So far, the global impact of COVID-19 has placed adverse consequences on socio-economic and political well-being of the people. The effects can be gleaned from the burden of the protocols imposed to curb the spread of the deadly disease such as near total lockdown of the economy among other restrictive measures.
As it stands today, the death tolls across the world continues to rise, with cases of infected people lying critically ill from the pandemic with hunger and the threat of a global economic recession looming large.
Nigeria is not left out. It is this glaring reality that has prompted Institutions like Nigerian Export Promotion Council (NEPC) to embark on various non-oil export programmes to support the Federal government’s Economic Sustainability Plan to keep the Nigerian economy afloat.
The statement by Dr. Robert Schuler that “Tough Times Never Last, but Tough People Do”, appears to have given NEPC the impetus to renew its efforts at keeping the non-oil economy afloat despite the negative impact of the Coronavirus pandemic on the sector.
As the sole agency of the Federal Government responsible for the diversification of the economy from oil to non-oil, the Council’s effort to navigate the non-oil sector from the negative impact of the virus on the nation’s economy is, indeed, a step in the right direction.
Since the NEPC was established, 44 years ago, the Council through some intervention projects and programmes have rekindled the interest of Nigerians particularly the exporting community in maximizing the opportunities in the sector and, thereby, contributing significantly, to the country’s Gross Domestic Product (GDP).
“The Zero Oil Plan (ZOP) is part of a strategic initiative to boost supply of foreign exchange from non-oil sectors by driving growth in five key areas”, said Mr. Olusegun Awolowo, Executive Director/CEO, of NEPC.
These key areas, Awolowo noted are, concentration on generating $30 billion from 11 strategic products, review of Trade Agreement to prioritize Nigerian exports to 22 newly targeted export destinations, strengthening of Export Development Fund (EDF) scheme to enhance competitiveness of locally produced goods.
Others, he said are, domestic sourcing of products through the National Export Aggregator and exploring the comparative and competitive advantages of states through the One State One Product initiative (OSOP).
With dwindling oil revenues, no thanks to the disruption in the global economy due largely to global economic recession, and now COVID-19, the need to diversify the economy through generation of non-oil revenue, has more than ever before, increased the expectations of Nigerians from the Federal and States government to provide the much needed leadership that would guarantee economic prosperity for all.
This, in a nutshell, is the task before the Council, which seeks to spearhead the diversification of the economy by expanding and increasing non-oil export for sustainable and inclusive growth. These effort can be gleaned from the following:
The 22 ZOP Strategic Products
These are the products that could generate up to US$30 billion in foreign exchange a year: cotton, rice, leather, gold, soya, sugar, cocoa and petrochemicals. Others are fertilizer, palm oil, rubber, cement, tomato, banana and oranges. Also included are cashew, cassava, sesame, spices, ginger, shea butter and cowpea.
One-State One-Product (OSOP) Initiative
The OSOP takes cognizance of the country’s comparative advantage in terms of the vastness of its natural endowments as well as effort to diversify the nation’s revenue base using the Nigerian Industrial Revolution Plan (NIRP). OSOP is expected to shore-up the revenue of the 36 federating states, provide jobs as well as create wealth along the value chain by developing and promoting one product for export per state.
The National Committee on Export Promotion (NCEP)
With the inauguration of the Committee in September 2017 by His Excellency, Vice President Yemi Osinbajo, GCON, the Committee which is chaired by the Jigawa State Governor, His Excellency Muhammad Badaru Abubakar, drives the implementation of the ZOP through the following strategic programmes;
Establishment of an Export Trading Company of Nigeria through a Public-Private Partnership initiative, a domestic export warehouses/aggregation centres for exportable products and provision of an Anchor Borrower Programme for Exporters to support major off-takers from MSMEs for export.
Development of Priority Export Products
The Council is now focused on the promotion of Non Traditional Products (NTP) as a strategy to provide opportunities for would-be exporters to invest in the sector. There is no doubt that the attraction for Small and Medium Entrepreneurs (SMEs) in NTP remains quite strong due to their uniqueness and propensity to yield very high returns. Some of the areas under the NTP the Council intend to prioritize are:
• Promotion of local cuisine
• Sugar cane and food items
• Services – which includes: Information and communication technology (Business Process Outsourcing and Software), Financial Services (Banking and Finance) Educational Services (Knowledge-based activities) and Entertainment (Movies and Music
Zero to Export Capacity Building Programme
The aim of the Programme is to develop the capacity of the exporting community with a view to enhancing the performance of the sector. The intervention programme is in line with the economic diversification of the present administration. Since the inception of the programme in 2017, 17 classes of training have been executed in different locations in the country while over 500 participants have graduated from the programme.
Promotion of Export Products
This initiative is a collaborative effort to bring about economic empowerment of Nigerians with the aim of enabling SMEs export to the EU market – a function which is in line with the present Government’s policy on poverty reduction and job creation.
Three sectors were selected for promotion – Sesame Seed, Cocoa and Cashew nut as pilot products. The programme trained 60 NEPC staff comprising 30 Coaches/30 Officials and 24 MSME companies drawn from the Sesame Seed, Cocoa and Cashew sub-sectors. The emphasis is on training farmers, processors and exporters as a whole in the entire products value-chain with a view to improving productivity, including establishing a sustainable local processing capacity, for the purposes of exports
NEPC, NEXIM $1bn MoU
In 2018, at the Intra-African Trade Fair in Cairo, Egypt, the NEPC and Nigerian Export Import Bank (NEXIM) signed a Memorandum of Understanding (MOU) under the Nigeria-Africa Trade and Investment Promotion Programme (NATIPP), to support trade and investment flows between the country and other African countries. Under the agreement, AFREXIM Bank, is expected to provide $1 billion Line of Credit (LOC), which will be disbursed by NEXIM Bank to qualifying beneficiary projects and transactions in support of Intra-African Trade and Investments.
The fund among others provides support for growth of trade between Nigeria and other African countries with special emphasis on value addition, particularly in primary goods and commodities, with a view to enhancing local earnings and jobs creation.
Acceleration of Export Expansion Grant Claims
Following a review of the scheme, the Federal government designed a new post-shipment incentive payment system, the Export Credit Certificate (ECC), replacing the old Negotiable Duty Credit Certificate (NDCC) under the Export Expansion Grant (EEG) Scheme. Presently, the Council is making concerted effort to accelerate claims from exporters who secured export orders before the pandemic, and are making efforts to fulfill contractual obligations to their clients.
Impact of COVID-19 on Non-oil Export
In strategising to deploy non-oil export strategies, it is important to point out that the Coronavirus pandemic has further brought huge challenges to operators in the sector just as they continue to grapple with infrastructural problems like power outages, port congestion among other factors that increase the cost of doing business.
Of the most affected, agricultural products, especially cocoa is expected to lose over $100 million in exports while cashew exports are at a risk owing to the Vietnam Cashew Association’s guidance to enterprises within the country to carefully consider before importing raw cashew. Thus, it is likely there will be a fall in exports of close to $90 million for Nigerian cashew exporters.
The Way Forward
In spite of these challenges, it is cheering to note that the Council through strategic collaborations with critical stakeholders has consistently preferred solutions to mitigate the challenges of exporting. Only recently, the NEPC partnered Free on Board Global Logistics Limited (FOBGL) for Cargo export to the United Kingdom (UK), European Union (EU) countries and the United States in a proactive measure to save the economy from the COVID-19 pandemic and the crash in oil price.
This initiative in collaboration with Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Export Action Group is already serving as a relief to exporters to convey their products to these destinations.
Besides, a special discounted airfreight services from Lagos International Airport to London Heathrow Airport and transshipment road haulage services to 27 EU countries was recently introduced by the Council and FOGBL.
The NEPC’s “Impact Assessment and Policy Responses to the Coronavirus Pandemic on Agricultural Products” encapsulates all that is required to ensure the sector is better prepared to deal with major economic downturns.
Two factors that will help realise this objectives are diversification of products and value addition to the country’s major exportable products as it helps absorb excess supply resulting from low demand from traditional markets as well as ensures greater foreign exchange generation and employment for the country.
Economists have rightly lowered their estimates for global growth due to the outbreak. Nigerian economy is also predicted to reach low growth levels. Only recently, the Vice President Yomi Osinbajo-led Committee on Economic Sustainability Plan warned that about 39.4 million Nigerians might lose jobs at the end of 2020 due to the effect of Covid-19.
In spite of these negative impact on the economy, it also presents golden opportunities for Africa’s largest economy to pivot to a more sustainable and economically rewarding path for its over 200 million population.