Awolowo: Nigeria Must Develop Alternative Sources of Forex Revenue

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The Chief Executive Officer of Nigerian Export Promotion Council (NEPC), Segun Awolowo, in this interview, among other issues, speaks on the need to boost activities in the country’s non-oil sector. Jonathan Eze presents the excerpts:

How would you access Nigerian outing at the recently held Intra African Trade Fair?
It was to showcase to the world that Nigeria is ready for business, so we had a very good message starting with our Minister, Dr. Okechukwu Enelamah, in his goodwill message demonstrating to Africa that Nigeria is ready for business especially with the reforms we are carrying on the Ease of Doing Business (EOB). I am also elated with the fact that Vice President Yemi Osinbajo was able to grace the occasion and we also had the goodwill message from President Muhammadu Buhari. We also had a very good message too from the African Trade Commissioner who represented the African Union and of course to cap it all the presentation of the documentary which was masterly packaged showcasing the progress we had made as a country and the need for the world to think Nigeria as a destination of choice.

It was indeed a fantastic event, which also enabled us showcase our culture laced in dynamic energy and our creative industry brought to fore the fact that Nigeria is not just about oil at all and that’s what we demonstrated. The musical performances by Dbanj, Tuface Idibia, Omawunmi and the Kalakuta crew were just few among what Nigeria exported to Egypt that delighted Africans and the world. ‎The exhibitors we spoke with, many of them expressed satisfaction with the role Nigeria Export Promotion Council (NEPC) played in bringing them to Cairo, Egypt.

We had so many products as you have seen yourself. So in total, we had about 140 companies and I think we were the biggest by far in the trade fair event. Even Egypt, the host country could not match us, a pointer to the fact that Nigeria of course is the biggest economy in Africa and that we have so much to offer. We must continue to embark on this kind of trade mission in order to promote our businesses particularly the SMEs that have no international partners outside, the big companies are well connected so they really don’t need anything, apart from the companies that clustered with us, clustered with the Bank of Industry, we had independent companies all from Nigeria all around the exhibition halls that was just amazing so we just must continue showing them what the competition is.

You also know that it wasn’t a seller’s market and not a buyers’ market. It was basically a trade fair and in trade show, you come, you show what you have and at the end of it, you get some business meetings, people that come around get to say oh! You have this in Nigeria then they start talking to you and make the connection, for trade really is building trust so this set a platform for trust to be built and then you can go back home scale up and start your export.

What about the export trading company you proposed to Central Bank of Nigeria?
‎Yes, I had the honour of addressing the Bankers committee chaired by the Governor of Central Bank (CBN) and it was interesting the topic they chose which had to do with non-oil export and we had been looking for that opportunity to engage them and we got it and it was a brilliant one. We had the Managing Director of all the banks in Nigeria and the CBN Governor in attendance. We put it out to them. One, we were looking at the Anchor Borrowers Programme for export and we were also looking at establishing an export trading company, not in the mood of the old boards, commodity board and the idea is to have a powerful company.

So, at the end of the meeting, the CBN Governor constituted a committee made up of NEPC, NEXIM and the Business Development department of the CBN and I think with two other commercial banks. The Committee is chaired by the MD of UBA. So, we have till February to come up with what will work and that’s perfect for us because before, we were working with the NEC committee on export promotion which the CBN is also a member of, but we were working in isolation. But now we can easily get a commercialised private sector, I think that will help us.

We recently had a problem with our cashew in Vietnam, we couldn’t sell off. I think we had 30,000 metric tonnes that we couldn’t sell because they crashed the price. They had some issues in Vietnam, it had nothing to do with us, nothing to do with quality, everything was perfect but they had some crisis that they couldn’t receive funding there again so the price had to crash, we knew because cashew was so good then and we knew it will get to a stage where the price would have to fall, we knew the trade zone we had i think was ‎$1,100 but it was trading at $1,800 and people made money.

But Vietnamese could not absorb it again so we had a crisis but low and behold, we now set up a meeting to meet up with the Vietnamese in Dubai. Nigeria, Côte d’Ivoire, Tanzania, and other countries that deal in cashew, so we all went to the meeting then we realised that Côte d’Ivoire was stocked with 500 metric tonnes that they couldn’t offload, ours was just 30,000, when you add that we are looking at $30 million or so. That, an export trading company can take up so the cashew farmer doesn’t have to suffer. If the export company is heavily funded, they can afford the risk mitigation. Meanwhile, our farmers can’t sell off 30,000 metric tonnes.

So, are they going to grow it again next year If they can’t sell off? So we have to start looking into it and what is going to happen again is that we are able to buy off then we can start processing, there is much to process. We can encourage processing so the company can buy more processing machines and am happy that AFREXIM Bank is thinking along this line which is perfect for us because if u really want to compete, you have to scale up your productivity. ‎ For instance, if you want to be a major player in Cocoa and you are still producing 250,000 tonnes, how can you make it?

With the MoU you signed with Afreximbank for export promotion programme, what is for small businesses?
The agreement is major because you are able to loan money at a subsidised rate and there is even money to loan. This is not a grant, in fact the modern world is frowning at grants, and grants are for training and capacity development, not for funding of companies. You must structure your business to be profitable, if it is not profitable then, leave it, go into something else. Don’t wait all year round for grant. Businesses don’t work that way. What Afreximbank is doing is to promote intra-African trade which we all know is the lowest continental trade in the world, we don’t just trade with ourselves so in order to promote that, there is a grant. Afreximbank says let’s give you $1bilion you can use for export companies, scale up production, improve quality, have better packaging, that’s what the money is meant for. ‎So companies that are looking good in scaling up will be pushed towards that. They can borrow money at a very low rate and then, the money is available so they can scale up production.

You talked about increasing trade volume by N10 billion per year in the next seven years how do you hope to achieve this?
You are talking about my zero oil plan. What we did is that, we gave you total of about 22 sectors where we think Nigeria must scale up production in order to achieve this figures that we are talking about. We have seen another funny play on oil prices and this is exactly what happened three years ago and we are going back to that. If we have 90 per cent of our foreign exchange in oil, and oil prices go down we will not have foreign exchange so if we do not provide an alternate source of foreign exchange then we are going to be in trouble and that’s why we said Nigeria must scale up production.

These are the areas that are thriving, these are the areas you can earn huge foreign exchange. We picked Petrochemical for example and you see Alhaji Aliko Dangote that has a petrochemical plant, when that comes on stream, we are going to be generating maybe in the first year some $3bilion and it is going to increase. Our total non- oil export now is over $2 billion dollars. So, on one product you rake in $3 billion and later $10 billion and that’s how to get there.