Experts canvass trade diversification to tackle high cost of shipping in Nigeria
Maritime experts, who participated at the just concluded International Sea Trade and Investment Convention 2015, have identified the need to diversify the nation’s international trade, to move from being import driven to include export trade.
The experts, who pointed out that Nigerian economy and that of the entire African continent is currently import /mono-product based, said that this has been the case despite the fact that the continent is endowed with vast natural resources, coastline, and expanse of land and huge population which is critical for the diversification of trade in the continent.
According to the communiqué issued from the conference, the low volume of export cargo in Africa leads to high cost of shipping and there are vast trade opportunities in landlocked countries, which should not be neglected; ports in African countries are designed and sited for imports rather than export while the design and location of ports in Africa do not make room for export trade whereas in Western states, ports are designed purposely for export.
The communiqué further observed that there is need for effective government regulatory climate to ensure quality control, which was identified as the cornerstone of the production of indigenous goods and services.
While presenting a paper titled, “Providing Enabling Port Infrastructure to Enhance Trade,” Habib Abdullahi, managing director, Nigerian Ports Authority (NPA) called for the provision of adequate port infrastructure by both the Federal Government and the private sector to facilitate export activities through the nation’s seaports.
The NPA boss who was represented by Rufai Mohammed, general manager, Capital Project assured that the Authority would encourage any effort designed to change the trade orientation of the nation from import dependent to export.
A seaport, he noted, must have a robust infrastructural base to be competitive owing to the fact that major infrastructural improvements embarked upon by the Authority in Nigerian ports and harbor located in all the four pilotage districts, has helped to position the Nigerian port properly to meet the demand of all categories of port users for both imports and exports.
“Sustained efforts at providing the enabling port infrastructure has impacted on the overall port operational efficiency in Nigeria. The completed and on-going capital projects executed in the ports by the authority were meant to add efficiency to the nation’s seaports as well as to make the system competitive, effective and user friendly,” the NPA boss stated.
To drive export trade in Africa, the experts through the communiqué suggested that efficient regulatory standards is needed to monitor and compel compliance; sensitise and establish proper economic policies to encourage local manufacturers and ensure adequate transport logistics services as well as port infrastructure.
They further stated that there is need for integrated planning including the provision of rail systems, which should be made part of the criteria for the approval of new ports to avoid the mistakes of the past, even as littoral countries were advised not to neglect the trade opportunities offered by their neighbouring landlocked countries.
“Government should provide an effective regulatory climate that ensures quality control as the cornerstone of the production of indigenous goods and services. The government needs to engage the private sector during the formulation of policies to ensure sustenance, and also adopt an integrated planning approach for policy formulation and implementation,” the communiqué said.
Continuing: the communiqué emphasised that “There is need for African countries to add value to their export products and to reduce the rate at which raw materials are exported so as to generate more foreign exchange and create jobs for the teeming population.”
“To further advance the course of export, there is also need for standardisation of export commodities in line with international best practices. Regrettably, most exporters are unable manage and preserve the standard of their products as they do not have adequate knowledge of the existing international specifications,” the communiqué suggested.
In the area of funding for export trade, the experts through the communiqué observed that the commercial banks are not committed to funding of export trade, thus, the need for financial system to support export trade by allowing easy transfer of funds and robust insurance/export guarantee scheme. “Funding by banks should be product and sector specific at very low interest and government needs to work with banks to earmark the areas of trade requiring such funding.”
In order to strengthen the value of the naira, the communiqué noted that Nigeria must produce and export because there is an extent to which naira value can be defended. “Also, exporters should take advantage of the opportunity offered by Free Trade Zones (FTZ) to reduce cost of production and there is need to establish trade routes within Africa.”
UZOAMAKA ANAGOR-Ewuzie