. These include Semi processed or finished goods, Solid Minerals and Agricultural commodities. This is not to say that each of the 3 groups of importers cannot operate in all the non-oil sub-sector, what I am saying is that, they would most likely perform better and grow faster if they operate within the sub-sector where they already have some strength.

For very obvious reasons, I will like to recommend that importers who are also into Manufacturing should first consider entering the export business through the sales of their products (processed or finished goods) abroad. This is because they are already used to value addition and the challenges of manufacturers in Nigeria. They could start by first exploring the possibility of exporting their current products to West Africa, other parts of Africa or other countries around the world especially where a lot of Nigerians reside like the United Kingdom and the United States of America.

On the other hand, any engineering company that imports into Nigeria (especially those into civil engineering) should first consider mining solid minerals and then exporting them. This is due to the fact that they already have a number of equipment that will be of great use to them in the mining, processing and exportation of solid minerals like lead ore, zinc ore, copper and manganese ore out of Nigeria.

In the same vein, all the traders importing items into Nigeria simply for sales should see the exportation of agricultural commodities as the first option to be considered as they venture into export business in Nigeria to generate their forex. This is because they neither have any equipment needed for the manufacturing of any product nor do they have any machinery for mining of solid minerals.

On a final note, I will like to submit that, the current challenges of forex in Nigeria is indeed a great blessing in disguise for all affected importers. This is because, it is forcing smart ones to start export businesses in order to create their own forex, create more jobs, generate more income and stay competitive in the same import business.

For questions on this thought, you can reach me via email to bayemibo@3timpex.com

Export Rubber, Cocoa, Palm Oil to us, EU tells Nigeria

The European Union (EU), has urged Nigeria Government to increase export of agricultural produces like rubber, cocoa and palm oil to the EU countries.

The Head of EU Delegation to Nigeria and ECOWAS, Mr Michel Arrion, stated this at a press conference on commemorate the 40 years of EU-Nigeria partnership on Wednesday, in Abuja. Arrion said there were potential exports, which Nigeria could develop in commercial quantities for export, lamenting that such exports to the EU were currently in low quantities.

COCOA “There are potential exports like rubber for instance for tiles that you could certainly develop. We will be delighted to import and to buy more rubber from Nigeria; the problem is that the production is very small. We will be delighted to buy more cocoa from Nigeria. We are buying most of our cocoa from Ivory Coast and Ghana, while not from Nigeria?” he said. He challenged Nigeria to think of what it could produce in addition to its own consumption adding, Nigeria must meet its local demands before exporting.

He explained that Nigeria has a lot of possibilities in agricultural products but that it would take several years to really have an export-oriented commercial farming policy. He also said that there was the need for the price of Nigerian products to be competitive. “You (Nigeria) have to be competitive, I mentioned palm oil; I see a potential market for palm oil exportation from Nigeria to EU if the prices are competitive. “Today, they are not. Malaysia for instance, offers more competitive price, so Nigeria has also to work on the competitiveness of the country’s products.

He said there were several factors that contributed to competitiveness which included the costs of production, labour, land and energy, among others. “When your refineries of palm oil have to produce their own energy instead of being connected to the grid, you are less competitive than others,”he said. Arrion added that the competitiveness of Nigeria products is also being affected because the rate of exchange of naira vis-a-vis the dollar or euro is not reflecting the reality of the situation.

Read more at: http://www.vanguardngr.com/2016/05/export-rubber-cocoa-palm-oil-us-eu-tells-nigeria/

SON, EU Collaborate To Standardise Nigerian Produce For Export ‎

The Standards Organisation of Nigeria (SON) and the European Union (EU) have begun an initiative to establish a code of practice for Nigerian Agricultural products for exportation.

The information is contained in a statement jointly signed by Mrs Chinyere Egwuonwu, Deputy Director, Standards Directorate, SON, and Mrs Irina Kireeva of EU.

The statement said that as part of efforts to achieve the goal, the organisations had concluded plans for a final national training on standards on code of practices for the products.

The theme of the training, scheduled to hold in Abuja on Thursday, is ‘” Standard and Quality: unleashing the potential of Agricultural products to grow the Non-oil export in Nigeria.”

The training will focus on products, such as cocoa, beans, Shea butter and melon, the statement said.

It added that the event would unveil the result of training facilitated by the organisations focusing on exports on key agricultural commodities.

The statement noted that the workshop would equip participants with the technicalities of the export market with regard to the issues of development of standards and the engagement of private sector.

It said the workshop was critical for transforming agriculture in Nigeria and would help participants understand that Africa could feed itself through agriculture and export.

The statement said the training would lead to adopting modernised and commercial agriculture which was the key to transforming the country’s economy.

The training is to be organised by African Caribbean and Pacific Countries from the EU’s Technical Barriers to Trade, the statement said. (NAN)

http://leadership.ng/business/519556/son-eu-collaborate-standardise-nigerian-produce-export

Customs Impounds 23 Containers Of Prohibited Timber

The Apapa Area Command of the Nigeria Customs Service (NCS) yesterday said it impounded 23 container-load of prohibited export-bound timber at the Apapa port. The Area Controller of the command, Comptroller Willy Egbudin announced this at a forum organised by the command for timber exporters in Lagos. 

Egbudin said the containers were impounded because they loaded raw timber, pointing out that the law demanded that all timber meant for export must either be processed or semi-processed. He said that some arrests had been made, adding that the suspects would be prosecuted. ``We made these seizures because the timber are raw and so fall into the categories of wood or timber that the government has prohibited for export. ``The law demands that any timber meant for export must either be processed or semi-processed; by that some value would have been added to it. ``Some of those behind the illegality have been arrested and I tell you, they would be prosecuted,’’ Egbudin said. 

The controller said there were efforts to encourage exportation of timber to earn foreign exchange. He, however, urged timber exporters not to undermine government’s good intention by circumventing the law. Egbudin advised the exporters to comply with all procedures and laws regarding exportation of timber in their own interest, as well as the country. ``The Apapa command will continue to do all it could to facilitate export trade. ``The command will also continue to enlighten exporters to ensure that they do their business right. ``We will continue to engage exporters and listen to them to ensure that there is understanding,’’ he added.

A timber exporter; Mr Joseph Odiase thanked the command for the forum, but urged it to simplify the process of documentation for export. Odiase said they were having difficulty in getting their documents processed, noting that this was a disincentive to them.

http://shippingposition.com.ng/main-news/eu-to-donate-20m-euros-to-nimasa-for-maritime-security

NCS Warns Exporters, Importers on Prohibited Items

The Nigeria Customs Service (NCS) has warned exporters and importers of prohibited items to desist from doing so, warning that the long arm of the law will soon catch up with perpetrators.

The Customs Area Controller (CAC), NCS, Tin Can Island Port (TCIP), Apapa, Command, Comptroller Yusuf Bashar issued the warning in Lagos while addressing stakeholders.

The federal government periodically compiles list of items that cannot be exported or imported into the country. The items which are reviewed annually are in two categories, namely the Import Prohibition List (IPL) and the Export Prohibition List (EPL). Their review is based on the federal government fiscal policies as contained in its annual budget and is enforced by the Customs High Command.

The enforcement of the IPL and EPL is in line with the statutory functions of NCS, namely revenue generation, trade facilitation and anti-smuggling.

However, speaking at a stakeholder forum,   Bashar warned that only semi-treated and fully processed wood products will be allowed through its command as export, even as he added that anything short of what the law permits, will be confiscated.

The stakeholders meeting was meant to sensitize the trading public particularly exporters on the need to ensure that only exportable wood products are brought in to the port.

The CAC also said that the command had to bring in officials of the Federal Environment Protection Agency (FEPA) to assist NCS in explaining and showing to exporters difference between treated and untreated wood products.

He explained that exports do not attract any duty even as he pointed out that in the light of falling oil price, the government is trying to encourage Nigerians to export as much as they can with a view to repatriating foreign currencies back home.

His words: “It is an incentive to encourage export because it is assumed that money will come to government based on exportable products from Nigeria most especially now that Nigeria is having issue with crude oil. Price per barrel is going down. It is our major foreign exchange earner so Nigerians must be encouraged to export as much lawful products as possible.

“At a point, we asked ourselves how we can encourage exports from our end. We thought that the best way to do that was to sensitize the people and tell what exports are allowed by law. We took wood products as the first item amongst exportable products because it attracts a lot of attention.

The need for the campaign became imperative due to the seeming confusion emanating from the export of wood products as almost every container with wood export despite the status, is considered contraband by the uninformed”.

According to the CAC, we met exporters of wood products, freight forwarders of wood exporters, our own Customs personnel and any interested members of the public and let them know the categories of wood that are lawfully exportable.

He explained that other government agencies that approved such exports were also invited to tell exporters what is called processed and semi- processed woods.

The Customs chief argued that the more there is communication, the higher the compliance level, just as he declared: “unprocessed wood is banned from export”.

To ensure that the trading public knows the difference in the categories of wood for export, samples of processed, semi processed and unprocessed wood products were shown to exporters.

Bashar warned that he would not want to see unprocessed wood products in his command, even as he explained that he will ensure that the four policy thrust of NCS management will be implemented to the letter.

According to him, NCS must facilitate trade as much as possible so as to make the ports attractive. Ignorance of the law by port users has been the most challenging task I face since my assumption of duty as the new CAC.

http://businessnews.com.ng/2016/02/06/ncs-warns-exporters-importers-on-prohibited-items/

Customs Warns Against Export of Untreated Wood Products

ONLY semi-treated and fully processed wood products will be allowed through Tin-Can Command for export, the Customs Area Comptroller, Yusuf Bashar has said.

Speaking with stakeholders in Lagos,  Bashar explained that it had to sensitize the trading public particularly exporters on the need to ensure that only exportable wood products are brought in to the port, noting that anything short of what the law permits, will be confiscated.

A statement quoted Bashar as saying the command had to bring in officials of the Federal Environment Protection Agency, (FEPA) to assist the Customs in explaining and showing to exporters difference between treated and untreated wood products.

He explained that exports do not attract any duty, adding that in the light of falling oil price, the government is trying to encourage Nigerians to export as much as they can with a view to repatriating foreign currencies back home.

Explaining further, he said: “It is an incentive to encourage export because it is assumed that money will come to government based on exportable products from Nigeria most especially now that Nigeria is having issue with crude oil”.

He added: “Price per barrel is going down, it is our major foreign exchange earner. So, Nigerians must be encouraged to export as much lawful products as possible.

“At a point, we asked ourselves how we can encourage exports from our end, we thought that the best way to do that was to sensitize the people and tell what exports are allowed by law.

“We took wood products as the first item amongst exportable products because it attracts a lot of attention.

“The need for the campaign became imperative due to the seeming confusion emanating from the export of wood products as almost every container with wood export despite the status, is considered contraband by the uniformed.

“So, we met exporters of wood products, freight forwarders of wood exporters, our own Customs personnel and any interested members of the public and let them know the categories of wood that are lawfully exportable”, he said

According to Bashar, other government agencies that approved such exports were also invited to tell exporters what is called processed and semi processed woods.

http://guardian.ng/business-services/customs-warns-against-export-of-untreated-wood-products/