It is interesting to note that while the total non-oil export volume
from Nigeria in 2016 was less than $2 million, the total value of crude oil sold by Nigeria
between January and December 2016 dropped by $6.7 billion from $40.5 billion in
2015 to $33.8 billion; a comparative analysis of official crude oil lifting
values published by the Nigerian National Petroleum Corporation (NNPC). In my opinion, the reason why the non-oil export volume has been at
the low level is simply because there are no supporting drivers in the economy.
I discovered the drivers’ gap could really
help us increase awareness and encourage a lot of businesses to go into non-oil
export business in recent times, when we had shortage of foreign exchange due
to the drop in the price and sales of our crude oil. Guess who these drivers
are, the Commercial Banks!
As the price and sales of oil began to decline and the foreign
exchange availability became a mirage, the commercial banks, in the bid to
survive and stay afloat, despite the economic recession became suddenly very
creative in the drive to generate foreign exchange. They started by training
their staff in different areas of export, they set up export desk to take
enquiries on exportation, they began to work on export Finance product
programmes, they organised Export sensitisation workshop across the country and
put together so many more plans and strategies to grow their export customer
base. Little did we know that all these were gear towards generate foreign
exchange in order to fund their Import transaction, thereby growing their
income for business survival and not because they really want to contribute to
the growth of the non-oil export sector of the economy.
This position of mine has been vindicated now that the foreign
exchange has started flowing in a fairly reasonable manner from the CBN. You
know what has happened now, most of the commercial banks has reverted back to
their default mode of allowing export to be on auto pilot without a driver and
concentrating on what brings in the cash- Importation business. Where are the
export training for staff? Where are the export sensitisation seminars? Where
are the export vibrant desks? Where are the product papers for export financing?
Where are all the great and very creative export growth initiatives? They have
all gone into oblivion in most of the banks. How I wish the drive and passion
of the Nigerian banks for exportation had continued, we would have been far
ahead now and even very close to the desired breakthrough in this sector.
In order to bring the banks back to continue their drives towards
export growth, here are my suggestions. I think the CBN should come up with a
foreign exchange allocation mechanism, which allows any bank to get a
percentage foreign exchange allocation (that CBN wants to sell per time) that
is equivalent to the percentage of the export proceeds received in that banks,
based on the exportation done by its customers. For example, if bank A received
an export proceeds that amount to 10% of the industry total in the month of
January, such a bank should receive only 10% of the foreign exchange allocation
to be sold by CBN in the month of February.
I expect some bankers to kick against this now because some banks
seem to have larger share of the export proceeds inflow because they have more
exporters, to solve this the CBN can give a notice of 3months to all the banks
ahead of commencement of this policy. This is to enable the banks who currently
have low export proceeds to put together their strategies, grow the capacity of
their staff and begin the execution of their plans to increase their export
customers base.
I know that some bankers reading this now might be saying that the
Exporters do not declare the details of their export businesses by avoiding the
filling of NXP in their pre-export documentation and some might even say that
CBN is the one discouraging them by sanctioning them for the offence of non-repatriations
of export proceeds committed by the exporters. These are valid concerns and
here are my responses to these issues. First, I will like to say that the two
major initiatives of CBN which include the Investor Exporters window (that
enables exporters to sell their export proceeds at a better rate) and the
directive that now ensures that all Bill of lading carry the NXP number (so as
to ensure that no exporter is able to ship goods out of the country through the
seaport without the requisite pre-export documentation) have both solve the
problems and remove the fear of the Nigerian banks regarding exporters who
avoid documentations done through them. On the other issue of non-repatriation
of export proceeds, I will like to recommend that CBN rescind the regulation
that says that the commercial bank will be sanctioned for non-repatriation of
export proceeds (at least for all, the previous exportation done through them)
since, the two new regulations should be able to reasonably cub these
practices. The CBN should simply inform the commercial banks to decline any
request for further exportation from any company that is into such practices.
The BVN number of the signatories to such a company's account can be used to by
the bank to trace such customers.
Finally, it will also be of immense importance to state that the CBN
should take the front row in this drive by making good her promise to grow the
sector through the approval and release of the Export Stimulation Funds
requests that are currently pending before the Governor of the Apex Bank.
If indeed we really desire to grow the non-oil export sector in this
country, we should not allow it to be on autopilot again, we need to engage
drivers who will be committed to championing the course because of what is it for
them.
Bamidele Ayemibo
bayemibo@3timpex.com
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