Just like any other nation in the world, Nigeria
has a list of prohibited items for exportation. According to the list on
website of the Nigeria Custom services, the items prohibited for export include
the following: Maize, Timber
(rough or sawn), Raw hides and skin (including Wet Blue and all unfinished leather), Scrap Metals, Unprocessed rubber
latex and rubber lump, Artefacts and Antiquities, Wildlife animals classified as endangered
species and their products e.g. Crocodile; Elephant,
Lizard, Eagle, Monkey, Zebra, Lion and All goods imported.
The reason for the prohibition of most of the
products are very reasonable but for one and that is imported items. I strongly
believe that we need to review our trade policies in order to make Nigeria a
major trade hub in the sub Sahara African countries. The probation of maize is
good because we are not producing enough to meet the local demands. The
prohibition of timber export is necessary in order to reduce the impact of
climate change on our environment. Raw hides and skin prohibition is also okay
in order to first reduce the rate of killing the animals and also create jobs
via the value added to them before export. Scrap metals need to be prohibited
for export because they are greatly needed by our foundries as raw materials in
order to revive the sector (which is going comatose already). Same goes for rubber
latex whose processing is not so sophisticated and adding value to it before
export leads to the creation of more jobs. The Artefacts and Antiquities are
necessary prohibition in order to preserve our heritage while the animals
categorised as endangered species need to be prohibited in order to prevent
them from going into extinction.
The item on that prohibition list that does not
have any reason to be there is the prohibition of imported item for
exportation. I know that every policy is driven by a philosophy, what I still
do not understand is the philosophy behind this policy. Whatever reason that
the government might have which is often related to reducing the rate of import
into the country and thus reducing the consumption of foreign exchange is no
more valid. As a matter of fact, these imported items regularly find their ways
out of the countries into the countries West African subregion and beyond via
various illegal means and routes. By changing this policy, Nigeria can become a
major trading hub for West and Central African countries just like like United Arab Emirates (UAE),
United Kingdom (UK) etc who are major trading hubs in their regions. They
import a number of items into their countries and these same products are
exported out to the countries within their regions. This practice has not
collapsed their economy but rather, it has helped them immense economic
benefits that I will highlighting in the latter part of this article.
The data obtained from globalEDGE™ (is a knowledge web-portal of the Michigan State University) revealed that in 2015, some of the
top 10 items imported and exported in the UAE involved the same products. For examples, the UAE
imported $45.2B and exported $40.5B of Precious stones and metals, imported $21B and exported $7.9B of industrial
machinery, imported $19.1B and exported $8.9B of motor vehicles and parts, imported $3.8B and $3.5B exported
plastics, imported $3.5B and exported $2.0B iron and steel, imported $18.3B and exported $8.0B electrical
machinery. Most of the top 10 export destinations of this country are within
its region in the middle east and these include Iran, Saudi Arabia, Iraq, Oman,
Kuwait and Qatar. This same scenario play out also in the case of United
Kingdom whose top 10 items of import (like precious stones and metals,
electrical machinery, industrial machinery, motor vehicles and parts, plastics,
pharmaceuticals, precision instruments and minerals and oil) are also exported
to its top 10 export destination in Europe and these include countries like
Germany, France, Netherlands, Ireland, Belgium, Italy, Switzerland and Spain.
In the same manner and in the interest of
sustainable growth in this economy, Nigerians should be allowed to import
items, which are neither on the import prohibition list of the Nigeria Customs
Service nor in the list of items not valid for foreign exchange as stipulated
by the Central Bank of Nigeria, and export the same to our neighbours in the
West African subregion and other land locked countries on the continent. This practice,
as seen in other countries, has shown the possibility of increasing the revenue
of the government via the payment
duties and taxes associated with importation. This will
also lead to increased employment opportunities that are associated with the
increase in trading activities. Legalising the exportation of imported goods
will consequently increase the formal trade with West Africa countries and
hence the availability of valid data for proper planning. Since the Exporters
will now have to open NXP for their export trade, they will also be compelled
to repatriate the funds which will in turn increase foreign exchange earnings
of the nation.
In conclusion, I will like to recommend that the
Federal Ministry of Finance do a critical review of the policy prohibiting the
exportation of imported goods in Nigeria with a view to changing this policy.
The presidency should also setup an inter-ministerial committee that comprises
of the Ministry of Finance , Ministry of Trade and Investment, the Central Bank of Nigeria together with other relevant stakeholders to jointly issue a
guideline that will make this initiative a sustainable one. This guideline
should contain a prohibition list that mainly include items that are currently
being produced in Nigeria and exported to various African countries.
I am very sure that if the
points raised in this article are well noted and the various suggestions acted
upon, we will not just begin to see a reasonable increase in the volume and
values of non-oil exportation out of Nigeria, but also the humongous economic
benefits that comes with such policy as demonstrated in other parts of the
world.
Bamidele Ayemibo
bayemibo@3timpex.com
