The Nation Newspaper

Category: Export Digest

  • Chinese firm set to develop Inland Container Depot in Edo

    Chinese firm set to develop Inland Container Depot in Edo

    A Chinese firm, China Harbour Engineering Company (Nig.) Ltd, has indicated its readiness to go into partnership with Atlantique Marine Engineering Services, Edo Inland Container Depot,  known as AMES-Edo ICD on export.

    Mr Jason Wang, who led a seven-man delegation of the firm to the state on the invitation of Edo Government, dropped the hint on Friday in Benin.

    Wang and his team also visited the Gelegele seaport, the operational base of the AMES-Edo Inland Container Depot to assess the work done so far.

    Wang said he was impressed and that his firm would look at possible ways of collaborating and partnering with AMES-Edo to drive the project to its earliest conclusion and begin full operation.

    “We are impressed with the work done here so far. China Harbour Engineerng Company ( Nig.) Ltd will look at possible ways of collaboration to drive the project to its earliest conclusion,” he said.

    He said the team was in the state as a follow up to  Gov. Godwin Obaseki’s business visit to the company in China about three weeks ago where an MOU was signed by the state government and the company to develop the Gelegele Seaport.

    READ ALSO: Gelegele Seaport: China Harbour arrives Benin, commences work on project

    Dr Charles Akhigbe, Chief Executive Officer ( CEO ) of Atlantique Marine and Engineering Services, AMES, the promoters of the AMES-Edo inland container depot, said the organisation was confident that the proposed inland container depot would reduce the cost of export of agricultural produce and increase government’s GDP.

    Akhigbe disclosed that the port was just three steps from final approval for full operations to commence.

    He said  the project would create not less than 3,000 jobs for youths and provide the platform for exchange of knowledge between government and foreign investors.

    He also said that the container depot would emerge as the pioneer full-fledged inland container depot in Southern Nigeria to commence operation and would immediately serve the need of haulage services.

    According to Wang, the company has already commenced negotiation with the Federal Government to build modern railway lines as a primary mode for long distance haulage of cargo, noting that 75 per cent of Nigeria’s total export passed through Edo.

    “Discussion is ongoing with the Nigeria Railway Corporation to use BOT PPP mode to construct 110km short spur line from Agbor to Edo inland container depot.

    “For now the inland container depot will operate 100 per cent by road but in the next 6-10 years, 40 per cent will go by road while 60 per cent will be by rail.

    “The phases one and two of the inland container depot would accommodate 12, 000 units of 40ft TEUs and 8,000 units of 40ft TEUs with a maximum of 25,000 TEUs at any given time,” he said.

    Meanwhile, the Senior Special Assistant to the Edo Governor on Business Bureau, Mr. Edward Osayande, said the governor was committed to industrialising the state by encouraging public private partnership.

    He said the inland container depot was the central plank of the state government’s effort at creating jobs through industrialisation.

    He also stressed the need to bring the Gelegele Seaport, AMES-Edo inland container depot and Edo Industrial Park together to drive development in the state.

    NAN

  • Unilag, 3T Impex to train exporters

    As Nigeria seeks to build and expand her exports base, two foremost human-capacity development institutions, University of Lagos (Unilag) and 3T Impex Trade Academy, have reached agreements to launch a comprehensive certification course that will impart necessary knowledge and skills on existing and potential exporters.

    The 3T Impex Trade Academy, an arm of 3T Impex Consulting and Unilag would develop and run various Diploma programmes in international trades in Nigeria. These include Executive Diploma in Export Business Management and Executive Diploma in Export Trade Finance

    These certificated programmes have been designed to provide detailed knowledge and skills to students in such a way that they will become the export champions for Nigeria as government seeks to unlock the export potential of each sector of the economy. The programmes will lead to award of certificates that bear testimony to the professional qualification of the bearer in the area of international trade and finance.

    The programmes will enable the students to demonstrate practical knowledge and understanding of complex issues relating to export trade and finance. As such, they are ideal  for people new to export and experienced export companies because they will provide successful experts with a thorough grounding in the key areas of foreign trade.

    Managing Director, Unilag Consult, Prof Bola Oboh, said the partnership was in line with the national economic agenda and the charge of the foremost citadel of learning to provide knowledge and skills to facilitate economic development.

    She described the arrangements for the programmes as comprehensive and impressive, noting that 3T Impex Trade Academy has the faculty, experience and credibility to jointly make a success of the programme.

    Lead Consultant, 3T Impex Trade Academy, Mr. Bamidele Ayemibo, said the programmes were basically designed to provide the country with a steady stream of competent men and women with the necessary knowledge, skills and foundations for a wide range of rewarding careers in the rapidly expanding world of exportation.

    According to him, the programmes were designed to provide all the knowledge, tools and techniques necessary to manage all the technical aspects related to export trade business operations and financing.

    The target audience for the programmes include: bankers, commercial banks, developmental banks, exporters, importers, young graduates, farmers, miners, government agencies, and manufacturers, among others.

    Upon completion of the course, students would become valuable talents for export and import companies planning to set up export business while those with work experience are equipped with skills that empower them to favourably compete for trade-related jobs in the global space or set up their businesses.

    Each of the training programmes is divided into about three modules. Each comprises about six subjects or topics that address specific areas of export trade business.

    To be eligible for these programmes – Executive Diplomas in Export Business Management and Executive Diploma in Export Trade Finance, the student needs to hold a bachelor degree or advance or higher diploma in any discipline with or without work experience. Those with cognate work experience in banks, importing and exporting companies and other related institutions may also be considered.

  • How Kwara can become financially independent through non-oil export

    A large number of states in Nigeria are running on avoidable deficits due to overdependence on centrally allocated crude-oil dependent revenues. Many of the state governments came into power with the mindset of getting monthly allocation from the federation account but the decline in the oil price and the lingering slowdown due to destruction of oil pipeline and installations have dashed many hopes. Unpaid salaries, uncompleted and abandoned projects and many socio-economic and political challenges are many states due to paucity of funds.

    In this article, I will be focusing on how Kwara State can become financially independent through aggressive drive for non-oil exportation. According to BudgIT, Kwara is among the states in Nigeria that is running at a huge deficit. This is because the total income realisable from both the internally generated revenues and the federal allocation are grossly inadequate to meet the recurrent expenditure talk less of the capital expenditures.

    My position has been that all the states in Nigeria have what it takes to internally fund their budgets and survive independently of the federal government allocation. To achieve this, they only need to focus on two major sectors namely; agriculture and non-oil export. The strategies put forward in this article are capable of not just helping the states to generate revenue and become self-sufficient, in addition to this, it will also help them to create numerous jobs for their teeming population.

    Kwara is blessed with very large land mass that is suitable for the production of different kind of exportable agricultural commodities, but in this article, our recommendation for this state is Raw cashew nut export. Even though this is a tree crop with gestation of about two years for improved varieties, but the potential upon maturity will last for many years.

    According to the Collaborative Survey by National Bureau of Statistics, Central Bank of Nigeria, Federal Ministry of Agriculture & Rural Development and Federal Ministry of Trade & Investment, this state produced about 39,000MT of raw cashew nut in 2012.

    Using the national average of about 38 per cent, this state currently has arable land that is about 1,414,080. hectares of lands. We have made some reasonable and very conservative assumptions in this analysis and these include that: the state is using just 40 per cent (565,632 hectare) of this land for cashew nut plantation

    -the yield per hectare of Cashew nut is 1MT per hectare (even though, there are varieties that can yield more than this) this yield was used to make provisions for losses that might occur during harvest -the unit price of cashew nut is $1,000/MT FOB Lagos (even though it can be as high as $1,200) -cost of farming was put at N25, 000 per hectare based on some research works -cost of exporting per metric tonne was put at N35, 000 base on the export projects I have handled in the past

    With a yield of 1MT per hectare, this means that the state can produce 565,632MT of cashew nut on the land size stated in the assumptions above. If this cashew nut is exported at a free on board (FOB) price of $1,000/MT, the total proceeds will be $565,632,000. Using a conversion rate of N310 to 1$, this amount to N175, 345,920,000. The unit cost of farming Cashew nut and exporting are N25,000 per hectare and N35,000 per MT respectively. The total cost of farming plus 50 per cent profit on the sales to the government (or to the trading company engaged by the government) comes to N21,211,200,000 and the total cost exporting (transport, documentation, freight forwarding etc) comes to N19,797,120,000. The total project cost (farming and exportation) will be about N41,008,320,000. The estimated profit that can accrue to the state on this project comes to about N134, 337,600,000.

    According to data obtained from government sources, the IGR of the state for the year 2014 was about N17,497,620,787.52. This will remain low and even drop further because it is mainly generated from the personal income tax on workers in the state most of which have not been paid for some months now. From the analysis we have done on farming and exportation of Cashew nut, the state government could grow her revenue several thousand times over and above the current level if the government can embrace this new way of thinking in their drive for revenue generation.

    The state can start this drive with the exportation of Cashew nut to meet the current financial obligations but with a plan to begin to add value and process it into Cashew Kernel which will more than triple the revenue from the raw cashew nut.

  • UK firm to certify agric exports

    A United Kingdom-based GLOBALGAP Licensed Farm Assurer, Best Produce International (UK) Limited, has launched a programme to facilitate the certification of agricultural exports under the Global Good Agricultural Practices (GLOBALGAP Standard).

    GLOBALGAP standard, formerly known as Eurepgap, is an integrated farm assurance process used in EU countries, United States and other parts of the international markets to serve as a business to business tool and it is a private commercial certification process for export of agricultural produce to EU countries. It is a producer export tool to suppling to top supermarkets throughout Europe and Walmart Group in USA.

    Best Produce International (UK) Limited, the GLOBALGAP Licensed Farm Assurer for Nigeria is collaborating with 3T Impex Consulting, Africa’s  trade and commerce consulting and training firm, to train and capacity build Nigerian farmers, farmers groups and exporters in Nigeria in GLOBALGAP certification processes to change the face of Nigerian agricultural exports.

    While several African countries boast of GLOBALGAP Certification of their agricultural produce for export, Nigeria oddly is the only major African market without such certification. There is no farmer or exporter in Nigeria with such certification whereas other African nations from the last count, could boast of at least 1,846 GLOBALGAP-certified companies in Kenya, 1,797 in South Africa, 355 in Cote d’Ivoire, 124 in Ghana, 9 in Cameroun, 146 in Burkina Faso and 671 companies in Egypt.

    The EU recently decided on a three-year extension of the ban on Nigeria’s dried beans. Nigeria has also witnessed continuously large rejection of its agricultural exports.

    The  GLOBALGAP Standard is designed as a practical tool to reassure consumers about how their food products are produced from farm to processing and to their tables.  It also offers small scale farmers and exporters who go through the certification process, the” passport” to export their produce to international markets.  It is a business-to-business tool that reassures the large scale retailers and consumers that their agricultural produce are produced in line with international standards.

    Managing Director, Best Produce International (UK) Limited, Mrs Patricia Obichukwu FRSA, said the certification of agricultural produce for exports  will enable producers and exporters to freely export their products directly to the EU supermarkets.

    Lead Consultant, 3T Impex Consulting, Mr. Bamidele Ayemibo, said the collaboration with Best Produce International (UK)would help to stem the tide of international rejection and enhance the competitiveness of Nigerian agricultural exports in the  global markets.

    Obichukwu noted that when Nigeria focuses on agriculture as the main plank of its economic diversification,  establishing local gap and, ultimately, Nigeria GAP at long run for the process of certification will create massive employment opportunities for the country, enhance foreign exchange generation, create wider access to regional and international markets, enhance the development of  businesses through advanced quality control management while ensuring food safety and food security for the country.

  • Fayemi, metal exporters team up to grow non-oil revenue

    Fayemi, metal exporters team up to grow non-oil revenue

    The Ministry of Solid Minerals Development and the Association of Metal Exporters of Nigeria (AMEN) have reached an agreement to develop the potential of the solid minerals sector in line with the economic diversification programme of the government.

    The leadership of AMEN paid a courtesy visit to the Ministry of Solid Minerals Development during which the two parties committed to working together to develop the indigenous solid minerals sector and reposition it as a major foreign exchange earner for the country. Minister of Solid Minerals Development, Dr. Kayode Fayemi, and the Minister of State for Solid Minerals Development, Hon Bawa Bwari, received the executive members of AMEN led by its President, Seun Olatunji.

    Other members of AMEN at the meeting included vice president, Mr. Bamidele Ayemibo, and executive member, Mecha Udomecha.

    Fayemi said the government was committed to developing the solid minerals sector in a way that ensures that Nigerians benefited fairly from the natural endowments by participating in the operations, while simultaneously developing the potential of the sector as a major non-oil revenue earner.

    He said the Ministry had engaged in far-reaching consultations as part of its commitment to pursue an inclusive approach that carries all stakeholders along, noting that there is need for all Nigerians to join hands with government to successfully diversify the economy.

    Fayemi said the government was not unaware of the illicit export of Nigeria’s valuable solid minerals without appropriate revenue accrual to the Federal Government, decrying the connivance between Nigerians and foreigners to swindle Nigeria of her revenues.

    He said the Ministry would work with Nigerian Customs Service, Standards Organisation of Nigeria (SON), Nigerian Port Authority (NPA) and other agencies to create an efficient synergy that benefits stakeholders.

    He noted that the most profitable way to approach the sector is through value addition, such as solid minerals beneficiation and crushing, assuring that government would provide the facilities to develop the value-chain in the sector.

    Fayemi pointed out that the Ministry has been working with international partners to enshrine global best practices in the sector citing the partnership with international inspection companies like SGS to manage the highly sophisticated NGSA Laboratory in Kaduna State as well as SGS establishing a testing laboratory in Lagos State.

    Fayemi commended the registered metal exporters for their patriotism and commitment to the development of the solid minerals exports.

    Bwari urged Nigerian companies to look beyond rudimentary exploitation to development of the full value-chain of the sector, citing China’s development as a country.

    He also commended the metal exporters and enjoined them to always bring valuable information to the Ministry as this is vital to the growth of the sector.

    Olatunji commended the purposeful leadership of Fayemi and expressed the readiness of the association to support the government in its diversification programme.

    He pointed out that members of his association were responsible for a large chunk of the $1.742 billion repatriated as export proceeds between 2010 and 2015 as confirmed by the Central Bank of Nigeria (CBN), stressing that AMEN’s members were responsible for more than 50 per cent of the metallic solid minerals exports from Nigeria especially Lead, Zinc, Copper and Manganese.

  • How Plateau can be self-sufficient through non-oil export

    Plateau State is among the states in Nigeria that are running on deficit, according to BudgIT.

    This is really unfortunate because this state is among the few in Nigeria that has a double; in the sense that it has huge deposit of solid minerals with export potential in addition to its agricultural potential. Plateau has no reason to be in this financial mess.

    However, the people on the plateau have found themselves in this predicament because they have not learnt how to harness the state potential in both agriculture and solid minerals to generate enough revenue to meet her obligations.

    This article should show the state a way out in practical sense with the numbers that are well researched and not just speculation on what could be done. This article is a departure from the empty projections of political sloganeering, with its empty promises of projected internally generated revenue and jobs to be created, without specifics on how to deliver on such.

    The time has come for us to begin to tell the leaders what they need to start doing in order to redirect their various states to the path of economic progress. In this article, we will be examining how the farming and exporting of sugarcane can help Plateau to generate N170 billion in revenue if the government can commit just 10 per cent of its arable land to the cultivation of this agricultural commodities.

    Let me also point out that the facts stated in this paper are based on the data obtained from different research done by Central Bank of Nigeria, National Bureau of Statistics, Ministry of Agriculture and some universities in Nigeria.

    Plateau State produced about 28,000MT of Sugarcane in 2012. Using the national average of about 38 per cent, this state has arable land that is about 1,187,059.20 hectares of lands. We have made some reasonable and very conservative assumptions in this analysis and these include that: the state is using just 10 per cent (118,785.92 hectare) of this land for sugarcane plantation, the yield per hectare of sugarcane is 20MT per hectare (even though, there are varieties that can yield more than this) this yield was used to make provisions for losses that might occur during harvest, the unit price of sugarcane is $600/MT FOB Lagos (even though it can be as high as $750), cost of farming was put at N250,000 per hectare based on some research works and cost of exporting per metric tonne was put at N40,000 base on the export projects I have handled in the past.

    With a yield of 20MT per hectare, this means that the state can produce 2,374,118.40MT of sugarcane on the land size stated in the assumptions above. If this sugarcane is exported at a free on board (FOB) price of USD600/MT, the total proceeds will be $1,424,471,040. Using a conversion rate of N285 to 1$, this amount to N405, 974,246,400. The unit cost of farming sugarcane and exporting are N250,000 per hectare and N40,000 per MT. The total cost of farming plus 50 per cent profit on the sales to the government (or to the trading company engaged by the government) comes to N44,514,720,000 and the total cost exporting (transport, documentation, freight forwarding etc) comes to N94,964,736,000. The total project cost (farming and exportation) will be about N139,479,456,000. The estimated profit that can accrue to the state on this project comes to about N266,494,790,400.

    According to data obtained from government sources, the IGR of the state for the year 2014 was about N8, 280,000,000. From the analysis we have done on farming and exportation of sugarcane, the state could grow her revenue by about 2000 per cent from this source alone.

    To implement the option put forward in this article, here are some of the steps that the state will have to take. The state government should purchase of improved varieties of seedlings and other farm inputs for registered farmers and cooperatives, train the farmers on the best farm practices using Agriculture professionals and extension officers, provide a guarantee to the farmers to purchase the harvested crops from them at a pre agreed price, partner with a trading company for marketing and export of the commodity and share proceeds and buy the farm produce from the farmers on credit and pay them upon receipt of export proceeds from buyers abroad.

    We strongly believe that if the government of Plateau State can adopt this commodity as a means of revenue and implement the strategies suggested, it will naturally improve the economy of the state to the part of greatness within few years.

    The state will not only become self-sufficient but numerous jobs will also be created with several socio-economic benefits. As Africa’s leading export consulting firm, we will be willing to partner with governments to explore the export potential of each state.

  • How states can generate revenue from export

    Nigeria is in a state of economic downturn with some states unable to pay the salaries of their workers. This is primarily due to the fact that the states had mainly focussed on the allocations of incomes mainly from crude oil sales by the federal government. This resulted in a great concentration risk that have now crystallised into a major chaotic situation in which many of the state governments are now owing several months of salaries and also unable to meet other obligations.

    In response to this problem, the states are now planning to diversify their economies and focus on other sources of generating revenue. However, they seem to be focussing more on taxes and levies from populace who do not even have enough to take care of themselves and their families. The aim of this article therefore is to demonstrate how the Nigerian states can effectively generate foreign exchange revenue directly by exporting farm produce and commodities from their states.

     

    Building a working structure

    One area where a state government can leverage on its natural resources and the entrepreneurship of its people is in the area of building effective and working export platform. This will involve a public private partnership arrangement that involves the state government, a private organisation and the farmers in the state. In this arrangement, the state government forms a trading company in which it will own the majority shares. This company will buy the agricultural commodities from the farmers, prepares them for export, negotiates the export contract, ship the goods to the final destination and presents document to the importer’s bank for payment. The farmers form themselves into small groups of cooperatives registered with the state, cultivate the commodities needed for export, deliver them to the designated collection centre and sell them to the trading company. The state government provides lands for the farmers, trains the farmers in good agricultural practices, provides seedlings and gives them to farmers, agree a buying price with the farmers through the trading company and issue a payment guarantee that assures the farmers of payment within about 120 to 180 days after delivery to the designated collection centre.

     

    The dynamics

    I will briefly outline the step-by-step processes and decisions that will lead to creation of a viable export value chain. First, the state government must determine the commodity to be exported based on employment generation, profitability, export market demand and potential to produce locally in the state. Then, the state government will partner with farmers and consultants to train the farmers and monitor the practices on the farm. Thirdly, the state government partners with a private organisation to form a trading company. Then, the state government facilitates the aggregation of intending and existing farmers into cooperatives. After this, the state government engages a consultant to train the farmers in global good agricultural practices (Global GAP). Besides, the state government will need to provide seedlings for the farmers and all other farm inputs. Also, the state government company will thereafter issue a purchase order to the farmers stating that payment will be made within 120 days after delivery to the designated collection centre and the state government will also issue request for the issuance of a payment guarantee from a commercial bank in favour of the farmers.

    On the part of the trading company, it will look for buyers, negotiate and sign the export contract. The trading company receives reviews and accepts the terms of the letter of credit. The farmer cultivates the crop and delivers the harvested commodities to the designated collection centre. The trading company prepares the goods for export, do all the pre export documentations and deliver the goods to the shipping line. After, the trading company ships the goods and deliver this shipping document to the local bank. The local bank sends the documents to the importer’s bank abroad for payment based on the terms of the letter of credit. The importer’s bank effects payment within the period stipulated in the letter of credit. The local bank receives payment and credit the account of the trading company.

    The state government sells the foreign exchange to the local bank to get Naira. The state government pays all the cooperatives that supply the commodities based on the agreed price in the purchase order. The state government pays the private organisation in line with the shares it holds in the trading company and then, the state government can then utilise the balance to fund her budget. Meanwhile, some of the roles apportioned to the state government in this dynamic can be done through the trading company set up by the government.

    For questions on this thought, you can reach me via email to bayemibo@3timpex.com.

  • Non-oil exporters’ earnings drop by 27%

    There has been a considerable decline in the performance of non-oil export sector in recent period as latest economic report by the Central Bank of Nigeria (CBN) showed double-digit declines in the earnings of non-oil exporters and the contribution of non-oil sector to total foreign exchange inflow.

    The latest economic report by the apex bank indicated that total non-oil export receipts by banks in the month of April 2016 fell by 27.3 per cent to $364.35 million compared to the previous month.

    The development was attributed mainly to the decline in most of its components except the minerals sector. A sectoral analysis showed that on a month-on-month basis, proceeds from food products, manufactured products, industrial and agricultural sectors fell by 26.0 per cent, 42.8 per cent, 17.6 per cent and 24.5 per cent to $16.9 million, $204.1 million, $24.2 million and $25.9 million, respectively, below the levels in March 2016. However, proceeds from minerals grew by 61.1per cent to $93.15 million.

    The shares of the various components in the non-oil export proceeds included manufactured products, 56.0 per cent; minerals, 25.6 per cent; agricultural, 7.1 per cent; industrial, 6.7 per cent; and food products, which accounted for 4.6 per cent.

    The apex bank’s economic report also indicated that a month-on-month drop of 40.5 per cent in non-oil receipts contributed to a marginal decline of 6.1 per cent decline in foreign exchange inflow during the month of April.

    The report showed that foreign exchange inflow through the CBN stood at $1.31 billion in April, a decline of 6.1 per cent from the previous month of March and 54.3 per cent drop from the comparable period of 2015.

    The report indicated that aggregate foreign exchange inflow into the economy was $4.78 billion in April 2016, indicating 3.1 per cent increase relative to the level at the end of the preceding month, but a decline of 42.2 per cent from the comparable period of 2015. Non-oil sector inflow of $0.48 billion accounted for 10 per cent of the total inflow and represented 40.5 per cent decline from the previous month.

    Also, analysis of sectoral utilisation of foreign exchange indicated that agricultural products accounted for the least utilisation at 0.8 per cent of the total forex disbursed in April 2016.

    The shares of the sectors in a descending order were invisible sector, 32.8 per cent;  industrial sector, 23.3 per cent; minerals and oil, 22.3 per cent; manufactured product, 11.8 per cent; food products, 6.8 per cent; and  transport sector, which accounted for 2.2 per cent.

     

  • ‘Nigeria needs global products to grow non-oil exports’

    Nigerian businesses, exporters, government and other stakeholders should build a portfolio of unique, distinctively tasteful and original products that will appeal to international consumers, participants at a forum have said.

    At the conference organised by the Women in Education and Leadership Development Society in collaboration with the Business Women Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), in Lagos, the participants agreed on the need for  stakeholders to form a common front towards enhancing the competitiveness of Nigerian products in the global market.

    Managing Director, 3T Impex Trade Academy, Mr. Bamidele Ayemibo, who spoke on the strategies for “transiting from local production to global consumption”, said qualitative, tested and physically attractive products could open up the global market and related funding to small and medium enterprises (SMEs).

    Ayemibo, who runs one of Africa’s top five trade consulting firms, recently returned from a United Kingdom (UK) tour that included marketing of some Nigerian-made snacks, including plantain chips, potato chips, corn meal (Kokoro), locusts beans spices (Iru), pap (from maize and Guinea corn), groundnut cake (Kulikuli), pineapple snacks, mango snacks, fruits and nut mix and coated peanuts, said small-scale manufacturers in Nigeria who have good quality products but need more market and funding to scale-up and grow their businesses stand better chance of success in the global market if the manufacturers and other stakeholders address the entire value-chain of the local-to-global transition, including good preparation, competitive product, seamless and cost-effective process, adequate problem-resolution mechanisms and projective response approach that take into consideration other possibilities.

    He pointed out that exporting Nigerian products for the consumption of Nigerians in Diaspora would not qualify as real exporting business, noting that a product is not global because it is abroad unless other nationals are patronising it.

    Ayemibo urged the government to provide incentives that could enhance Nigerian exports, including provision of amenable finance at the lowest possible cost, setting up a free laboratory that could confirm the standards of products, pre-export incentives, such as payment of freight charges to destination and leading efforts to establish private public partnership outfits that could provide consulting services to existing and prospective exporters.

    He advised exporters to invest in continuous upgrade of their products in line with international standards and changing tastes in order to remain relevant and also to avoid the problems of litigation that could come with poor standards and misinformation.

    “If we want to create enduring wealth for our children, create extensive wealth for the country and create everlasting wealth for the continent of Africa, then all hands must be on the deck to promote the transition from local production to global production,” Ayemibo added.

  • States can be self-sufficient via non-oil export: Nasarawa as case study

    One of the most blessed states in Nigeria is Nasarawa because it combines a unique potential for both agriculture and solid minerals. Its appellation as “Home of Solid Minerals” is, indeed, true because this is the most endowed state in Nigeria in terms of deposits of economically and commercially viable natural resources.

    The report of the 2013 National Survey on Agricultural Exportable Commodities done through the collaboration of Central Bank of Nigeria, National Bureau of Statistics, Federal Ministry of Agriculture and Federal Ministry of Trade & Investments revealed that Nasarawa State has great potential for the production and exportation of sesame seeds, ginger and sugarcane.

    According to the report of BudgIT on the revenue and expenditure of the Nigerian states from January to last July, Nasarawa was the fourth on the list of states that with huge deficit. Despite the huge potential of this state, it has not met its recurrent expenditure due to over-dependence on federal allocation.

    This report is aimed at showing the government of Nasarawa State that it can truly diversify the economy of this state by making some deliberate effort to increase the farming of the sesame seeds, ginger and sugarcane in the state. The government should encourage citizens to undertake farming of exportable product by forming cooperatives in different parts of the state, train citizens in the farming of one of these commodities, provide them with improved variety of seedlings, agree a price to buy the harvested crop from them and then give them bank guarantee to buy the harvested crops from them at a collection point and pay them back within a stipulated period.

    This means the state will partner with trading firms to coordinate the exportation of the commodity and earn  foreign exchange afterwards. The state can then pay the farmers from the export proceeds upon conversion to Naira. This model has a humongous potential not just to generate revenue for the government, but also to create unprecedented job opportunities for the citizen of this state.

    In this article, I will be considering the potential of farming and exporting sesame seed as a very viable and sustainable means of revenue generation for Nasarawa. Let me also point out that the facts raised in this paper are based on the data obtained from different research done by Central Bank of Nigeria, National Bureau of Statistics, Ministry of Agriculture and some universities in Nigeria.

    Nasarawa produced about 40,000 metric tonnes of Sesame seeds in 2012. Using the national average of about 38 per cent, this state has arable land that is about 1,041,292.80 hectares of lands. We have made some reasonable and very conservative assumptions in this analysis and these include:

    • The state is using just 20 per cent (260,323.20hectare) of this land for the farming of sesame seed -the yield per hectare of sesame is two metric tonnes per hectare (even though, there are varieties that can yield more than this) this yield was used to make provisions for losses that might occur during harvest -the unit price of sesame seed is $1,200 per metric tonnes FOB Lagos (even though it can be as high as $1,500.
    • Cost of farming was put at N122, 000 per hectare based on some research works-cost of exporting per metric tonne was put at N25, 000 based on the export projects I have handled in the past.

    With a yield of 2MT per hectare, this means that the state can produce 520,646.40MT of sesame seeds on the land size stated in the assumptions above. If this sesame seed is exported at a free on board (FOB) price of $1,200/MT, the total proceeds will be $624,775,680.00. Using a conversion rate of N280 to $1, this amount to N174, 937,190,400. The unit cost of farming sesame seeds and exporting are N130, 000 per hectare and N35, 000 per MT respectively. The total cost of farming plus 30 per cent profit on the sales to the government (or to the trading company engaged by the government) comes to N43,994,620,800 and the total cost exporting (transport, documentation, freight forwarding etc) comes to N18,222,624,000. The total project cost (farming and exportation) will be about N62, 217,244,800. The estimated profit that can accrue to the state on this project comes to about N112, 719,945,600.

    According to data obtained from government sources, the IGR of the state for the year 2014 was about N4, 085,127,585. From the analysis we have done on farming and exportation of sesame seed, the state could grow her internally generated revenue by about 2,759% from this source alone.

    We strongly believe that if the government of Nasarawa can adopt this commodity as a means of revenue and implement the strategies suggested in this report, the state can be repositioned on the path to prosperity and greatness within few years.

    For questions on this thought, you can reach me via email to bayemibo@3timpex.com.