For Nigeria to maximise recent reforms embarked upon by the federal government to increase the country’s earnings from non-oil export, the government should improve port logistics, access to finance and its government agencies.
This was disclosed in a report by 3T Impex Consulting, which identified poor port logistics, access to finance and as the greatest challenges hindering ecports.
The first edition of the report provided insights into what needs to be done by the government, banks, and other stakeholders in the industry to fix the problems.
While presenting the maiden report on Annual Trade Finance Survey 2022 in Nigeria in Lagos, Lead Consultant, 3T Impex Consulting, Dr. Bamidele Ayemibo, said the county will continue to fail to meet her export target unless Logistics hindering it are urgently resolved.
He said banks should be deliberate in providing Forex to those in the export sector for the country to move away from being an import dependent economy.
He added that it is sad that 94 per cent of export financing request were rejected by banks in the country as shown in the report.
Africa, he added, represents 2.5 five percent of the total export in the world, stressing the need for the country, “to put up necessary sanctions to remove all bottlenecks Nigerians face at the port trying to export their products abroad.”
He noted that the objectives of the survey was to identify the challenges of export business in Nigeria, knowing the level of export trade finance rejection and understanding the reasons for export trade finance rejection.
He maintained that the report also seeks to understand the features that characterized approved export trade finance requests and identify the challenges faced by exporters in getting their export trade finance requests approved.
He stressed that some of the recommendations made by the survey will address the identified challenges associated with export trade finance rejection with the positive effect of reducing the trade finance gap.
According to him, some of the findings showed that “42 per cent of rejected export finance requests were done without any reason given to the exporters, “21 percent of the rejected export financing requests were based on lack or inadequate collateral security and only 11 percent of exporters received approval for their export financing request.
“Other are 57 per cent of exporters identified access to export finance, port logistics and delays by government agencies at the port as major challenges hindering export growth, 22 per cent of export financing requests were approved within one month of application.59 percent of exporters were attracted to a bank that have support services for exporters and 94 per cent of exporters experienced rejection of their financing requests by Nigerian banks.”
The recommendations in the report captured what the banks, Ministries Departments and Agencies of (MDA’s) and exporters should consider doing in order to grow the non-oil export volume of the country.
“The Nigerian banks need to become more creative in export credit risk assessment. They need to avoid using old knowledge of general credit risk assessment for solving present-day problems of export business financing. They need to avoid insisting on tangible collaterals and begin to accept intangible collaterals like trade finance instruments as security. This will require Nigerian banks to engage in aggressive capacity building programmes for their staff, “t stated.