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00:00The cost of importing goods into Nigeria is set to rise as the Nigerian Customs Service implements a new 4%
00:07charge on the free on-board value of imports.
00:10Meanwhile, the Central Bank of Nigeria has approved the inclusion of the CFA front on the Nigeria export proceeds form,
00:17allowing exporters to repatriate proceeds in the currency.
00:20Joining me now to discuss the potential effects of these decisions on Nigeria's import and export
00:26landscape is Bamadile Ayemipo, CEO, Three Team Pax Consultant. Bamadile, thank you for joining us today.
00:33Thank you very much for having me. Well, let's start with this 4% charge.
00:40It's been criticized, especially by the, just written a comment from the Lagos Chamber of Commerce and Industry,
00:46which has described it as quite abrupt and it has happened without any
00:51sensitization or structured sensitization
00:54efforts on the part of the Nigerian Customs Service. What are your thoughts on this charge?
01:00Very much in line, I mean, at this time where inflation is on the high side,
01:06cost of living crisis is hitting us in Nigeria.
01:09We are an import-dependent nation. We have to import a lot of things we have to use and at the same time
01:15we are having a 4% increase. 4% is a lot, actually.
01:19FOB price and custom sales for efficiency. I think, for me, I just think it's very insensitive
01:26considering the fact that an average business person is going to pass that cost down to everybody who is going to buy the product.
01:33So if I'm going to bring the inflation down, this is another thing we should be seeing at this time.
01:38Now, the Nigerian Customs Service has long been criticized as just
01:42being a revenue-generating agency or body and not a trade facilitator.
01:47Do you think that that is where the problem is? The focus is the problem?
01:55Yes, and it was interesting that the new CG said they would be a trade facilitation agency,
02:00which we expect them to be, but it looks as if they are trying to also...
02:04I was thinking that, look, there is comprehensive import supervision scheme. I think that's about 1%.
02:10I'm wondering why you are bringing additional costs to this.
02:13Because it looks like, really, you want to generate more revenue rather than facilitating trade and ensuring that
02:19trade transactions go very smoothly in Nigeria. So I think it's ill-timed, actually.
02:23For whatever reason, as is being given for this, I think there are other ways to go about this and reduce the cost.
02:28Because at the end of the day, we are going to pass this burden down to the consumer,
02:32and it's going to affect us, considering the fact that we are import-dependent.
02:36Just to mention here that, obviously, you've seen in the news that
02:40customs target for 2025 has been increased from 6.5 trillion to 12 trillion.
02:47So I guess there's also pressure on the customs service itself to bring in those funds.
02:54But let's talk about this other development with the Central Bank of Nigeria
02:57approving the CFA fund to be captured on the Nigerian export proceeds for the repatriation of export proceeds.
03:04What does this do for our exporters, and how significant is this?
03:09OK, let me make a comment on the last thing you said.
03:12Giving customs a target, for me, is a misnomer, actually.
03:16I mean, the amount of customs we make is dependent on imports that come in.
03:21So giving customs a target presupposes that some people are diverting the fund
03:25and we now want the fund to come to national cover, because it looks like it's a misnomer for me.
03:29But like you said, let's move on to the other conversation.
03:32Now, the CFA initiative, NAPC, said they were proponents of it
03:38and they've graciously, as CBN has approved, a good development
03:42to be able to get a lot of informal trade within West Africa to come in.
03:47But I don't see it as impacting a lot on FX rates in terms of value of Naira.
03:52But we might be able to see more increasing volume of export in Nigeria
04:00as a result of getting additional data into the total export volume.
04:06That's what I see happening. So I think it's a welcome development,
04:09even though, of course, there are people giving different opinions about it.
04:11But in my opinion, I've done trade in West Africa before
04:14and I know how difficult it is to get payment.
04:15I think it's a good development.
04:17Right, and I wanted you to also comment.
04:19I mean, speaking about trade volumes, the export volumes,
04:22the Nigeria Export Promotion Council is running a campaign titled
04:26Go Global, Go for Certification,
04:29a scheme where they're certifying about 400 or so SMEs
04:35to get them international certification
04:38and allowing them to access niche markets, according to the NAPC.
04:43What do you think about this scheme?
04:45And according to NAPC, over 800 SMEs will be certified under this initiative.
04:53Good initiative.
04:54What I'm not sure of is if it's going to help us to get the volume we're looking at.
04:58Remember, we need a lot of efforts coming into Nigeria.
05:01I feel we should do both.
05:02While we are supporting SMEs on one hand to be able to bring in the export
05:06without quality issue, we should also look at product that is giving us the volume
05:11and concentrate on it, like the last week I said, Akinlawie,
05:14about the fact that we need to increase the volume of product
05:19that will give us the volume we need to be able to increase efforts rate
05:23and reduce pressure on Nigeria.
05:27So I think we need to do both.
05:28While we are dealing with SMEs and supporting them on one hand,
05:31we should also have a strategy to drive up the volume
05:34by ensuring that the product that is giving us the numbers
05:37are giving the right support.
05:38Right. I mean, in that same vein, what would you recommend
05:41in terms of a starting point for us to boost those volumes?
05:46Let me give you a good example, Esther.
05:49Out of all the export products from Nigeria,
05:52soya beans demand is more than all the other products put together.
05:55Soya beans demand in the world is over 90 billion.
05:58China is the largest importer of soya beans, about 60% of global demand.
06:03Nigeria can form an alliance agreement with China
06:07and we support farmers to farm heavily soya beans.
06:11Soya beans are an edible crop.
06:13We can do two or three cycles in a year.
06:15And we can, with this, with agreement with China,
06:17massively export soya beans.
06:19And even if it's $5 billion, $10 billion,
06:22in addition to whatever it is that has been done,
06:24we will be able to drive up the volume of export proceeds.
06:27And at the end of the day, increase the value of Naira
06:32because of the pressure that will be relieved on Naira if we go this...
06:35And there are so many other products that can go in this direction
06:37that we can decide to focus on supporting all the initiatives required
06:41to increase the volume,
06:42having strategic partners with countries that will take it all from us.
06:46All right, we'll leave it there.
06:47Thank you, Bamdile, for that perspective.
06:49We appreciate your contribution on the show today.
06:51Bamdile Ayemibo, CEO of 3T Impacts Consulted.