Nigerian exporters to ECOWAS hit by poor infrastructure, high cost of trade permits

Nigerian exporters to the Economic Community of West African States (ECOWAS) are hard hit by poor infrastructure, insecurity and high cost of obtaining trade permits such as the Trade Liberalisation Scheme (ETLS).

A report obtained from the Manufacturers Association of Nigeria (MAN) says that Nigerian exports to the 14 other countries of ECOWAS were stifled in the first six months of 2016 on the back of these challenges, including currency differences as well as poor transport system and language barriers.

“The major export challenges in the period, especially within the ECOWAS region, are currency differences, insecurity, poor transportation and communication infrastructure, difficulty and high cost of obtaining trade permits such as ECOWAS Trade Liberalisation Scheme (ETLS), tariff differential and language differences,” the MAN report says.

The report, encapsulated in the January to June 2016 Economic Review,  shows that export of finished products was low between January and June of 2016 as the  majority of manufacturing exporters   (37 per cent) exported  goods  worth less than N20 million.  Also, 17 per cent exported goods worth between N20 million and N40 million within the period.

Speaking with Real Sector Watch recently, Ede Dafinone, chairman, Manufacturers Association of Nigeria Export Group (MANEG), had identified cost of power, security and infrastructure as major factors responsible for un-competitiveness of the country’s export products.

“The cost of power, whether it is from distribution companies (DisCos) or from private power generated in terms of diesel is still a significant burden on companies. There are also costs of security and others. The export community had problems in the last few months trying to get value for their exports,” Dafinone, newly elected chairman of MANEG and CEO of Sapele Integrated Industries Limited, had said.

According to Dafinone, the Nigerian exporters were also hit by inability to have access to their proceeds at the going market rate on the back of changing monetary policy rules that had dented their confidence.

He said the Export Expansion Grant (EEG), suspended in 2013 and reinstated late last year, was introduced to redress some imbalance in costing, to compensate Nigerian exporters for the poor infrastructure in terms of roads and power and help exporters become more competitive in production of their goods.

ODINAKA ANUDU