The Fidelity SME Forum is a weekly radio programme organized by Fidelity Bank Plc., to educate, inform, advise and inspire budding entrepreneurs in Nigeria with knowledge and expertise that will enable them build sustainable and successful businesses. The interactive radio programme features Subject Matter Experts and Model Entrepreneurs as guests on a weekly basis to share their insights and unique success stories. In this interview, Mr. Olusegun Awolowo CEO, Nigerian Export Promotions Council (NEPC), shared his thoughts on the ‘Practical Guides to Empowering Nigerian SMEs for Export Trade Competitiveness’.
Q:With the current FX crisis, the dwindling revenue from Dollar and export seems to be the magic bullet, what is the NEPC’s mandate and how are you focused on helping SMEs in this time?
A:The Nigerian Export Promotions Council (NEPC) is the apex agency mandated by government to drive and promote non-oil exports. Non-oil meaning everything else but oil. Even when oil is processed for export, it is categorised as ‘non-oil’. We are in charge of taking it out of the country. Our vision is to make the world a market place for Nigerian non-oil products. Our mission is to spearhead the diversification of Nigeria’s monolithic economy by expanding and increasing non-oil exports for sustainable and inclusive growth.
The strategic objective of the council is to diversify the productive base of the Nigerian economy away from oil and foster a market-oriented, private sector driven economy. None of these can happen without strengthening Nigerian SMEs. Globally, SMEs play significant roles in the growth, development and industrialisation of many economies. There is a saying that goes like this: “It’s not the government that creates jobs, it is small businesses.” SMEs are the key drivers of social economic growth and we really need SMEs to work for us.
Q:Can you share with us a few of the initiatives you have launched to support SMEs?
A:SMEs are critical to us. But interestingly, women represent a powerful source of economic growth and opportunity. Women entrepreneurs in Nigeria are producing many of our products; shea butter, ginger, cashew and so on. I was in Ilorin recently to flag-off the annual cashew festival and we had a room full of female farmers who came to us excited about the prospects of cashew. Unfortunately, we had been looking at only the oil figures which has become the bane of Nigeria’s economic growth. We have been looking at dwindling oil figures, but we have not been looking at other areas to generate revenue. On the flip side, cocoa prices have continued to climb up over the last 5 years.
For cashew as well, prices have maintained an upward trajectory. A female farmer was telling me how excited she was about the N800 profit on a little thing, but now the prices have gone up and she is making up to N1,600. These are the little things that tell you that there is hope for this country even as we move away from depending solely on oil for revenues. A good example of helping SMEs as part of what we do is we take SMEs mostly… We are participating in Ghana’s international trade fair. We paid for the pavilion and take their goods all the way there. We also provide a rebate ticket for them as well. Pretty much, the bigger companies are covered, so they can get there on their own.
Apart from that, we do a lot of capacity building for small businesses because Nigeria’s manufacturing industry is not export-orientated at all. Perhaps, owing to our huge consumer base, we don’t really look at export. So, we need to change their perception and get them export ready. Export-ready means that you need to meet standards. For instance, your packaging has to be up to it and particularly, your labeling. We’re doing a lot of work and training for SMEs. We have initiatives like the Zero to Export Programme, Women in Export. These are all the things we are doing to get them to be export ready.
Q:There are some SMEs that have products that they feel are export ready, but they don’t know how to go about finding the right customer base abroad. What does the NEPC do to create those linkages?
A:We are constantly looking for international markets. We are looking for countries that are interested in our products. I was looking at the Cobalt Report recently and it was telling me of Mila Seeds. We just started exporting Mila Seeds to Korea. But, what are Mila Seeds? It’s a byproduct of sugar-cane. That is very interesting for us. Constantly, when we discover such products, we put our exporters in the know. They can see it on our website and they can see what is trending and what they can export. As a result of the crash in oil prices, there are a lot of young business men looking for what they can do.
You don’t just get up and go. We have moved on from the days of suitcase exporters. Nigerian needs to grow more SMEs in this regard. We have international offices and under our new strategic framework now, we have revised where we are going to have our offices. it is linked to our strategy and it is linked to the needs; the countries with huge capacity to absorb Nigerian products, whose economy is relatively doing well. We are going to work with our Ministry of Foreign Affairs through the trade desk here and get proper offices in those locations to enable us to penetrate the market. That is what we do.
We look for those markets and we come back to form a synergy and we link our exporters with our market. We take them for exhibitions and trade fairs. For example, in America, we found out that we had been attending trade fairs and exhibitions, but not buyers’ fairs. Now, the buyers’ fairs are important because that’s where the buyers actually go.
Q:A lot of SMEs also complain about the cumbersome steps for exporting. How is the NEPC working to reduce the barriers for exportation?
A:Yes, that is a very critical point. There were about 32 steps to go to get into exporting and that is just crazy. I was with the Kwara state governor recently and we talked about the Zero Oil plan. The governor said, “You are at the tail end, but the whole supply structure or the value chain, there is something missing there which is where you need to concentrate on.” So, we are looking at is to bring the steps down. We are looking at streamlining the steps to enable us build a critical mass of exporters. Interestingly, we need to work with the relative agencies. We need National Agency for Food Drug and Control (NAFDAC) to be firmly on our side. We need the Standard Organisation of Nigeria (SON) on our side and most importantly, we need the Customs’ service.
We are currently talking with the new Customs Controller General and he was in our office recently. We had a chat and he looked at the idea and he will tell you that the Nigerian Customs are not export friendly. It is all about imports for them because for years we have been using the Customs as revenue generation agency. Although, Customs is actually a trade facilitation agency, but because of our huge import base, we have been generating a lot of funds from that and so we got comfortable with that without realizing that a nation can only be rich when it is exporting. The Customs requires re-orientation to enable them become more export friendly.
With the new Controller General, we are looking at different ways such as export warehousing in all our ports and airports. We are looking to get a one-stop shop where all the agencies are present to deal with exporters. Even our Customs agents must be friendly. We are not saying assist fraudulent exporters. No. For instance, many exporters don’t know that we have over 6,500 items that can be taken into America, tax free.
So, our Customs must also know that. So, when you are taking your goods they know that this is going straight into America under the African Growth Opportunity Act (AGOA) and it is tax free, but they don’t even know. So, they are even stopping you from here in Nigeria before you even go to face America. So, we need the Nigerian Customs Service to really work with us; be export friendly, assist exporters, know that is also generating foreign exchange for the country. I think we are on the right steps with that. We promise you that in a couple of weeks we are going to publish the new guidelines for exporters with reduced steps. It will be on our website and we will link the Customs Service on this so you know the steps for you to export.
We are also working with the Nigerian Customs to create an export hub. On the Nigerian trade hub run by the Nigerian Customs Service, every information you want about imports is there with categories such as prices, grades and so on. It’s all about exports. On the Nigerian Trade Hub, you can actually track your goods; which freight it is on, if it has been delayed and so on. You can track it till your goods get to the Nigerian seas. There is nothing there at all about exports and so we all stunned when we saw that. The last Controller General said ‘we need to create an export hub. We need NEPC to be on the Nigerian trade hub and so you can trace your goods and have all the information you need’.
We also want to improve our own website and create an export portal. That will really be interesting for SMEs because it will be a virtual exhibition centre for them. You can put your goods on there and buyers from America and all over the world can visit and see what your company is doing. Also, you can order online, because that is what is happening now; people sit down in the comfort of their homes and offices to place order. So very soon, you’re going to be able to do that for your exports.
Q:What are regulations on financing from the CBN?
A:The nation is facing a very critical point in its history. We had $70 Billion in 2014 in export figures for oil. In 2014, we had about $40 Billion. The nation has lost $30 Billion in revenue and government is facing a revenue crisis. So, when a country gets into this kind of problem, you have to come up with macro-economic policies to cope with the short term effects of these external shocks. The nation has received a big external shock in the loss of revenue. So, they are trying whatever they can. Those are just temporary steps. We are making a case for exporters, for example. Really, if you export and you remit your money and it’s at bank rate and you say that you can only keep it at bank rate and you can’t use it for anything else. Everybody else is changing at N300 and that doesn’t really encourage exporters. These are all temporary policies to withhold the external shocks and we are talking with the Federal Government on this and telling them to relax some of these stringent measures for exporters to access to their foreign exchange.
Q:Is it true that Nigerian goods have been banned in Europe; that we cannot export Nigerian goods to Europe?
A:We got this news sometime last year and it went viral. It was somebody writing in the Punch newspapers that the European Union (EU) banned all Nigerian goods into Europe. Of course, there was nothing like that. The EU operates what it calls the rapid alert system. When you come in with your goods, they screen it for health reasons. Once you are in the United Kingdom (UK), you are in the EU. What happened was that it was an alert on our beans. There was a rapid alert system on that and they traced it and said no that they were having a temporary ban on beans until we clear our SPS or afloat toxin and so on.
So, we have a ban in place on just beans and nothing else. What are we are doing to resolve the issue? We have until June, and there are things we need to do. We need better training for our farmers on better use of chemicals and tracking of their toxins. We need to tell them the best agricultural practices all the way. So we even set up a 17 member committee; NAFDAC, SON, Quarantine, and so on. All of them were together; we just finished meeting because we need to clear this up. Interestingly, Nigeria has not been sleeping. For the first time, we are working on our national quality infrastructure policy.
We are working assiduously with United Nations Industrial Development Organisation (UNIDO) to develop this policy. Also, the EU is fully aware of that. On the other side, we are already setting up our National Foods Safety committee. We never had these two things in Nigeria. Every country must trace the quality of their goods and what they are producing, not just to meet the standards of export goods, but for the wellbeing of the nation. So these are game changers for the Nigerian economy and once we get that we will have no problems. At the NEPC, we are working on the zero rejects policy. We start telling you that by the end of the mid 2016, before June, Nigerian products will not be rejected again.
We had this same issue on the melon seeds. It was banned, but it has been opened now. Let me emphasize again, we went to the National Assembly and EU reps to explain to the leadership that there was no ban on all Nigerian products. It was just on beans which is temporary and will be lifted by June 2016 when we have satisfied all the requirements.
Q:Can you tell us what the requirements to register with the NEPC are and how people can get in touch with you?
A:The easiest step is to visit our website – www.nepc.gov.ng. You will have to register online which is quite easy. You can also go to any of our 15 offices across the country. Then again, we are implementing our institutional and functional review of the entire council and we are going to have an office in every state capital of the federation to give people access. It is a simple process; we look at your certificate of registration. The whole process takes about 2 days to conclude.
Q:Give us one final word for Nigerian SMEs about Nigeria’s future and export potentials
A:I was reading one of my grandfather’s books and what he was saying was that the agrarian revolution must precede the industrial revolution. What I am saying is that we need to scale production on all our agricultural products. If there is nothing available, I cannot export. So scale up production on all agricultural products across the country. That is what the zero oil plan we are doing with the Federal Government is saying. Scale up production across all sectors and then we start to export.