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Stakeholders call on FG to end Apapa gridlock

By Charles Nwaoguji

Stakeholders in the export sector have called on the Federal Government to end  Apapa gridlock, as this has caused high cost of transportation and materials.
They said if the situation is not addressed, most of the industries will shut down and relocate to other West African countries.

According to the Group Chairman, Export Promotion Group, of the Manufacturers Association of Nigeria, Ede Dafinone, other familiar challenges of the sector such as high   cost of energy and funds, multiple levies and taxes, smuggling, also unleashed untold constraints on manufacturing operations.

Dafinone, who made the appeal at the second annual general meeting of the Manufacturing Association of Nigeria, Export Promotion Group (MANEG), also appreciated the Federal Government for the payment of the Export Expansion Grant (EEG) for the 2017 EEG application and further pleaded for the  payment of the balances to exporters.

He noted that recently,  the Federal Inland Revenue Service (FIRS) endorsed the use of  Export Credit Certificate as an instrument to settle taxes obligations, and appealed to other government institutions like NEXIM, AMCON to do likewise.

Also speaking on the occasion, President of AFREXIM, Prof Benedict Oramah, said the challenges facing Africa on the part to greater integration into the world economy are not only due to skewed nature of the composition  of its terms of trade, but also in the extroverted nature of its trade. He stated that inter-regional trade in Europe and developing Asia, which have been the leading drivers of globalisation, account for 67 and 55 per cent of total trade respectively, the performance in Africa is dismal where inter-regional trade accounts for only 16 per cent of total African trade.

” The AFCFTA, which has now come into force is expected to bring the share of intra-African trade to 22 per cent by 2022, up from the current level of 16 per cent and bring total intra- African trade to about  US$250 billion, from about US$160 billion currently. Since manufactures  account for about 60% of total intra-African trade, intra-regional trade in manufactures can rise to more than US$150 billion by 2022. Additionally, the AfCFTA is expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities, continental market access and better allocation of resource,” he said.

He stated that the AfCFTA holds phenomenal growth and export opportunities for Nigeria. Bringing together 55 countries and creating a market of 1.2billion people with a combined GDP of about US$2.5 trillion, adding that it opens the wider African market for Nigerian manufacturers and exporters.

He explained that “the preferential market access that the AFCFTA offers can make Nigerian manufactured goods more competitive in many African markets and can also make it possible for integration into regional and global supply chains. A cotton yarn producer in Nigeria can, for example become a supplier to a fabric manufacturer in Senegal, replacing yarn imports from Asia.”

Oramah said Nigeria can become a supplier of leather to the Moroccan or South African auto industry, replacing leather imports from Europe and South America. And as capacity is gained in the context of intra-regional trade, manufactures and exporters can expect to become competitive globally.

He added the informal traders have arisen to occupy the space created by the absence of formal trading companies that would have had the greatest positive impact on manufacturing as seen in south East Asia. It is export trading companies, such as Mitsubishi, Samsung etc, that helped South East Asian economies export success, by opening markets, creating brands, providing feedback to manufacturers for product improvement and facilitating access to financing. According to him, it is for this reason that Afreximbank launched an Export Trading Company (ETC) strategy in June this year.

He said MAN can create a platform for the emergence of member-owned Export Trading Company. He stressed that his bank, Afrexim plans to support such companies in various ways, including technical assistance, access to markets, equity investment and debt financing.

To facilitate the movement of goods, he said the bank can also avail an interstate transit guarantee to Nigeria exporters, reducing the cost associated with moving goods across borders. And because payments remain a binding contract in intra -African trade, “Afrexim has launched the Pan-African Payment Settlement System (PAPSS) that will facilitate the clearing and settlement of intra-African trade transaction in African currencies and reduce the foreign currency content of intra-African trade transaction in African trade.

PAPSS has been adopted by the African Union and Nigeria is among the piloting countries,” he said.

He also said the bank is also working to eliminate non-tariff barriers to trade by collaborating with the African Regional Standards Organisation (ARSO) to harmonise standards across the region. “While harmonising standards is important, it is equally important to create strong quality infrastructure to ensure that goods produced and exported comply with those standards and are of the highest quality.

This infrastructure is grossly inadequate in Nigeria and should be improved. That is why Afreximbank is developing an quality Assurance Centre in Ogun State, with plans to build forte in the North and Eastern parts of Nigeria.”

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