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Tag: export

  • Towards cultivation of export quality cocoa

    Towards cultivation of export quality cocoa

    Farmers and exporters are learning to cultivate safe and high-quality cocoa that meets international standards through a project coordinated by Farmers Development Union (FADU) and some partners, DANIEL ESSIET reports.

    Evangelist Samson Makinde is a cocoa farmer in  Osun State. He owns a farm within the Ojere farm settlement. Over the past years, he has tried to do many things to improve his annual income from cocoa without results.

    Makinde was introduced to ‘Kokodola’ project. Kokodola is a Yoruba word which means ‘cocoa brings wealth.’ It started in 2012. It is a public-private partnership between Ferrero, Petra Foods Limited, Continaf , IDH, Oxfam Novib, and Farmers’ Development Union (FADU) in Nigeria. This opened the way for him to improve his cocoa business which he operates alongside rural missions.

    He is well-established locally and is fast becoming a household name. Before he did not have the technical knowledge to produce certified cocoa. Today, the programme is training him and a group of farmers in the state, through their cooperatives, to grow and harvest cocoa in the proper way.

    International organisations  have assisted the nation’s cocoa farmers to increase production to 500,000 tonnes per annum. They  have  encouraged  farmers to key into certification schemes to improve the country’s foreign exchange forex earnings by capitalising on her reputation as one of the producers of fine, or flavoured cocoa.

    The organisations include United States-based Hershey Company, German International Co-operation (GIZ), IDH (The Sustainable Trade Initiative) Oxfam Novib, Continaf, Ferrero, Petra Foods Limited and Farmers’ Development Union (FADU).

    Producers of certified cocoa receive the best prices. Through the project, aimed at improving safety and quality of cocoa, funded by GIZ, IDH and others, farmers received instruction from master trainers and extension officers on growing cocoa that meets international requirements. They visited other farms that have been certified for standards for the certification of cocoa cultivation – to learn good agricultural practices, such as the minimal use of pesticides and fungicides.

    Certification covers food safety and traceability; environment; workers’ health, safety and welfare; animal welfare; and integrated crop management, integrated pest control, quality management systems and hazard analysis, and critical control points.

    According to FADU Programme Coordinator, Victor Olowe, the certification helps farmers to ensure quality at a holistic level, in terms of taking  better care of farm workers  and  the produce, apart from the confidence it gives to foreign buyers.

    He said farmers were trained on a variety of things, including  use of fertiliser, chemicals, hygiene, health or safety, and how to bring a quality produce acceptable for export to the marketplace.

    He explained  that   farmers and  extension officers participating in  the project learn best practices in cultivation and post-harvest care to understand market requirements.

    Since FADU represents farmers including those in the cocoa sector, Olowe said the training has helped to see the quality of cocoa raised to a certain standard and quantity.

    Also the use of certain pesticides, weedicides and fungicides has been controlled.

    Phytosanitary methods is also part of the training which helps farmers to improve their quality standards.

    Through the project, he said FADU has been able to strengthen collaboration involving farmers, processors, exporters, government officials and buyers, adding that stakeholders value the need to partner and act together to address safety and quality-related issues for the benefit of all.

  • NEPC, UN streamline export procedure

    NEPC, UN streamline export procedure

    The Federal Government and the United Nations have partnered to streamline the process for exporting goods to the global market.

    The Nigeria Export Promotion Council (NEPC) in partnership with the United Nations Centre for Trade facilitation and Electronic Business agreed to simplify national and international transaction.

    This partnership is in line with recent successes recorded in the country’s quest to ease the time spent on doing business. According to World Bank report, Nigeria recorded marginal improvement from 169 to 149 out of the 190 countries surveyed globally.

    The Executive Director/CEO Nigeria Export Promotion Council NEPC, Olusegun Awolowo said the UN/CEFACT’s goal is simple, transparent and effective processes for globsl commerce. The organisation aims to help businesses, trade and administrative organisation, from countries at all levels of development, exchange products and services effectively.

    He spoke at a National Workshop on Trade Facilitation in Abuja, stating that the UN/CEFACT focuses on simplifying national and international transactions by harmonising processes, procedures and information flows, rendering them more efficient and streamlined, with the ultimate goal of contributing to the growth of global commerce.

    He said: “Just two weeks ago, Nigeria became  107th member of the World Trade Facilitation Agreement (TFA) in Davos. Ratification of the TFA shows Nigeria’s dedication to UN/CEFACT recommendation and it is a reflection of the country’s commitment to creating an enabling environment for businesses.

    “By ratifying the TFA, Nigeria has moved closer to overcoming our cumbersome trade processes and streamlining our trade procedures. The TFA contains provision for expediting the movement, release and clearance of goods. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance.

    “According to a 2015 WTO (World Trade Organisation) study, full implementation of TFA can reduce members trade costs by an average of 14.3 per cent with developing countries having the most to gain. Recommendation 33 establishing a single window interoperability are two more essential UN/CEFACT recommendations with which NEPC has been proud to participate.

  • ICRISTA to promote groundnut export

    International Crops Research Institute for Semi-Arid Tropics (ICRISAT) is set to enhance farmers’ income in the North through the adoption of better cultivation practices and promotion of groundnut export.

    ICRISAT, an  international organisation, is committed to improving food security, making smallholder farming profitable, tackling malnutrition by focusing on more nutritious crops, and helping overcome environmental degradation across the African continent.

    The strategy include improved access to new seed varieties; inputs and services that foster technology penetration; improve productivity; introduction of post-harvest technologies and providing market linkages to strengthen sustainable agriculture based livelihoods .

    Principal Scientist, ICRISAT-Nigeria, Dr Hakeem Ajeigbe,  said demand for improved groundnut varieties has increased over the years, making it imperative to develop varieties suitable to different agro-ecological zones of  the country.

    New varieties of groundnuts, according to him, are suited to the local soil and climate of the North. According to him, the institute will help small-scale farmers boost production and improve food security. He  said  ICRSAT has been working with national partners to develop improved groundnut varieties.

    He  said the  gap between potential and realised yield  was  large in subsistence farming. To address these issues, ICRISAT has been working with national partners to improve productivity of groundnut with the support from Tropical Legumes and Groundnut up scaling projects through development andlarge scale adoption of improved groundnut varieties.

    According to him, on-farm trials were established at four locations: Gumel (Jigawa State) and Zango (Katsina State).The locations were managed by ICRISAT with support from extension agents of the Agricultural and Rural Development Authorities (ADPs). Alongside, he said  ICRISAT and IAR established and directly managed similar validation demonstrations at Minjibir (Kano State) and Samaru (Kaduna State) locations.

  • We ‘ll start rice export by 2017, says CBN

    We ‘ll start rice export by 2017, says CBN

    Before the end of next year, Nigeria will start exporting rice, the Central Bank of Nigeria (CBN) has said.

    Its Acting Director, Corporate Communication, Mr. Isaac Okoroafor, said this during a sensitisation/awareness programme for farmers in Bayelsa State as part of the apex bank’s Anchor Borrowers’ Programme.

    Okoroafor, who said the CBN’s ABP had started yielding fruits, insisted that with the progress so far recorded by the CBN through its agricultural financing policies, the country would begin to export rice by next year.

    He said already the harvest in rice this year had exceeded the projections, noting that if the tempo was sustained, by the end of next year, Nigeria would not only meet its national demands but would export to other countries.

    Okoroafor said: “We started a pilot programme in Kebbi State with 78,000 farmers, cultivating an average of one hectare and that was when President Muhammadu Buhari launched the programme in March, last year.

    “The programme was to enable farmers plant three times in  a year – two dry seasons cropping and one rainy season cropping. I am telling you now that Kebbi State has exceeded one million tonnes of rice.

    “Not only Kebbi, Ebonyi state has keyed into it. We were there last week and Ebonyi is to give us over 1.2million tonnes of rice in one year. They are harvesting now, they are bagging and they are milling. Nigerians are booking their Christmas rice in Abakaliki.

    “Abia State has ordered rice from Ebonyi State Government. Others are keying in. In Kebbi, Jigawa, Sokoto, Cross River, rice is coming up. Nigerians are planting rice, producing rice. You need to taste Nigerian rice, it is fresh. Not the nine year-old rice from Vietnam, Thailand and India. Let us feed ourselves. Our rice is healthier, it is not preserved with chemicals.

    “We have been to Anambra, Niger, Jigawa, Kebbi, Sokoto, Cross River and Ebonyi just to ensure that this is not another talk show. We have seen harvest of rice which brought me to say that the harvest in rice for this year has so far outstripped our projections.

  • NEPC unveils framework to aid women in export

    NEPC unveils framework to aid women in export

    The Nigerian Export Promotion Council (NEPC) is working out modalities to include women in export activities that will bridge the gender gap and reduce poverty.

    The move is anchored on the belief that improving the performance of women businesses in non-oil export trade can translate into more jobs and also drive poverty reduction.

    NEPC Executive Director/CEO Mr. Olusegun Awolowo made this known on the sideline of the yearly conference of the Nigerian Association of Commerce, Industry, Mines & Agriculture (NACCIMA) Business Women Group held in Lagos, recently.

    He said $28 trillion could be added to the global economy by 2025 if women participated in the economy on equal footing with men.

    Awolowo said: “Countries with greater economic opportunities for women score higher on competitiveness and national income. Companies with greater gender diversity outperform others on probability and market valuation. A woman spends up to 90 per cent of her income on her family compared to 40-50 per cent by men.”

    He, however, regretted that there were many impediments on the way of women making progress though Small and Medium Enterprises (SMEs) where they are mostly engaged, making up over 95 per cent of global businesses.

    Awolowo said opportunities are still not the same for men and women, as they are 20 per cent less likely than men to have a bank account. ”Women have more business skills gaps and are more often excluded from the economy. Only one in five exporting firms is led by women,” he said.

    He further said the nation ranked 86 of 102 countries on gender inequality index, adding that NEPC would work towards building the capacity of women in business by bridging the skills gaps and embarking on hand-holding to ensure the businesses did not die as soon as they were initiated.

  • NEXIM, Fidelity Bank deepen non-oil export

    NEXIM, Fidelity Bank deepen non-oil export

    The Nigerian Export Import Bank (NEXIM Bank) and Fidelity Bank Plc are taking measures meant to enhance non-oil export and create wealth for Nigerians.

    Both lenders urged exporters to explore opportunities presented by the N500 billion non-oil Export Stimulation Facility (ESF) as well as the expansion of the export credit Rediscounting and Refinancing Facilities (RRF) to develop the economy, stimulate their operations, and create jobs for the people.

    Fidelity Bank’s Executive Director, Shared Services & Products, Chijioke Ugochukwu, said the lender is always at the forefront of financial services solutions and lending. She said the bank is committed to making a success story out of supporting non-oil export business.

    “Without a doubt, the most important thing for Nigeria today is non-oil export. We took a decision to play big in the cocoa sector, cashew nuts, and other key sectors, in a practical way. That is why we have a lot of talks around Fidelity Bank is very ready for export business and we want to attract successful entrepreneurs to the non-oil export business. We can assure you, this is more than talk. We do not just want to do export non-oil products, we want to do export them successfully,” she said.

    The acting Managing Director/Chief Executive, NEXIM Bank, Bashir Wali, spoke on the lender’s activities in non-oil export when he featured as guest on the Fidelity SME Radio Forum, a programme sponsored by Fidelity Bank to educate, inform, advise and inspire budding entrepreneurs, that was monitored on Inspiration FM in Lagos.

    The Central Bank of Nigeria (CBN) recently introduced the ESF and the RRF with a view to supporting the diversification of the economy and to expedite the growth and development of the non-oil export sector.

    Wali described Nigeria as endowed with both natural and human resources, including with huge untapped resources in the non-oil sector. He cited a National Bureau of Statistics report which put the total value of the country’s non-oil earnings in 2015 at $5.9 billion, with an average of $6.18 billion over the past five years.

    He said the ESF is aimed at encouraging entrepreneurs in the export sector so as to boost foreign exchange earnings from the non-oil sector.

    According to the NEXIM boss, in terms of informal trade, the amount ranges between $12 billion and $14 billion annually.

     

  • How Nigeria can earn $16b from export yearly, by NPA chief

    How Nigeria can earn $16b from export yearly, by NPA chief

    The Federal Government can make about $16 billion yearly if the Nigerian Ports Authority (NPA) explores markets in West Africa and embarks on trade facilitation programmes that will boost exports, The Nation has learnt.

    The NPA, it was gathered, needs to synergise with companies such as UAC, Unilever and others to realise this objective.

    The Chief Public Relations Officer, Calabar Port, Chijioke Ukadike, in a presentation to NPA Managing Director Ms. Hadiza Usman and three Executive Directors (EDs), who visited the p ort last week, said if NPA ups its ante to contribute at least five per cent to the imports of each of the 16 coastal countries, “then we shall be looking at injecting over $16 billion into the nation’s economy annually, and this is beside revenues from port charges.”

    Relying on data from the World Fact Book of the Central Intelligence Agency (CIA), Ukadike said the 17 countries lying along the West/Central Africa coastlines up to southern Africa had an estimated total import value of $324.88 billion as at 2014.

    A breakdown showed that Nigeria contributes 11.7 per cent to Senegalese import; 23 per cent to Cote d’Ivoire, 11 per cent to Ghana and 19 per cent to Cameroon.

    He said NPA should encourage agriculture and food production, such as palm oil, groundnuts, cocoa and other items for export to other regional countries. Ghana, he noted, recently overtook Nigeria in yam export, wondering what has happened to the famous Ogoja yam.

    Ukadike said Indonesia is the world’s highest producer of palm oil; producing 33.5 million tonnes from over six million hectares of palm plantation, adding that palm oil constitutes 11 per cent of Indonesia’s export earnings of $5.billion.

    “Many of us do not know that palm oil is an essential ingredient in the production of many types of chocolates, chewing gums, lipstick, washing powder, doughnuts soaps and other items,” Ukadike said, adding that young people must seek to build their capacity in maritime competence so as to take full advantage of the Cabotage Law, which gives exclusive provision for Nigerian owned and manned vessels along our coast.

    Ms.Adiza, while addressing reporters after the presentation, said  NPA would soon commence the recruitment of younger professionals into the service in view of its ageing officers. She admitted that there is a lot of skills and knowledge that need to be transferred before over 50 per cent of NPA’s officers will proceed on retirement as from next year.

    Ms. Usman said the agency would embark on the recruitment drive and look at the organisational structure to determine how the recruitment would be carried out. “We met an arrangement on ground concerning the decision to recruit as the present workforce is ageing.

    “We want to recruit specialists, mariners, critical operational staff. These are those positions that we will be targeting. We encourage every member of the public to be on the look-out,” she said.

    The 10-year old port concession agreement, according to her, is due for review, adding: “We would reach out to the ICRC and they would be part of the review.”

    She said many agencies, including the Nigerian National Petroleum Corporation (NNPC) are indebted to the NPA, adding that the management would proceed aggressively to recover all the debts.

    Investigation conducted by The Nation revealed that the NNPC is owing the NPA about N5 billion.

  • 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.

  • 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.