The licensing of five Export Processing Terminals (EPTs) in 2022 by the Nigerian Ports Authority (NPA) was a game-changer in the nation’s drive for increased non-oil export and the export value chain which has grown in different dimensions.
Establishing and licensing these export processing terminals are critical to increasing Nigeria’s foreign exchange earnings and boosting intra-African trade.
The African Continental Free Trade Agreement (AfCFTA) seeks to create a $3.4 trillion economic bloc and end food insecurity in the continent.
Through the EPTs, Nigeria could maximize this advantage by creating an agricultural value chain hinged on production, processing, and export. Also, in line with the current administration’s commitment to diversifying the economy under the renewed hope agenda, EPTs are a timely innovation to boost exports in Nigeria.
The EPTs will also seek to address quality concerns over Nigeria’s export through the timely processing of export and onward delivery to the port.
Over the years, exports from Nigeria arriving at destination ports were rejected because they either expired or halved their shelf-life because of longer waiting time accessing the port and longer time spent on sea-going vessels.
Statistics show that exporters lose about N700m worth of exports annually due to rejection, an incidence that has been reduced.
The EPTs serve as a pre-gate, especially for Agro-exports, by sorting, processing, sealing, and certifying exports arriving at the terminals.
The five export processing terminals licensed are Diamondstar Port & Terminals Ltd, Ijora; Esslibra Terminal, Ikorodu; Sundial Global Trade & Service Ltd, Kirikiri; Bellington Cargo Ltd, Okokomaiko; and Tenzik Energy Ltd., Kirikiri Lighter Terminal.
Speaking at the inauguration of the DiamondStar terminal in Lagos, the managing director of NPA, Bello Koko, remarked that exports will now undergo sorting, processing, certification, and packaging at the EPTs. He reiterated the EPTs will “reduce the cost to the exporters, reduce the time that it takes to export these goods out, and then make the process faster and seamless, actually.”
Lately, Many freight forwarders are taking advantage of this infrastructure to grow their clientele base by showing interest in export business. It was also gathered that some investors have developed new export dedicated bonded terminals.
And the Mohammed Bello-Koko- led management of NPA has not rested on its oars to make exporters optimize the advantage of this infrastructure to the fullest to attract foreign exchange and diversify the economy.
Realizing that the export processes is far from being seamless, Bello-Koko urged the Nigeria Customs Service(NCS) to scrap all export seats at various commands of the service.
Bello-Koko, made this appeal recently when he hosted the Comptroller General of Customs, Adewale Adeniyi, and his management team at the NPA’s head office in Lagos.
Bello-Koko frowned at the situation where export processing terminals report to the export desk at the seaports.
He said collapsing the command export desk would ensure that the export processing terminals work optimally.
Bello-Koko said, “We have raised the issue of export. We have seen a tremendous increase in the percentage and quantity of export cargo and we appreciate that, but we still have a little problem because we have an issue with multiple export desks.
“The first time we met, I raised the need to find a way to collaborate and collapse the export desks at the ports so that an exporter will report to that export desk where you have the combined desk. That way, it will be easier to facilitate export cargoes instead of multiple desks that currently exist,” he said.
However, the new EPTs will ensure value addition to export goods by processing raw exports into semi-finished products and sorting and certifying them to meet international standards. The overall effect of value addition will not only open access to new markets but also remove restrictions on some of Nigeria’s agricultural products blacklisted in the international markets due to the proliferation of substandard products and residue of agrochemicals.
Have the EPTs had any impact on export drive since established?
According to the 2022 Q3 trade report by the National Bureau of Statistics, Nigeria recorded a negative trade balance quarter-on-quarter. Exports declined by 19.8 per cent to 5.93 trillion in the third quarter of 2022 from N7.4 trillion in the second quarter. However, data from the Nigerian Export Promotion Council (NEPC) reveals Nigeria’s non-oil sector hit $2.593 billion in the first half of 2022, representing a 62.37 percent increase from the $1.59 billion exported within the same period in 2021. These data show that non-oil export contribution to the economy is still less significant than oil export.
However, with concerted efforts and a continuous improvement of the supply chain, non-oil exports will contribute significantly to Nigeria’s economy soon.
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However, with concerted efforts and a continuous improvement of the supply chain, non-oil exports will contribute significantly to Nigeria’s economy soon.
To the stakeholders, the EPTs are timely and export trade-friendly. The Executive Secretary/CEO, Institute of Export Operations and Management(IEOM),Mr. Ofon Udofia could not agree less.
“It is a little bit easy in documentation using the terminals, because it is a private terminal, quite unlike what you have in the main port, hope you understand, where you make a lot of payment here and there so most of those things are reduced.”
The Director-General, African Centre for Supply Chain(ACSC), Dr. Obiora Madu applauded the EPTs initiative saying will reduce the bottlenecks associated with export processing inside the ports with customs and other agencies but expressed worry about the risk of making Nigerian exports uncompetitive with pricing since it is a private sector initiative. He therefore called for government’s regulation to meet sustain standards.
How has the EPTs added value to intra-African trade?
The overall effect of value addition will not only open access to new markets but also remove restrictions on some of Nigeria’s agricultural products blacklisted in the international markets
In November 2021, Nigeria ratified its membership in the AfCFTA, which aims to create a single continental market for goods and services. Establishing the EPTs will position Nigeria to benefit from intra-Africa free trade policies.
As a major producer of agricultural produce, the EPTs will further improve Nigeria’s export processing capacities and volume of exports. It is expected that the commencement of operations at all the EPTs will further increase the volume of (agro) export, estimated at $250B in revenue yearly, thereby leading to an increase in foreign inflow.
Obiora believes that the provision of the EPTs has presented Nigeria another chance to design strategies of taking advantage of too many international export opportunities to attract foreign exchange as well as grow the non-oil sector.
In his words: “AfCFTA is just a recent thing, AGOA has been there. AGOA, that is African Growth and Opportunities Act, which is a law that was signed by Bill Clinton, has been there for so many years now.
It’s on record that so many African countries are making a lot of progress through AGOA. Out of the figure you find against Nigeria’s name, 90 per cent of it is oil. AGOA was not meant for oil, it was for a whole lot of things. You have arts and crafts, you have textiles and apparels, which is where many African countries are really making a lot of progress. And then, also agro-export.
“There are 6,400 items allowed to come into America from sub-Saharan Africa, duty-free, quota-free. So it’s not opportunity that is the problem, it’s about we being serious. I recall that when we got the license, because there was a license for textiles and apparels, we celebrated it and immediately we finished the celebration, it died down and nobody talked about it again. Yeah, there are a few individual efforts in this, but there have been nothing from government to really push this very particular sector and others.
“Imagine when West African Trade Hub was set up by USAID. The head office was set up in Ghana. So with the kind of market we have and the opportunities that we have, I don’t know why we should be where we are right now.
“A one-stop export center as far as I’m concerned, doesn’t mean anything if the people there are not knowledgeable, patriotic and must do the right thing without looking back I’ll give you an example.
“Finland was having this kind of problem. Their President set up a presidential team for improvement of export processes. If you have a challenge, the president said that this team cannot write memo, that they must resolve all issues through telephone. I mean, when a president issues this kind of instruction, you know what that means.. So an exporter has an issue at the port, he just calls that committee, they will call the relevant people and things will happen immediately. So it’s not about setting up a one-stop export center that is the issue, it’s about doing the right things.
“Paying attention to services and one of the big services that we will benefit from, if we make things work on the AfCFTA, is freight forwarding. Freight forwarding is a big logistic service that we can make a lot of gains from in AfCFTA. Of course, not to talk about the logistic services like transportation and the rest of them.” He added.
Conscious of the need to make these facilities achieve the intended objectives, Bello-Koko- led leadership in NPA carries out monitoring of the centres to ensure they are optimally used.
