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AGOA Deadline, How Prepared Is Nigeria?

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Though the African Growth and Opportunity Act (AGOA) has been on for the past 16 years, there have been strong concerns that Nigeria has never taken full advantage of the potentials due to its over reliance on oil while other Africans are turning around their economy with this programme.

The AGOA project initiated by the United States of America in 2000 was to help develop trade and facilitate exporting over 6000 goods into America with no tariff.

The trade agreement primarily set up to galvanise the African economy covered 15 years and has since elapsed in 2015.

However Nigeria and other Africa countries on the programme got a second chance when the programme was extended by another 10 years to terminate by 2025.

Reacting to the lacklustre attitude of the government to tap into the opportunity AGOA provides and enable the country’s exporters  the president, Nigeria American Chamber of Commerce (NACC), Chief Olabintam Famuti, at a recent meeting in Lagos affirmed that the country was now set to fully utilise the AGOA programme after under utilising its opportunities in the past.

Drawing from statistics, Famuti said it was regrettable  that as at 2014,Nigeria only exported $6 million worth of goods to the USA compared to $6billion accounted for by other Sub-Saharan African nations.

Famuti , who spoke at a public presentation of five books based on the art of exporting goods by Abiodun Oyefeso, the president of Success Edge Exporters Limited and a member of the Lagos Chamber of Commerce and Industry (LCCI), argued that  the AGOA programme, was abused in its first term by Nigerian leaders who instead of maximising the opportunities by leveraging on the 6500 items allowed to be exported, relied only on crude oil.

“It is a shame that most Nigerians rushed to the crude oil business yet they have not seen crude oil nor known what it is, we are all deceiving ourselves in this country,” he added.

Also speaking , a former director-general of the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. John Isemede, canvassed that only detailed and planned exportation strategy would take the country from the woods.

According to him, there must be balance of trade between imports and exports as the country was rushing to sign partnership agreements with other countries without looking at the critical details involved.

The author of the books,Mr Abiodun Oyefeso, said for the country to be developed, attention must be paid to the solid minerals deposits it has comparative advantage of over other countries.

He noted that Nigerians must take advantage of the huge market in the exportation business to make vision 2020 achievable more so as crude oil is gradually becoming a thing of the past in developed nations.

Olukayode Pitan, CEO of Bank of Industry (BoI) said agriculture should not be treated as just a social sector intervention for managing poverty but more as a business for creating wealth and empowering citizens.

“It is the kind of business that can help many African nations, including Nigeria, diversify revenue, reduce import dependency, create jobs and develop rural areas. But the question to answer is this: How can Nigeria drive economic diversity and productivity in the agriculture sector? One solution is to embark on agricultural industrialisation and implement innovative financing models that cater to the needs of both low-income farmers and high-income processors.We need to start looking critically at the whole agriculture value chain.”

He particularly expressed worry that  in 2017, for Instance, Nigeria’s agriculture export was valued at just over ₦170 billion ($470 million) – less than nine per cent of its potential, stressing that this should not be so.

“I am very keen about our agriculture export potential as we have the opportunity to be the leading exporter of rice, maize, corn, shrimps and cocoa, which we have in abundant quantities,” he stated.

Executive director/CEO, Nigerian Export Promotion Council (NEPC) , Mr Segun Awolowo, said many indigenous industrialists and manufacturers do not know much about what it takes to export under the African Growth and Opportunity Act.

According to him,value addition and manufacturing of world-class products would enhance their global competitiveness.

“People have heard about AGOA but they do not know what it really takes to export under AGOA. Information is very important, a lot do not know the requirements as I speak. A lot of manufacturers and even processors do not know,” he said.

He stated that most of other sub-Saharan African countries had benefited from AGOA, adding that Nigerian exporters should know all the requirements.

“That is why we are enlightening our people on what to do to export under AGOA.

“If you have a facility, and you want to export food items, your facility must be registered. But a lot of our people are not aware of that and they do not even have the special number. Some of them feel that it is cumbersome; they cannot do it. How will they go about it? People who are not technically savvy may not want to go through the rigours of registering their facility online, talkless of getting the numbers. “That is why you have experts that will assess the facility, see what they have in place before the registration and assist them in getting their facilities registered and having the number for their products.

“We do not want to promote export of raw materials but we are promoting export of finished products, and value-added products.

“Manufacturers should go more for value-added products so that they can be more competitive internationally,” he stated.

Interestingly, Just recently, the Nigerian Export Promotion Council (NEPC) AGOA Trade Resource Centre, Lagos, unveiled the AGOA Textile Visa Stamp.

The Council said  it would enable garment manufacturers in Nigeria to have tariff concession on textile and garments manufactured in the country for export to the United States under the  African Growth Opportunity Act (AGOA).

Awolowo, who was represented at the Asian-African Chambers of Commerce and Industry’s inauguration in Lagos, recently, canvassed the need for the NEPC and the Nigerian Customs Service (NCS) to synergise to ensure the Textile Visa Stamp was well utilised for the benefit of garment manufacturers in the country.

The AGOA Textile Visa Stamp is an instrument established by the US government for use by the AGOA eligible countries for textiles and apparels export into USA.

The instrument is to be administered by the Nigerian authorised Customs Officers on the Commercial Invoice of garment manufacturers exporting to the US under AGOA.  It is a major requirement for the export of textiles and garment under the scheme and has to be strictly adhered to by Nigerian garment exporters in order to benefit from the tariff concession provided by the Act.

Awolowo said officers of the Customs were invited to the workshop because they were the sole administrator of the Visa Stamp.

“The Stamp is in their custody and they need to be informed on its application and as well as interface with the Nigerian garment manufacturers,” he stressed. 

More importantly, he emphasised that the interface also facilitated expression of challenges by garment manufacturers in accessing the Visa Stamp from the Customs.

The Nigerian garment manufacturers have a lot to gain by utilising the Visa Stamp. Their products – textiles and apparel would enjoy duty-free access to the US market under AGOA.

Awolowo also explained that the tariff concession would also give made in Nigeria products more competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the United States.

“ They will also be able to retain market share regarding certain apparel products. More jobs related to apparel manufacturing are created through increased production. Trade relationship with US investors and other sub-Saharan AGOA eligible countries counterparts, will in addition, be built. Through technical assistance provided for garment manufacturers they would be able to comply with US standards as well as international market standards in the garment world,’ he added.

Although the Nigerian garment markets are saturated with products from Asia, Awolowo said the Nigerian garment manufacturers through trainings were now informed and have embraced the value chain production systems.  “They only need to be encouraged and be well funded because, value chain system of mass production is capital intensive and many of the manufacturers are still at the workshop level struggling to meet delivery.

“If they are well funded for expansion into large factories, backed up with firm-level technical training and government policy support for solely made in Nigeria garments; the Nigerian manufacturers can meet the needs at home because it will be more profitable.

“Take the case of the use of General System of Mobile (GSM) telephone, it started late in Nigeria, but within a limited period, market women of course now use mobile phones such that Nigeria is now the largest user of mobile telephones in Africa.  When there is a will, there will be ways,” he said.

He said the Council established the Human Capital Development Center (HCDC) in 2006, with modern industrial machines and engaged both local and international garment experts to train and manage the Center for mass production of garments for export under AGOA into the US.

“In 2016 to be precise, the NEPC engaged five garment experts from The Philippines and four local resource persons to train at the garment factory on how to make garments of international standards within limited time and the value chain system of mass production.  “Each batch of training at the center was usually for a minimum period of three months on pattern drafting and garment production except for special requested cases.  NEPC has consistently offered this service at Zero cost to the trainees and even offered free lunch for students.

“The good news is that after graduation, some of the students were retained at the NEPC Factory to perfect their skills and then employed to produce for other fashion designers, a few were gainfully employed by some Nigerian garment factories thus reducing unemployment, others form synergy and established enterprises to mass produce T-shirts for sale and for other industries.  “Kudos to Vlisco Academy Nigeria, which at one time collaborated with NEPC for training at the HCDC in Lagos.  So far from inception, over 850 people have been trained and graduated from the HCDC,” he said.

He further revealed that in addition to the above, the NEPC was currently providing technical support for export ready garment companies by bringing into Nigeria and paying for the services of international garment experts from Sri Lanka and Ghana. 

“The technical support started with the Calabar Garment Factory in Cross Rivers State where firm-level training was conducted for over 600 factory hands in December 2018.  The garment experts are now at Wessy Creations garment factory in Abeokuta, Ogun State.

“This is to assist in bringing the companies to the level of mass production in line with international standard practice and for export to the US under AGOA,” he confirmed.

He added that with individual efforts, government supports (policy wise and financially) for the existing garment factories, navigation of the numerous garment workshops to factories and establishment of more garment factories, the garment manufacturers can meet the garment needs of Nigerians because the country has cheap labour readily available.

But while commending the efforts of the NIgerian Export Promotion Council in repositioning the country’s export sector, experts said there was every need for the  federal government to intensify efforts at providing an enabling environment for the non-oil sector of the country’s economy to thrive.

They urged President Muhammadu Buhari to muster the political will required to revive the non-oil sector of the economy.

This political, they argued , must include curbing official corruption, improving infrastructure especially electricity and roads, providing the climate for access to soft-interest loans and providing excellent transport systems.

According to them, the issue of dilapidated infrastructure in the country must be tackled because they contribute to the increasing cost of doing business in Nigeria,giving instance of many agro-allied industries in Nigeria that had folded up because they could not afford the exorbitant cost of running their businesses on generator.

According to them, the unrestricted access to the US market which Agoa offers African countries, should not be wasted , the federal government must do everything possible to ensure that Nigeria reaps the full benefit of the Act before it expires by 2025.

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