The Nation Newspaper

Tag: exporters

  • CBN sets aside N500b for loans to non-oil exporters

    CBN sets aside N500b for loans to non-oil exporters

    The Central Bank of Nigeria (CBN) is setting aside N500 billion (about $2.5 billion) for loans to non-oil exporters, after a slump in oil revenues led to the worst crisis in Africa’s biggest economy in decades.

    The Organisation of Petroleum Exporting Countries (OPEC) member, whose economy shrank 0.4 per cent in the first quarter, has been  hard hit by a slump in global oil prices as it relies on sales of crude for around 70 per cent of national income and 90 per cent of foreign exchange earnings.

    The CBN said it “will invest in a N500 billion debenture to be issued by Nigerian Export-Import Bank (NEXIM)” as part of a bid to diversify the country’s revenues away from crude.

    Nigeria was Africa’s top oil producer until a series of militant attacks on pipelines pushed crude production to a 30-year low. The value of its exports, mostly crude, plunged 52 per cent to N1.27 trillion in the three months to March from a year ago.

    It expects to nearly double its non-oil revenues this year to counter the effects of lost crude income.

    “The facility is essentially designed to redress the declining export credit and reposition the sector to increase its contribution to revenue generation and economic development.

    “It will improve export financing, increase access of exporters to low interest credit and offer additional opportunities for them to upscale and expand their businesses,” the apex bank explained.

    The bank said loans for up to three years would be granted at a maximum all-in interest rate of 7.5 per cent a year. Loans of more than three years will be granted at a maximum rate of nine percent a year.

    Much of the hard currency Nigeria needed to finance imports evaporated as the CBN burned dollars in an attempt to peg the naira at 197 to the dollar, which it gave up under new FX guidelines introduced on Wednesday.

  • ‘Access to finance major drawback to exporters’

    ‘Access to finance major drawback to exporters’

    The slump in oil prices has made diversification of the economy imperative. Global Nigeria Limited Managing Director Mr Seun Olatunji believes the solid minerals sub-sector of the mining industry holds the magic for boosting revenue and creating jobs. Olatunji, who is also the president of Association of Metal Exporters of Nigeria (AMEN), laments the poor access to finance in the sub-sector. He speaks to Taofik Salako on the challenges and potential of the solid minerals industry.

    WHAT can solid minerals, especially metals, contri-bute to the Federal Government’s quest to diversify the economy?

    The potential of the solid minerals sector is so immense that I dare say that the country can survive comfortably with its solid minerals endowment alone. We are a blessed country when it comes to solid minerals and everyone can see that from one’s backyard to state. From a pragmatic perspective; of the 44 identified solid minerals endowment in Nigeria, at least 10 of these solid minerals in the metallic minerals category including manganese, copper, columbite, tin, tantalite, gold, lead, zinc, beryl, chrome and zirconium, alone can provide Nigeria with enormous foreign exchange earnings. These metals have accounted for at least 80 per cent of the export proceeds accruing from solid minerals in Nigeria. According to data from Central Bank of Nigeria (CBN), $1.742 trillion accrued to Nigeria as export proceeds from solid minerals between 2010 and last year. These figures were achieved without any serious government focus on the sector. When those individual companies and cooperatives whose solid minerals exports brought about this $1.742 trillion scale up their exports capacity by 10 times; it suffices to say that the proceeds accruable from solid minerals export would jump to $17.42 trillion. This would have come with taxes accruable to the Federal Government and creation of jobs along the solid minerals value chain as a result of the expansion. You can begin to imagine if we enlarge the net to capture the other solid minerals.

    So, everything that the government has laid out as its targets- foreign exchange earnings and diversification, creation of jobs and widespread national development across the states are all embedded in the development of the solid minerals sector.

    As an operator, what are the industry’s challenges?

    There are many challenges that one faces as an operator in the industry, although these challenges vary according to the level of operations and the position on the value chain. But they are mostly linked together and you can sum  them up under four basic headings- infrastructure, bankable geological data, standardisation and institutional finance. The poor infrastructure network in the country means high cost of transporting the metallic solid minerals from the remote mines to the nearest seaport, which makes it difficult for the  exporters to compete in global markets especially in the areas of pricing and export volumes. The global markets operate amidst fierce competition; therefore the federal and state governments must invest to upgrade and expand our rail network across the six geopolitical zones.

    Also, the absence of bankable geological data means that the industry cannot effectively utilise private sector opportunities including finance and foreign assistance as well as global trade agreements. Financial institutions cannot fund mining projects without knowing the reserves of the various mines in question. The federal and state governments might not be able to do most of these geological research; however, they are required to take responsibility for a chunk of the work especially since the Federal Government claims exclusive royalty collection from the mines operators. The government must come to the aid of the sector by way of underwriting exploration costs – there should be a mid-point. Government can use its other fiscal policies such as waivers, tax holiday, concession and guarantee among others to incentivise the development of geological data. We must work on standardisation if we are serious about competing globally, and this must be a national task, general standards that conform to global standards. The bulk of the solid minerals exported from Nigeria pass through procedures of inspection which are far below internationally accepted standard procedures. Therefore, exporters are underpaid and the government also loses revenue in the process.

    In a development process, there is always the need to support the fledgling industry with amenable finance to support active private sector operators and drive the critical mass that could propel the industry forward overtime without any necessary government intervention. As it is now, we have almost zero access to institutional finance, particularly from the CBN, which makes it virtually impossible for the metallic solid minerals miners and exporters to access structured finance at single digit rates. For instance, it is all over the media that the CBN has a N220 billion MSMEDF intervention, N500 billion export stimulation facility and all such funds but unknown to the general public and even the Presidency that the CBN in reality has got the commercial banks to sign off guarantees that these intervention funds and loans must not go bad, failure of which the commercial banks’ deposits with the CBN will be drawn to the loans amount that go bad. Therefore in practice, the CBN has not really intervened. The CBN must assist the banks to cover some risks. The more important thing is to ensure there is a genuine verification process to ensure that funds are disbursed to active and operating solid minerals operators in line with each operator’s track records.

    How can the government  unleash the potential of the solid minerals industry?

    Governments – at the centre and states – should rollout attractive business packages tailored specifically for the solid minerals sector. Incentives are a must for this sector to begin to contribute meaningfully to national development. When we talk about incentives, we don’t necessarily mean government should dole out money to the industry operators. We simply mean government policies for the sector should be reasonable, consistent and equitably fair with overriding objective of the nation’s  development. For instance, what has happened to the Export Expansion Grant (EEG) incentive? The government through the Nigerian Export Promotion Council (NEPC) says the scheme has been suspended. But to metallic solid mineral exporters; we say government is unfair by the sudden repeal of this incentive. How can a handful of companies who abused the incentive block the chances of numerous other exporters? The greater number of exporters shouldn’t bear the consequences for actions of some unpatriotic few. Good citizens deserve a chance and equal opportunity.

    The Minister of Solid Minerals Development has inaugurated a committee to develop a blueprint for the industry, what is your advice?

    Since the sector has become a national economic priority; it suffices to say that all things pertaining to it should be public and inclusive. The print media has a role to play here: the general public only saw two names-chairman of the 17-man committee – Prof. Ibrahim Garba; co-chaired by Prof. Siyan Malomo. In our company’s capacity as member of the Miners Association of Nigeria, our contributions have been communicated to the President, Miners Association of Nigeria, Alhaji Sani. The committee should be able to convoke a quick, holistic stakeholders’ meeting or conference to harvest the diverse opinion base of the industry.

    How has the foreign exchange squeeze affected operations in the mining sector?

    I would say the foreign exchange policy of the CBN needs review in order to further stimulate exports. For our company and indeed every responsible exporter of solid minerals; we remain profitable so long as there is an exchange rate between the dollar and naira. The parallel market rates simply reflect the pressure on the naira; and only exporters are insulated from the consequences of the exchange rate volatility.

    Against the backdrop of globalisation, what are the prospects of Nigerian exports in the global market?

    We must reposition our products to compete favorably in the global commodity markets. It is not enough to be richly endowed; we must aggressively pursue value addition across the whole value chain -from products source to final end users.

    What is AMEN’s role in the development of the solid minerals industry and the economy?

    We are at the forefront of putting the Nigerian metallic solid minerals on the global markets. We strike an acceptable trade methodology between the miners and the foreign buyers. We create jobs -both formal and informal for the economy. We are constantly seeking ways to improve the quality of products we exchange for the much desired foreign currencies. It is the exporters that mainly finance the operations of artisanal miners through advance payments and grants. No commercial bank will directly finance any artisanal miner. With these, you will see that we are the backbone of the mining industry.

    On access to finance, what are your experiences as individual exporters and as a group?

    Exporters have always been left to fend for themselves. Most of the metallic solid minerals exporters have little or no commercial bank support for their operations. Access to finance is still one singular most debilitating factor affecting growth of exporters.

    How can the government leverage on solid minerals to empower the citizenry?

    The Federal Government and state governments should develop empowerment programmes tailored to grant loans, take-off grants to start-ups willing to operate in the various solid minerals categories. Pairing exporters with proven track records with such start-ups to act as mentors, will be invaluable. This will not only have multiplier effect on job creations but also help to create a new generation of entrepreneurs that can help to grow the Nigerian economy. If well exploited, government can create at least 200,000 jobs per annum through a well-crafted empower-ment programmes for start-ups in 10 of the commercially viable solid minerals.

    Besides, existing mining and solid minerals export companies with year-on-year consistent and proven track records should be granted expansion facilities to scale up their operations. Such expansions would normally come with addition of more jobs.

     

     

  • Nigeria, four oil exporters hit by falling currency value, says OPEC

    Nigeria, four oil exporters hit by falling currency value, says OPEC

    Five oil exporting countries, including Nigeria,  Angola, Venezula,  Azerbaijan, and Russia are mostly affected by falling  currency value,  Organisation of Petroleum Exporting Countries (OPEC) has said.

    OPEC, in a paper detailing the impacts of recession on the global oil market, said the countries were picked among several others as having showing serious effects of fall in currency value.

    The body said depreciation in   the cuurency value is common in  the in oil exporting countries, adding that whether it is the Venezuelan bolívar, or the Russian rouble, low oil prices are wreaking havoc in oil exporting economies and on their national currencies.

    OPEC said: ‘’ In most cases, the scenario is similar: over the past decade, oil exporting countries used excessive revenues from oil to expand public services, or simply pursue populist policy in order to buy political stability. Once oil prices started to fall, the budgets did not shrink accordingly, which created a wide gap between the oil revenues and swelling fiscal demands.’’

    According to OPEC, governments were forced to devalue their national currencies in order to stem the rapid outflow of foreign reserves.

    ‘’An unwanted consequence is almost always the rise in inflation and household prices, along with a decline in living standards and stalled economic growth,’’ it added.

    OPEC gave a bit by bit accounts of impacts of falling curency value on the five countries thus.

     

    Nigeria

    Africa’s largest economy was hard hit by the falling oil prices. The national currency, the naira, dropped against the dollar by more than 50 per cent over the past year.

    On January 20, the Federal Government requested $3.5 billion loan from the International Monet6ary Fund(IMF) and the African development Bank to plug its $15billion budget  gap. The country’s oil revenues are expected to fall by 70 per cdent in 2016, while the hard currency reserves almost halved from $50billion to $28billion and the state’s emergncy fund went from $2 billion in 2009 to $2.3billion currently.

    Azerbaijan

    The former Soviet Republic is the first country to request a $4 billion emergency loan from the IMF and the World Bank in order to cover losses caused by low oil prices.

  • Exporters seek single digit interest rates

    Exporters seek single digit interest rates

    Exporters in Nigeria have said that for the country to successfully diverse its economy, the federal government need to initiate policies aimed at promoting single digit interest rates for them.

    The exporters listed access to funding, high interest rates and lack of development of Warri and Portharcourt ports as major challenges facing export.

    They spoke Thursday at a forum for bankers and exporters organised by the Nigerian Export Promotion Council (NEPC) in Benin, the Edo State capital.

    An exporter, Mrs. Rona Peters, said Nigerian banks preferred providing finances for businesses that ‎bring quick financial returns.

    Mrs. Peters explained that the development of Warri and Portharcourt ports would make trucking cheaper for exporters as well as decongest Lagos Ports.

    “Loans for agricultural processing should be single-digit. CBN gives nine per cent. They (banks) should make borrowing single-digit, if they want to promote exports. It is not for banks to get at single digit and give to the citizens at double digit.

    “They should bring it down; the banks should encourage us. NEPC has done well by bringing us together.‎ If you are into agricultural processing, it take time for you to stabilise. So, the banks need to be patient, grant the exporters low interest rates to promote export in Nigeria.”

    ‎Another participant, Abraham Momoh, decried the dearth of accessible port terminals in the South-South to cater for exporters in the region.

    Momoh, who said that functional ports would promote the movement of goods from the area of origin to their respective destination outside the country, called for programmes on capacity building for farmers, as primary producers in the agricultural sector.

    Chief Executive Officer of NEPC, Mr. Olusegun Awolowo, ‎attributed the challenge of funding to what he described at poor business understanding between the banks and exporters.

    Awolowo, who was represented by the Director of the Duties of the council, Olajide Mohammed, however, noted that the federal government was willing to bridge the gap, through relevant interventions, as non-oil export was key to economic growth.”

    Head of Nigeria Export and Import Bank in Lagos, Kalu Ugenyi, said literacy level on export ‘is low because a lot of people don’t want to go through the rigorous process of exporting products and you need a bit of exposure to get a partner outside the country.”

  • NEXIM loans exporters N107.48b in 24 Years

    The Nigerian Export Import Bank (NEXIM) says it has extended  N107.48 billion to exporters in 24 years and helped create 64,096 direct jobs.

    The Managing Director, NEXIM Bank, Mr Robert Orya, gave the facts when he received Benue State Governor Samuel Ortom in his office in Abuja.

    Orya said the bank facilitated foreign exchange generation to the tune of $32.64 billion in 24 years.

    NEXIM Bank’s interventions , Orya said, are targeted at four major sectors of the economy with huge developmental impact, namely manufacturing, agro processing, solid minerals and services.

    Since he assumed office in August 2009, Orya said, NEXIM has disbursed/guaranteed N47.18 billion to exporters. This amount, he said, “has been able to facilitate the creation of 27,917 direct jobs thus generating foreign exchange of $378.51 million annually within the period”.

    In Benue State, Orya said, the bank was ready to support the state  towards industrialisation giving the huge raw materials there.

    “NEXIM has supported various projects in Benue State with total disbursement of N4.14bn. Of this amount, N3.12bn or 78 per cent was disbursed between 2009 and 2015,” he added.

    Ortom said he was at NEXIM to ask the bank’s assistance to industrialise the state “owing to the fact that government alone does not have the needed funding to achieve that objective”.

    Ortom said: “Since the allocations from the Federal Government had been dwindling, there is need to look for other sources of funding projects that would create jobs and reduce the level of poverty among the people.

    “To create jobs and wealth for our people, we need to take advantage of agriculture and solid minerals and NEXIM bank’s role is vital in all of these.”

    However he told Orya that the people of Benue state expect a lot from NEXIM because “exporting raw materials is exporting jobs, opportunities and wealth and we don’t want to engage in such. My government has passion for what you are doing and I will create the conducive environment for you to assist us.”

     

  • Exporters protest CBN policy on FOREX

    Exporters protest CBN policy on FOREX

    The   Central Bank  of Nigeria(CBN)has  been  urged to ease foreign currency controls on  how agro exporters should  use their  foreign earnings   to encourage  more Nigerians  to  go  into  the  business.

    The  CBN  had  introduced some measures to  strengthen  foreign currency controls in what has been described as a desperate attempt to shore up the struggling local currency.

    Part  of this  was that  agro exporters would sell their  proceeds to banks  upon  repatriation of  foreign earnings.

    The  other  issue is that exporters cannot use  their  proceedings  to finance  non- transactions and that they  can only  sell their  foreign exchange to banks.

    The  President, National  Cashew Association of Nigeria (NCAN), Mr. Tola Faseru, said the measures limiting  exporters’ access to foreign exchange and restricted local transactions to the  banks would  not help the  industry  as inflows from foreign exchange deposits  would   dwindle due to the unwillingness of exporters to transfer their proceeds.

    He  noted that the directive restricting exporters from withdrawing foreign currency without prior proof that it is meant for exports  would negate the spirit of  the  liberation of  export  proceeds  in 2015.

    He  explained  that  it was not  fair  for the CBN to  force  exporters  to  repatriate  export proceeds  and  sell  to  the  banks  on  the  officials  when  the banks  will turn  back and sell  such to  traders on  black market  rate.

    While  it is important for  the  bank to  take steps  to  strengthen  the collection and repatriation of export proceeds, the President, Federation of Agriculture Association of Nigeria (FACAN), Dr Victor Iyama, said it was wrong  for  the CBN  to  determine  how  exporters  use  their  money  when  some  of them  were  not  using  the  Export Expansion Grant(EEG) to  fund  their  businesses.

  • Nurturing the next generation of agro exporters

    A strong agro exports sector has both economic and social benefits. For this reason, stakeholders met in Lagos to discuss ways to boost farmers’ income through agro exports. DANIEL ESSIET reports.

    Jeriedayaro Uwheraka, Chief Executive, Frijay Consult Inc, is an agro exporter.  She began her exports business in 2005, with smoked fish production. She later grew a variety of vegetable crops for export.

    Today, Mrs Uwheraka has turned vegetable export into a multi-million naira business. As a profitable venture,  some Nigerians are taking up vegetable export as business.

    In Lagos, alone, vegetables and other agro exports have transformed the standard of living of many entrepreneurs who  depend on staple crops for food and income.

    Uwheraka‘s experience is an example of how export is improving the income and productivity of small farmers. Every week, tonnes of vegetables are dispatched for export to Europe and the United States. Farmers diligence and timely harvestm help to produce premium crops of high quality. Vegetables have generated higher and more reliable profits than staple crops. The profits from the exports, according to these farmers, have helped them to solve their financial needs including payment for their children’s education and medical bills. Some said they have built houses and made a number of investments in their farms. Uwheraka explained that vegetables and horticultural production is cumbersome especially when done for the export market. Strict international standards relating to vegetables and agro exports, she said, compounds the challenges. For this reason, she said small farmers have to learn how to produce specific crops in accordance with international best practices. The concern of the Lagos State government  is that  there are very few smallholders involved in the nation’s fruit and vegetable exports. Besides,  very few smallholders are experienced in growing vegetables and horticultural crops for exports. A lot of them don’t know how to meet the requirements of exporters.

    Addressing a stakeholders workshop on agricultural produce export  organised by the Lagos State Agricultural Development Authority, its Programme Manager, Mr. Kayode Ashafa said Kenyan vegetables and horticultural exports are cited as a success story in African agriculture when Nigerian farmers can do better . With the  natural potential of the land to support cultivation of exportable fruit and vegetable, Nigerians can do better, he said.

    He said that in Kenya, vegetables and horticulture export is a big business with produce transported overnight in aircraft to reach Europe in the morning.

    His account describes the serial feats of coordination, discipline, productivity and manual labour, which make Kenyan horticulture competitive in global markets.

    Many of the lessons of Kenyan  agro exports success  can be applied here, he said.

    For him, Nigeria has an advantage because fruits and vegetables can be grown on a wide range of different types of conditions, from small farms with less than two hectares using family labour to large-scalecommercial farms with over 100 hectares and advanced technology.

    He observed that the number of smallholders producing for export is relatively small, adding  that Lagos State is ready to support more farmers to explore the European markets.

    According to him, agro exports is  an industry that if well developed  can transform the livelihoods of rural populations in Lagos.

    His conviction is based on the fact  that  flowers, fruit and vegetables from Africa occupy a big place in Europe and the livelihoods of hundreds of thousands of small farmers could be transformed by their hard-won stake in a such emerging global trade.

    He believes that thousands of farming families can been lifted out of poverty if Lagos emerged as a major player in the booming world trade in high-qualitycut flowers, vegetables and agro exports.

    According to him,  Lagos  State  has   a strong long-term interest in ensuring that agro exporters meet international standards by playing a pivotal role in supporting the growth of the  export industry, and enabling  local companies and producing households to sell the ever increasing volumes of agro exports abroad. To achieve that objective, he said the state would want farmers to increase production of high value produce but added that such activity should be done in full respect of the environment.

    He highlighted the challenges of the local export sector, which include: insufficient understanding of the domestic and international markets; logistical issues; and technical challenges such as application of new varieties.

    According to him, exports to highly demanding markets – where insistence on high-quality is paramount, have  increased  worldwide. He reiterated  the readiness of the government to work with   stakeholders to develop an export strategy that will benefit stakeholders across the sector, assist local farmers develop top-quality produce; improve support services – such as customs, quarantines, quality inspection, cooling systems, air and rail transportation and establishing a core group of model farmers and firms.

    Ashafa said the state wants to work with stakeholders to map out the next phase of the industry’s development. This involves finding ways to overcome several  new challenges.

    He said the state government is ready to train smallholders who   can produce a reliable supply of fresh vegetables to meet the stringent quality standards and short inventory period of supermarkets in Europe.

    Ashafa stressed the need for  small farmers to increase their bargaining position by organising themselves through groups. Farming groups enable smallholders to negotiate with a single voice, improving their bargaining position, he added. If one exporter does not offer a fair price, they can try another. Exporters negotiate directly with farming groups to agree on the exact quantities farmers will produce and the price per kilo.

    According to The Technical Adviser, Operations (Value Chain) Office of the Minister of Agriculture and Rural Development, Mrs Toyin Adetunji, the market opportunities offered growers by the European and  United States buyers are some of the most financially attractive but most exacting. However, to access the opportunity requires compliance with a strict regulatory framework of measures designed to ensure human and plant health. The measures, she noted, goes beyond the international requirements set under the sanitary phytosanitary and technical barriers to trade agreements.

    Mrs Adetunji  said many farmers are ill-equipped to take advantage of the opportunities provided by export trade. These include weak infrastructure, lack of capacity and the inability to meet technical product specifications and stringent requirements in terms of quality, safety, health and the environment. These impede their integration into global markets.

    She said farmers and agro exporters need to enhance compliance with technical standards to heighten consumer confidence and gain access to regional and global value chains.

    With the globalisation of production, supply and retailer chains,  Adetunji  noted that ensuring the safety and quality of agro produce is vital. Recent health concerns arising from bovine diseases, bird flu and various toxins entering the food chain, have led to stringent standards and conformity procedures, particularly in the area of agro-food exports.

    According  to her, exporting countries must acquire the capability to conform to requirements in terms of quality, safety, health and the environment if they are to participate fully in global markets.

    Adetunji said developing business in agro commodities represents great potential for growth and employment. The challenge, she noted, however, lies in effective and efficient exporting to the right markets. Capacity building, she stressed, is required along the value chain, from production to export.

    She said challenges are principally operational and practical. The importers want produce delivered in the agreed quality, quantity and price, on time, and to the agreed destination. These requirements have become more complex for producers and exporters over time and they now face additional criteria.

    Domestic challenges for producers include insufficient infrastructure from roads to collection centres, to packing houses and insufficient access to finance. The main difficulties lie with the quality and scarcity of inputs, post-harvest techniques, and pest control, with fruit fly control requiring effective regional cooperation.

    She said while farmers have  shown increasing interest in exploring opportunities in the export markets, it is important, they be encouraged to deepen their understanding of issues that characterise specific market demands.

    She said exporters have very specific quality requirements for crops   variety and so farmers need to work hard to meet international expectations.

    She stressed the need to have agronomists to provide on-farm training to help smallholders to meet international norms.

    The technical standards apply to processors and the rest of the food supply chain to farmers.

    Adetunji said that there are significant costs to be borne for such market access and these are usually paid by the supply chain participants.

    On the whole, it makes sense for more Nigerians to grow crops for export, she said but noted that farmers have to be trained in good agricultural practices, adapting their farming methods to European standards.

    The Head, Component Rural Institution Development, Lagos  State Agricultural Development Authority, Mrs Eunice Adewale said  the  authority was established to improve agricultural productivity, increase the  standard of living of farmers and promote sustainable food production in  a healthy environment through efficient extension service delivery.

    According  to her, the technical  service component of the authority links with research institute and universities for improved technologies on crop protection, livestock, fisheries, farm mechanisation, agro processing and women in agriculture for value addition.

    She said  the Lagos State Government is  ready to work with farmers  to boost exports but want them to register with the cooperative department of the Ministry of Agriculture.

     

  • ‘Naira depreciation affecting agro exporters’

    Continued  depreciation of Naira against the United States dollar is creating a challenging environment for agro exporters,  the  President, Association of Business Owners of Nigeria (ASBON), Dr Femi Egbesola, has  said.

    This is as a result  of  the increased costs of operation involving international shipping companies, which services are dominated in foreign currency.

    He said many exporters are facing challenges of logistics.

    In case of international shipments of agro commodities, he said they   need to pay the shipping charges in US dollars and hence, additional amount has to be paid for the same shipments, making export  business   less profitable for the companies.

    On the export front, he said Nigerians were competing with exporters from other countries  where their currencies  make the   price they  receive  for  their  produce competitive.

    Egbesola added, however, that  local exporters were faced with high freight costs denominated in foreign currencies, subsequently hitting their profit margins.

    Calling  on  the  Central Bank of  Nigeria(CBN)  to do  something  on   the value  of the  Naira, the  ASBON  chief  said  local  agro  exporters  stand  the  risk of losing international customers to competing exporters from other international markets.

    He  said agro exporters are  forced absorb the increase in freight charges and work with lower margins, adding  that  in   event of failure or capability to absorb such additional freight costs, the exporters and importers may avoid/abstain from international trade.

    With  the  government  encouraging  more Nigerians to get  into exports,  he noted,  that  the government  needs  to do  something  to boost  the  naira  as its continued  depreciation   could lead to an overall decline in trade volumes from Nigeria  that would prove to be challenging for the shipping and freight forwarding companies.

    For the shipping companies that focused on  industries, a decline in international trade volumes would result in idle capacity or shipments with not-fully loaded ships, resulting in lower revenues as well as higher operational costs per customer consignment.

    He called on the government to provide more incentives to boost agriculture production and promote   livelihood security for a large number of farm families.

    According  to him,  farm productivity and profitability will be greatly helped if there is  improved  support  to  reinvigorate  farming tradition as  it is  a means to sustainable livelihood.

  • ‘Naira depreciation affecting agro exporters’

    Continued  depreciation of Naira against the United States dollar is creating a challenging environment for agro exporters,  the  President, Association of Business Owners of Nigeria (ASBON), Dr Femi Egbesola, has  said.

    This is as a result  of  the increased costs of operation involving international shipping companies, which services are dominated in foreign currency.

    He said many exporters are facing challenges of logistics.

    In case of international shipments of agro commodities, he said they   need to pay the shipping charges in US dollars and hence, additional amount has to be paid for the same shipments, making export  business   less profitable for the companies.

    On the export front, he said Nigerians were competing with exporters from other countries  where their currencies  make the   price they  receive  for  their  produce competitive.

    Egbesola added, however, that  local exporters were faced with high freight costs denominated in foreign currencies, subsequently hitting their profit margins.

    Calling  on  the  Central Bank of  Nigeria(CBN)  to do  something  on   the value  of the  Naira, the  ASBON  chief  said  local  agro  exporters  stand  the  risk of losing international customers to competing exporters from other international markets.

    He  said agro exporters are  forced absorb the increase in freight charges and work with lower margins, adding  that  in   event of failure or capability to absorb such additional freight costs, the exporters and importers may avoid/abstain from international trade.

    With  the  government  encouraging  more Nigerians to get  into exports,  he noted,  that  the government  needs  to do  something  to boost  the  naira  as its continued  depreciation   could lead to an overall decline in trade volumes from Nigeria  that would prove to be challenging for the shipping and freight forwarding companies.

    For the shipping companies that focused on  industries, a decline in international trade volumes would result in idle capacity or shipments with not-fully loaded ships, resulting in lower revenues as well as higher operational costs per customer consignment.

    He called on the government to provide more incentives to boost agriculture production and promote   livelihood security for a large number of farm families.

    According  to him,  farm productivity and profitability will be greatly helped if there is  improved  support  to  reinvigorate  farming tradition as  it is  a means to sustainable livelihood.

  • Exporters’ scramble for Kenyan nut

    Over 450 macadamia farmers Cultivation for Kenyan nut may double due to its disease free and organicenvironment.Infact, over 450macadamia farmers  in Taita Taveta county are now increasing acreage under cultivation following a market deal with a foreign company that could see farmers sell the produce at double the price in the local market. This could open up cultivation of the nut in other areas as multinationals chase the highly valued Kenyan nut

    Under the umbrella of Taita Macadamia Farmers Association (TMFA), the farmers have signed a deal with Tencents African company to purchase macadamia at Sh70 per kilo.

    The farmers have expressed optimism in the deal and agreed to increase cultivation of the nut they had abandoned on poor pay. A kilo of the nuts retails at between Sh30-Sh35 in the local market even after tedious growing process that doesnt let a farmer recoup the expenses. But incentives like high buying price is enough to spur farmers into the lucrative venture as the appetite for the nut reaches fever pitch. One macadamia tree has the potential of producing 50 kilos.

    “We are guaranteed that Tencents Africa will give our farmers a reliable market since farmers will now have a reliable market which is a departure from the past where the market was unstructured and disjointed,” said Baldwin Mwangoji the chairman of TMFA. The farmer group has received the fairtrade certification that shows that their nuts abides by good agricultural practices and their farming preserves the environment. As a result of this demand for the nut by other international buyers has risen in the recent past to an extent that they cannot match.