For government to get the export sector right, the exchange rate must be look into, this formed the opinion of the chief executive officer of Simplified Corporate Logistics (SCL), Mr. Nduka Udeh in an interview with OLUSHOLA BELLO.
In this era of diversification, in what areas do you think logistics will contribute to the economy?
Logistics is key to everything. If you make goods how do you bring it in or out? There are a lot of things to be done. Are our road infrastructures in place? Do we have storage location in most of these places? To put all these in place government needs to work with the private sector. They should stop working with the multinational, multibillionaire naira companies who have the money to do these.
They should work with the Small and Medium Businesses (SMBs). In any economy, those that grow the economy are the small and medium businesses that employ five to 100 people. When you look at the distribution of labour in the economy you will see that we have a whole lot of them. These are the people they need to consider.
Logistics play a key role. If you cannot get your goods out, then it is a waste. Government has to stimulate export. They need to work with individuals. Government should set up a committee to look into the challenges of Small and Medium Businesses in the country. There are a lot of issues going at the port from bribery to lack of coordination. When you talk to the head of a typical agency about this they do not know, because they are just sitting.
Government is planning to scale down the number of agencies at the ports, what is your take on this?
We have been talking about the scale down for a long time. We have been hearing there is plan, when will this plan be implemented. These plans have been there since. Take for example import; when you are bringing in goods into Nigeria you have anti-bomb, SSS, NAFDAC, Customs, SON, so many processes. The typical agency that is used for import and export in any country is the Customs which is the key agency involved.
When they see items that require them to bring in another agency then they bring in that agency. Not that I want to bring in shoe, you have SSS, NAFDAC and anti-bomb inspecting it. If you look at the process there is certain charge that has to go to these agencies. At the end of the day, what should take six hours to process ends up taking three to four days.
How do you help SMBs package their product to foster acceptability in the foreign market?
The challenge that exporters faced is that a lot of them are not aware of the rules guiding export. The way we do things in Nigeria is not the same as in USA or Europe. Whereas in Nigeria, I can just put my beans in any bowl and take it to the market. If you are sending that outside you have to follow their laws. In USA which is our key export destination, there is the Food and Drug Administration (FDA) that governs the packaging process.
That is what most of them don’t know. One of the key things we do is that, when you come to us, you don’t need to go through the one or two hour training a lot of organisations are doing now. We already have a sample documentation that tells you what you need to do, how to package your products, the format of your invoice, the various forms to be filled. Everything is there in a package for you. When you look at all these, it is more like a check list that says when I am importing this; these are what I should have. We help you with links to do the FDA registration if need be. Not everybody needs to do that. The most important thing is we help you with the whole process of documentation.
What are the challenges faced in this business?
The biggest challenge we face is the multiplicity of agencies and the poor coordination between the various agents. When we started this business, we start the export process. Initially I told my team to go out there and give us breakdown of how export is done and when they came with a diametric of how it is done, you will think we are trying to send a rocket into space.
It had so many layers and you find out that some of the key agencies or government parastatals that are supposed to inspect your goods before they are exported, you go to their website the address is not there. These are some of the challenges that a lot of this small businesses are facing. They don’t know where to get this.
The Export Proceed form for example that you have to fill with the bank before you export, you can go to 90 per cent of banks in Nigeria and they will tell you they have no clue of what you are talking about. These are things some of the businesses are facing. They look at it, they strive, they go here and there, and they give up.
What should be the roles of government in simplifying these challenges?
Government is the only one that can simplify these challenges. They should bring all these bodies together. I believe there should be centralised export agency that handles everything that has to do with export. These agencies can be on the same location so that when you want to export your products you can do all the whole process in a location.
The situation where these agencies are not together or nowhere near could be discouraging. The government needs to centralise the agencies and bring all the bodies together. If I take my goods to one body it is done immediately. Lack of coordination is killing the export business in Nigeria.
Can you put a figure to what Nigeria is losing in terms of revenue?
It is difficult to quantify because I don’t have the export documentation. I can tell you for a fact that even government does not have a clue to what we are exporting. Why, because you need to look at some of their processes. The government needs to close the gap between the exchange rates in the country. Until that is done, we as nation may not be able to quantify what we are losing in terms of revenue to lack of coordination in the export industry.
What gap is SCL filling in the industry?
We are basically into import, export, procurement, documentation, clearing services; anything that has to do with bringing goods in or taking goods out for small, medium and large businesses. There are still a lot of issues surrounding export. Just like import where we have well over 14 agencies that have to sign-off at the port, export is still very complex.
We are trying to take up the export role for most SMBs such as documentation and shipping. Now the biggest challenge that exporters have is that most companies will export a container load of shipment to maybe the US or thereabout, that leaves a lot of businesses that do not have the capacity incapacitated.
If I want to send a sample of my product like a cartoon, it becomes difficult. What we are doing is work with organisations such as the Nigerian Export Promotion Council (NEPC) to provide an avenue in respective of the size of your company, to help you export the size of your goods.