CBN’s trade monitoring system and Nigeria’s non-oil exports

The Central Bank of Nigeria (CBN) recently announced that it would launch a Trade Monitoring System (TRMS) in October. TRMS is an automated system that will reduce the length of time required to process export documents from one week to one day. According to the apex bank, the system is being introduced to support efforts at boosting non-oil exports of goods and services in the country.

This was part of the CBN’s five-year policy direction unfolded recently by the CBN governor, Mr. Godwin Emefiele. The five-year growth plan enunciates policy measures that will boost the confidence of investors, encourage local production and enhance non-oil exports, maintain price stability and trigger massive job creation.

Under the five-year policy direction, the CBN also plans to scale up the Anchor Borrowers Programme, and embark on massive funding support of 10 commodities that consume a lot of foreign exchange to import. All this, is in a bid to conserve foreign exchange, grow external reserves, reduce food prices and create job opportunities.

Indeed, these are lofty ideals that should be commended and implemented with vigour. However, while the need to avoid unnecessary delays in the processing of export documents cannot be controverted, the problem of exporting Nigeria’s products is quite critical and much more demanding than just reducing the time of processing the export documents.

As a matter of fact, the exports have to be there in the first place before one can talk about processing the documents. A situation, for instance, where the export products cannot be successfully transported to the ports as a result of poor transportation system and bad road network makes nonsense of automated processing system.

Early this year, the nation was jolted by reports of export products trapped for weeks at the notorious Apapa traffic gridlock. The products affected were cocoa, cocoa butter and cake, and cashew nuts. These export products could not access the ports because of congested traffic caused by bad roads and poor traffic management. 50,000 tons of cashew nuts reportedly worth $300 million, which would have translated to immediate export proceeds for the country, were held up on the port access roads for several weeks.

Similarly, 31,760 tons of cocoa and 1,760 tons of cocoa butter and cake were stranded on the same port access roads within the same period. It is indeed sad that the horrible state of the ports access roads has been delaying exporters from taking their products to the ports for export. These products are either locked down in the traffic or are stored in transit warehouses in Lagos.

The President of Nigeria Cashew Exporters Association, Tola Fasheru said in March that fruits from last year’s harvest that should have been exported by January were still in containers on trucks waiting to enter the ports. Thus, one can see that this kind of avoidable shipping delay is greater than the processing of export documents.

Besides, there are other hindrances the government and the central bank should direct attention to if the country is to realize its set objectives in the non-oil export sector. One of such areas is funding. Leather workers in the country who have been raking in a lot of foreign exchange for the country have been crying for funds to upgrade their products to international standards. The Association of Leather and Allied Industrialists (ALAI) said earlier in the year that N1 billion was needed for this purpose. This followed the loss of a huge chunk of the international market as a result of the EU ban on Nigeria’s leather exports. The association has been accusing the government of not coming out with strong support for the industry.

ALAI said the entire value chain of the leather sector is in need of overhaul, right from the rearing of livestock to the tanneries and the leather factories. All these are areas that should attract the attention of government and the CBN.

In the same vein, miners of solid minerals have been crying for financial assistance in order to carry out their business. They lament that lack of funds and inadequate mining equipment have been hampering their operations, accusing commercial banks of frustrating their efforts to access SMEs fund. The banks do this by imposing the same conditions as normal bank loans and delaying the process for several months leading to frustration. This and the plea of leather works exporters deserve the interest and action of Emefiele and the CBN.

It is rather unfortunate that every government in power always expresses its preparedness to tackle the impediments confronting the export sector of the economy, yet these problems persist, and even continue to loom larger. Put together, these problems include inadequate and decaying infrastructures, financing constraints, fraudulent and inefficient implementation of export incentives and support programmes, overregulation, underdeveloped regional and sub-regional markets, policy instability, capital flight, marketing and pricing problems.

For the CBN to realize its target of raking in $12 billion in export revenue for the nation by 2023, there must be a critical and holistic look at the country’s export policies. Goals must be set and all the impediments assiduously tackled. This will entail bringing together all the relevant government ministries and agencies that have something to do with exports such as the Ministry of Agriculture, Ministry of Solid Minerals, Nigeria Immigration Service, Nigeria Customs Service and the Ministry of Foreign Affairs. The business of non-oil exports should not be seen as the exclusive responsibility of the Nigeria Export Promotion Council (NEPC) and the Ministry of Trade and Investment.

The problem faced by small-scale farmers in the rural areas must also be dealt with. This group of farmers suffers from poor market arrangement, poor communication network and low access to logistics and inputs support. They also suffer tremendously from post-harvest losses because of lack of warehouses and storage facilities. Their woes are further compounded by inadequate or absence of rural feeder roads for the evacuation of their produce. Then there is the vexed issue of the rejection and, sometimes, outright ban of Nigerian export products by the international community on account of poor quality. This should be decisively tackled by government and all the relevant agencies including the central bank. It is shameful for Nigerian exports to be treated with disdain at the international market.

One can recall that in June 2015, the European Union (EU) banned the importation of Nigeria’s dried beans on the ground that the product contained high level pesticide considered dangerous to human health. The ban, which was for an initial period of six months, was extended to three years. The EU accused Nigeria of not doing enough to get the ban lifted.

It said the duration of the importation prohibition was extended for three years to allow Nigeria implement the appropriate risk-management measures and provide required guarantees for the safety of its beans. Have all these been done? It is expected that by now, all the mistakes should have been corrected. These are issues and challenges that should attract the interest of the Central Bank and Emefiele.

To avoid shipping delays caused by congested Apapa roads, we lend our voice to the call for an effective traffic management system as well as urgent but comprehensive repair of the port access roads. Government should also hasten to provide truck parks in and around Apapa to take idle trucks off the road.

We believe that the CBN under the leadership of Emefiele means well for the economy of this country; hence it has thought it fit to remove the palpable lack of synergy among the players involved in the processing of export documents through the planned trade monitoring system. However, the bank should do more than this if its overall goal of promoting non-oil exports and making Nigeria to rake in $12 billion non-oil exports revenue by 2023 is to be realized.