Nduka Udeh is the Managing Director of Simplified Corporate Logistics. In this interview, he discusses issues bedeviling non-oil export business in the country and proffers solutions. Excerpts:
How will you describe the export business in the country?
The business environment has come to realise the importance of nonoil export to the economy. I believe the sector will grow rapidly. However, no sector can grow appropriately without the right government policies and enabling environment.
When you’re filling your Form ‘M’ for imports, the manufacturing company is mandated to charge for cost and freight. What then happens is that the freight for that good is given to a foreign company and by so doing, we’re losing money. Why can’t we have a policy that ensures that the freight is handled by Nigerian businesses?
That way, Nigeria logistic companies will grow. There is no reason Nigeria shouldn’t have a lo- ‘Nigeria’s loss on exports too massive’ cal cargo airline or ocean liners if you consider the volume of our imports. Toyota alone brings in many millions of cars into Nigeria every year; all of it is being shipped into the country by foreign liners.
What are the challenges confronting the non-oil export business?
The biggest challenge that non-oil export business face and which most small businesses face is the multiplicity of agencies. When we started this business, I told my team to go out and collate a breakdown of how export business is done. With what they came back with, you’d think you were trying to send rocket to space; the process had so many layers.
Sometimes, you find out that some of the agencies that are supposed to inspect the goods Udeh before they are exported do not have functional website, you go to their websites and some of the addresses on their websites are not where they are.
Getting the Export Proceed Form is also another challenge. Intending exporter will go to several banks’ branches and they will tell them that they have no clue where to get the form. When they go all over the place and couldn’t get the form, they give up.
The Nigerian Export Processing Council deserve some praise. It is doing a lot in the area of trainings for intending exporters but they’re not the only agency involved in the export chain. As a matter of fact, there is poor coordination among the other agencies involved with export business.
How can the processes be simplified?
Government is the only one that can simplify it. They need to bring all the agencies together. I believe there should be a centralised export agency that handles everything that has to do with export. It is possible for all the agencies to be in one centralised location, so that if for example I am an exporter of yam, if I take my yam to this centralised location, preferably near the port, where the various agencies that I need to deal with can be found, then I’m better off.
While there, I meet the NEPC and get the required forms; I meet the Customs and get the required forms. I meet NAFDAC that has to check and I get the required forms. Standard Organisation of Nigeria is also there.
So, there is need to get all the agencies in one centralised place and have a coordinating body to handle the whole export processes so that if I take my goods there it is done in one place and by one body.
But Nigeria’s vastness may frustrate such model.
Cuts in… Use the Chinese model. When the Chinese wanted to position Huawei as a leader in the telecoms industry, they came out with a policy that no Huawei goods should be at the ports for more than 24 hours. The policy ensures that they must have their export clearance within 24 hours. So when companies were negotiating for deals, and a Siemens tells you that it will take a month for your goods to arrive, in a week or thereabout, Huawei has delivered the same goods. That is the kind of process that we need to put in place to grow our non-oil export and truly diversify the economy, away from over-dependence on oil.
What is the country losing to this menace?
It is difficult to quantify because I don’t have the data and government doesn’t have the figure either; but it is massive. One of my friends is the biggest seller of African foods in Houston, Texas, and has chains of African food outlets. Sometimes ago, he tried to export yams to the United States; it took him more than three weeks to get all the documentations done. All along, the yams were in the container and by the time they got to Houston, half of the yams were rotten. What he does now is to go to Ghana. There, in two days, the documentations are ready and he exports. That’s how lack of coordination among our agencies is killing export business.
Government is talking about diversifying the economy, emphasising on growing non-oil export. How well is your sector keying into that vision?
Logistics is key to every business. But a lot needs to be done before export can thrive; we need good road infrastructure, we need to have storage system in some of these locations to at least store the products before they’re shipped out to the various local and international markets. I read an article about a village in Imo State where they harvest plantain but a lot of it rots away because the roads from the farms in the village to the markets are not good.
Government needs to work with the private sector and when I say private sector, I don’t mean the multinationals, the billion naira companies that have the capacity to take care of these challenges from A-Z. Government should engage operators of small and medium-scale businesses. In any economy, those that grow the economy are the small and mediumsize companies, if you look at the distribution of labour in the economy, you have more of them; those are the people that government needs to consult. So logistics play a major role in boosting non-oil export because, if you have the goods and cannot get it out to the markets in good time, it becomes a waste.
there should be a centralised export agency that handles everything that has to do with export
How can the country harness its vast potential in the agriculture and agroprocessing value-chain in return for foreign earnings?
The way forward requires that a lot of agencies need to work together, including Bank of Industry. Cote D’Ivoire is one of the world highest producers of Cocoa. They earn about $3 billion yearly from cocoa export; they sell it to some of the companies that make chocolate, the companies convert it into chocolate and ship it back to Africa selling it at profit. The three biggest chocolate companies, combined together, made about $35 billion from exports worth less than $6 billion.
The learning here is that if we’re serious about export we need to move away from just exporting the raw materials to having some small industries that will pre-process some of these items for more money. It makes no sense for me to export raw yam when I could process it into other items like yam flower and earn more proceeds. There is a huge demand in Africa that Nigeria should actually fill. There is no reason for Mars to be exporting chocolate into the African sub-region. Nigeria should actually take the lead in that area. We’re doing pretty well in cocoa export; we’re actually doing about $800 million in cocoa export, but if we process that raw cocoa into processed chocolate we could be making about $4 billion yearly. That is where agencies like Bank of Industry has a role to play by funding these industries and reduce the amount that the industries need to pay to access funding.
