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How To Start Export Business In Nigeria – Shehu Abdulkadir

How To Start Export Business In Nigeria - Shehu Abdulkadir

Shehu Abdulkadir

By Oyeniyi  Iwakun

Mr. Shehu Abdulkadir is the General Manager of Carmine Assayer Limited, Pre-shipment Inspection Agent (PIA) authorized by the Federal Government of Nigeria (FGN) to supervise export activities in South West zone of Nigeria. In this chat with MMS Plus reporter, Mr. Shehu took us through the processes and activities involved in exporting business in Nigeria through the eyes of the law.

Excerpts:

Can we meet you, sir and please tell us what your organization stands for?
My name is Shehu Abdulkadir, the General Manager of Carmine Assayer Limited. A Pre-Shipment Inspection Agent (PIA) authorized by the Federal Government of Nigeria (FGN) to inspect goods meant for export in the South Western part of Nigeria.
We inspect all exportable items so far they are items permitted by law for export. We are saddled with the responsibilities to access and be sure that goods meet the export standard before they are allowed to go out. The inspections are done in the areas of the price, quality and quantity before a Clean Certificate of Inspection (CCI) is issued to the exporter.
This Clean Certificate of Inspection (CCI) which we are authorized to issue is so important that you can’t export anything out of Nigeria without possessing it.  In fact, Officers of the Nigeria Customs Service (NSC) will not clear your goods for export at the ports or border stations unless it’s verified that you have been certified or issued with the CCI.

For how long has your organization been into this?
The Federal Government engaged us July 2015.

Are you the only agency legalized to do this job?
No! We aren’t the only one in the country. There are two other PIAs. The country is divided into three; North, South East/south south and South West. One handles the entire North, another South East/South South.

How much do you charge for each inspection activities?
Inspection is free. Government pays for our services.

With your experience so far, how would you appraise the Nigerian export activities?
You see, the Nigerian export activity is still growing just like the economy. We all know that Nigeria has been an import based economy. The establishment of Nigerian Supervision Scheme (NESS) is to reset people’s mind towards formal ways of doing export business so that foreign exchange earned will be beneficial to grow our economy. The local currency also is always strengthened and GDP improved when export proceeds are adequately repatriated.
There is a general notion that export business is always about Agricultural produce like Cocoa, sesame seeds, cashew nuts. But on the contrary, manufactured goods from Nigeria are doing well and even better in international market.
In fact, most of the items people complain we import are produced here also for export. Tooth pick, bottle water, tissue papers and the likes and even building materials produced in Nigeria are “hot cake” in many African countries.
Nigerian food items are also exported to Europe, America and Asia countries.
De-United foods industries limited, human hair (weavon and attachments) manufactured in Nigeria are being exported to United States of America (USA) while unknowingly our women are always freaked up with those imported from abroad like Brazil, India and others. Almost all Nigerian manufacturers of household products have markets in most African countries, Middle East and Europe. There are world class Tanning companies in Northern Nigeria and the Finished Leathers they produce from animal skins are the best in the world. They are toast of popular leather companies in Spain and Italy. How else can we be blessed as a nation?

But people don’t know about this?
Yes! This is because most of the exporters keep the business information out of public domain to avoid business espionage.

Why are these goods not allowed to flow in Nigeria; you know we are short of foods supply?
No! We are not short of foods supply in Nigeria…

But things are expensive…?
Is it the manufacturer’s fault? People are in business to make money. When you discover that you can make more money when you sell abroad, what do you do? Are you into business to feed your country men free of charge?   Let’s also imagine the difficulties these manufacturers go through in Nigeria. I think it is enough for them to look for better markets for their products. Above all, you earn more profit when you sell abroad and your government even gains more when the proceeds are well repatriated.

Aren’t some of these goods imported to Nigeria again?
Yes! Most ones that go out as raw materials will come back as finished goods and you may not know. Leathers exported to Italy come in as belt, shoes, caps and many other products. But the foreign exchange is already earned, so no loss at all in this case.

What are the processes involved in inspection and standards to be met before a product is allowed for export?
Okay! Let me explain the value chain to you. The National Exports Supervision Scheme (NESS) engaged five agencies of government for exporter.
The FGN through the Finance Ministry formulates the policy. The Central Bank of Nigeria (CBN) regulates the policy by appointing designated commercial banks, and also disseminates information to performing and potential exporters. National Export Promotions Council (NEPC) is saddled with the responsibilities of promoting exports via seminars and others. The PSI supervises and certifies cargo while the Nigerian Customs Service (NSC) enforces compliance.
The Bank will issue intending exporter the Nigerian Export Proceeds Form (NXP form) in centuplicate for completion in respect of each export transaction and after completion the NXP form is returned to the Bank. The bank shall register and endorse the NXP and retain the original copy while the remaining five copies shall be forwarded to us (Inspection Agents). As exporter, you retain a photocopy of NXP form and use the number as reference in dealing with CBN, NSC and Inspection Agents. The NXP form is to be utilized for six months subject to renewal to be approved by the Director of Trade and Exchange Department of CBN. Exporter shall also be required to pay NESS administrative charges of 0.5% of FOB value to a designated Bank. After NXP completion, the exporter shall proceed for the Request For Information (PFI) form collection from us as Inspection Agent to enable us get his (exporter’s) details, kind of goods he wants to export and the date he wants us to come for the inspection at any location of the goods storage or warehouse which we will keep in view. If we get to the warehouse as in the case of cocoa, we will take random samples for laboratory testing so as to confirm that it’s in tandem with the request made by the buyer. In a situation where we discover that it’s not, we will notify the exporter. Of course, that’s the quality inspection part of the exercise. On the quantity aspect, you have to show us the tonnage. If you are asked to submit twenty thousand (20,000) tons but, you only have five thousand (5000) tons at a go, we will count and document the five thousand (500) tons on ground. Finally, we are empowered to monitor pricing through prevailing international prices of items of export to discourage under invoicing and over pricing.
The exporter will be required to raise a final invoice with which the CCI will be issued. However, in case any of the requirements is not met, we will issue Non-negotiable Certificate of Inspection (NNCI) until the identified fault is rectified appropriately.

Are there rules limiting the kinds of goods to be exported?

Yes! The same way some goods are not allowed for importation, there are goods forbidden by law for export and they are  highlighted on the prohibition list made available by Federal Government as follows; Raw hides and skin, Timber (rough and sawn) Scrap metals, unprocessed rubber latex and rubber lumps.

How will you advise a prospective exporter who has identified raw materials in his community to go about export under this economic challenge?
It might not be easy but the first step is to search for a buyer because it’s better to get a buyer first before searching for the product if you want to start export business. For instance, if shear nut is common in your community and you are gathering them inside a warehouse without scouting for a buyer, you may end up selling to an exporter, although I often encourage a starter to sell to an established exporter in order to gather information, experience and resources before kicking off export business of his own but all the same you can still get a buyer abroad through the aid of NEPC because sometimes buyers call them to request for certain goods available in Nigeria and that is what Aulic is trying to do at the Export Trade Hub in Lagos International Trade Fair Complex, Lagos. So, I know sellers can be connected to buyers through the embassies, NACCIMA, NEPC and other relevant agencies.

On procedures to follow as a starter

When you want to export, the first point of call is the NEPC for registration where you will be given a certificate based on what you intend to export. Of course you must have had a company adequately registered with the Corporate Affairs Commission (CAC). You may then proceed to the Bank with your certificate and open a domiciliary (foreign or dollar) account. Exporting is a good business and I encourage people to go into it.

If after certifying a commodity, the buyer rejects it on allegations of fake or substandard, how would you handle such situation?
In business trust and honesty are essential. At times people betray the trust by going behind to do something contrary to the agreements made even after we must have done inspection, analyzed and certified the authenticity of the commodities.  Sometimes we found out that some exporters would go behind and stuff the containers with different items from what we have certified but these days we have taken it upon ourselves to observe the loading process and be sure that the right commodities are stuffed inside the containers before export.
On the other side, some buyers abroad aren’t sincere too. They know that what the exporter had sent was intact and perfect but they will still intentionally default (breach the contract) under the acclamation that the goods are substandard just to short-pay the exporter. In this case, a legal action could be instituted.
Nonetheless, in some cases there could be issues of damage of some parts of the goods due to delays at the ports, duration of export and other causes. Here, the insurance companies will have to mediate between the buyer and the seller because the goods must have been insured. Again there is always allowance emanating from agreements between the two parties as these factors are usually considered before export.

How do you now certify the finished products?
The Manufacturers Test Certificate or Report of Analysis is sufficient enough to certify the shipment.

What are the challenges with export of perishable goods?
Perishable goods especially yams are very difficult to export because they get spoilt in most cases in transit because of delays. Something that ordinarily should arrive its destination in less than two weeks might take two months or more thereby leaving the exporter at great loss. Yam tubers export is best done by air but it is very expensive and so it’s a major challenge.

How prepared are you for the Executive Order take off and the ease of doing business?
That’s why we are proud to be part of what Aulic Group is trying to do in Trade fair complex. Every relevant agency including the banks will be on ground to attend to you. As it is now, our company has offices in Akure, Ilesa, Ibadan, Abeokuta, Sagamu Ikorodu, Idiroko, Seme, and so many other places to ease stress. We also have dispatchers who deliver necessary documents to the appropriate places like Customs commands in good time.
The CBN is also currently working on the online platform where all transactions would be made online just like in the Comprehensive Import Supervision Scheme (CISS). Every documents and communications will be transmitted online. All the exporter is required to do is to notify us on when we should come for the physical inspection and thereafter, our reports and certifications will also be transmitted online. CBN will launch the platform in due course.

Do you have any remark or advice to government and the people?
All Government agencies involved are up and doing in this regards. NEPC is all over the place encouraging potential Exporters and rewarding performing Exporters with different types of grants to boost their businesses.
Customs is there to enforce the order “No CCI NO PASSAGE OF CARGO” So what else? Maybe government should create more enabling environment for export.

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