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Expert outlines export potentials of agric

By on March 22, 2011

A NIGERIAN with years of experience in private sector-led export promotion has described the place of Nigeria in export market, particularly in agricultural export, saying, “in terms of potentials, only few countries in the world can match Nigeria’s endowment.”

The chief executive of Lagos-based Multimix Export Academy, Mr. Obiora Madu, told The Guardian that “from economic point of view, we have a lot of comparative advantages, but in a globalised world we are in now, we are not competitive. As a result, all the potentials we have cannot ‘better’ the economy and change our lives.”

According Madu, “the potentials are in every sector. In agriculture in 1960, agriculture was generating 93 per cent of foreign exchange. Today, it is not generating up to five per cent. We have to do something to become more competitive.”

He indicated that agriculture did not stand alone as a sector of the economy, but “infrastructure is needed.” He said, “if the rail system works, I will be better off if I bring ginger from Kafanchan to Lagos than through trailer.”

The roads, Madu argued, “also have their own problems. Power is also a problem. The other thing we have to do is that we need an attitudinal change because exporting has become knowledge-intensive.”

On why agriculture is not attractive now, Madu observed that most Nigeria’s agro-produce sell at a discount, “not because they are of lower quality than those of the other countries, but largely because of our attitude. For example, if it takes five days for normal drying of cocoa beans, you deliberately do it in two or three days, resulting in poor quality product which is not a problem to you alone but is also a national problem.”

On logistics, Madu reasoned, “since it is not possible for individuals to tar roads and build railway system, individuals can build knowledge on logistics.” He added, “everybody believes Nigeria’s railway system is dead, but Oando now trucks oil to the north through railway.”

A good knowledge on where to save money, he added, was important. “At which point in the commodity chain can money be saved?” He asked rather rhetorically, answering that “the infrastructure is not going to come overnight. Therefore, the knowledge of logistics and supply chain management is essential for any company to be competitive whether in import or export or even manufacturing.”

On product quality, he said that there was need for massive campaign and education. “If you don’t teach them, don’t blame them,” he said, complaining, “part of our problems is our oil (petrol). We have short-term attitude to business. Our long term now is three months.” He expressed belief, “if people appreciate the problem they are taking the country through, they will change.” He therefore suggested, “we need to have awareness programmes and campaigns so that people will understand what to do.”

Madu was not impressed at the wrong disposition of many business people to integrity.

“We have been identified as people who don’t take contracts seriously,” he lamented, expressing optimism, “if, gradually, people get to understand and do the right thing, we will be wiping off the problems we are facing.”

According to him, “it is a serious problem in the international business once you say you are a Nigerian. There are a lot of Nigerian businesses that are serious but bad news fly faster.”

On whether we are making the most of our ports, Madu said: “We have about three in Lagos, two in Warri, one in Port Harcourt and one in Calabar. Part of the problem is (capacity) utilisation. For example, good cocoa from Ikom has to come to Lagos when it could just have crossed to Calabar. Our ports are shallow, limiting the size of vessels that can come to our biggest ports. The ports need to be dredged. Ports have accounted for the prosperity of many nations. We are centrally located to have been a hub to west and central Africa.”


He reckoned, “nations cannot prosper if they don’t have efficient ports,” and alluded to a case in which he said, “part of the efficiency accounts for the growth of Mauritius.”

Despite what Madu regarded as rich endowment of Nigeria, “with the best quality of agro-produce from north to south and east to west,” his observation remained “how they come from the north and what they encounter on the road is a different thing.” He expressed disappointment that one of “our products, which would have created serious multiplier effects, if we have done things right, is cassava. We produce cassava only to realise that there are no places where they can be processed.”

He observed, “there are no processing plants. So, people are now stuck. Other planting seasons, people will look elsewhere and we will have no cassava.”

Madu pointed out, “policy inconsistency makes it impossible for people to invest their money in a long term basis,” adding, “incentives could be reasons for people to invest, but when midway into investment, incentives are removed, you are wiped off.” In government circles, he noted, “incentives are seen as dash. They don’t look at the multiplier effects. In other countries, you have basket of incentives, agree there could be abuse, but you don’t throw away the baby with the bath water. The issue of incentives is one way to make products competitive.”

Nigeria, Madu said, “has potentials to be a great nation but utilisation of the potentials is a different ball game.” He advised the president of the country “to have a one-point agenda to upgrade the infrastructure of this country if we want to benefit from the potentials God has placed at our disposal. We need to embark on an export-led poverty alleviation programme. This idea of giving people tricycle in the name of poverty alleviation will not lead us any where.”

He insisted, “agriculture remains the way out because of the impact it will have on employment and foreign exchange generation. From the farm to the export market, the value chain is so long to accommodate a lot of the unemployed citizens of this country.”

Another aspect to concentrate on, he added, “is in business process outsourcing which is placing many developing countries on the world map, India being the biggest beneficiary. This is the greatest opportunity for youth employment, which this nation needs now more than ever before. Countries like Kenya, Mauritius, Egypt, Ghana and South Africa are the greatest beneficiaries in Africa today. Meanwhile, Nigeria has everything it takes to be the best destination for offshore services from Europe and America.”

He said that free trade zones had contributed immensely to the development of many nations and Nigeria should not be a different. “Dubai has shown an example of what a nation can make out of nothing. In spite of the fact that Dubai has oil, they took a decision to put together the biggest free trade zone in the world. Tinapa was to be a big threat to Dubai but after spending so much, there is still practically no action in Tinapa. Dubai saw Tinapa as a major competitor. While we dilly-dally on how to make Tinapa work, they (Dubai) moved over to Dakar and Ghana. Dubai is managing 52 ports in the world. So, why can’t we give them one to manage in Nigeria?”

“In Lagos there is Lekki Free zone, which is 100 per cent private. There is also the Lagos free zone, which is government-owned. We need to move fast to reap from the huge investment made in these facilities.”

Madu was not impressed with the official outlook on agro-commodities. Said he, “all policies on commodity and exports have been everything but strategic. We had the opportunity to develop our economy with oil proceeds but we missed it. The decision of Dubai to build the biggest Free Trade Zone in the world, despite their oil, was strategic. In Nigeria, everything is short-term. Exporting is a process, not just a transaction.”

He made reference to Kwara State government, which according to him was setting an example. “Soybean is a product that Japan used to import in large quantity. They got into some countries, entered into contract farming and started to import from there. In sesame, what have we done? We have the capacity to increase our export volume in sesame to take advantage of existing gaps in the market. Nigeria is the highest producer of many commodities like shea nut. However Ghana and Burkina Faso are the countries on the export list. We need to have strategies for each commodity to fully realise the benefit from the potentials.”

Source : Guardian

One Comment

  1. Mr. Lai Adeyemi

    September 4, 2011 at 5:02 pm