New Export Inspection Regime To Curb Leakages, Lift FX Inflows – Stakeholders

BY YUSUF BABALOLA AND BUKOLA ARO-LAMBO Lagos

With the appointment of pre-shipment inspection agents (PIAs) and monitoring and evaluation agents (MEAs) for crude oil and gas exports under the Nigerian Export Supervision Scheme, by the Central Bank of Nigeria (CBN), analysts and operators in the industry has said the move will not only block revenue leakages but also boost the country’s foreign exchange earnings.

Speaking with Leadership, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE) Dr Muda Yusuf, commended the CBN for taking such steps in line with existing legislation.

Yusuf, alleged leakages and improper documentation process leading to loss of revenue especially in oil and gas industry. He said with the appointment of the pre shipment agents there will be efficiency in the system which will help boost foreign exchange inflow

Also, former acting president of the Association of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, has said the introduction of pre-shipment inspection for Nigerian exports will help curb the rejection of the country’s goods in international markets, boost foreign exchange earnings and protect local exporters.

Farinto said the inspection regime would ensure that Nigerian export commodities meet international quality and packaging standards before leaving the country, thereby reducing the risk of consignments being rejected at their destinations.

He said the policy would also improve the reliability of Nigerian exports, enhance the confidence of international buyers and enable the Federal Government to earn more foreign exchange from non-oil exports.

According to him, pre-shipment inspection would provide an opportunity to address some of the challenges confronting Nigerian exporters, particularly the rejection of agricultural commodities over quality and packaging deficiencies.

Farinto cited the rejection of Nigerian beans worth more than €5 million as an example of the losses exporters could suffer when their consignments fail to meet the requirements of importing countries.

He lamented that while Nigerian beans had encountered difficulties gaining access to Belgium, the country continued to receive beans from Ghana.

He attributed the challenge partly to packaging and other requirements that Nigerian exporters must meet to compete effectively in the international market.

Farinto said pre-shipment inspection would help address such shortcomings by ensuring that export commodities are properly examined and certified before shipment.

He explained that the inspection process would involve due diligence and the issuance of clean inspection reports, giving international buyers greater assurance that Nigerian goods conform to agreed specifications and international best practices.

According to him, the arrangement would also reduce the likelihood of disputes between exporters and foreign buyers over the quality of goods delivered.

He said: “They will access your goods before it gets to the port of destination. The pre-shipment inspection will rely on commercial banks in documentation, and the government will get its export earnings in dollars.

“It is an advantage for the Federal Government because they will get money from exports. It will give us reliability in our exportation, so that cargoes will be exported and the receiver will not say that the goods did not meet specifications.

“It will help the government positively. It is a win-win for the Federal Government and will protect our local shippers.”

Farinto further said the inspection regime would help Nigerian exporters overcome barriers that had limited their access to certain international markets.

He stressed that proper inspection and certification would improve the credibility of Nigerian commodities and make it easier for exporters to meet the conditions imposed by foreign buyers.

The former ANLCA president said the policy would also support the Federal Government’s efforts to diversify the economy and increase non-oil export earnings.

He added that ensuring compliance with international standards before shipment would help Nigeria avoid costly rejections, strengthen its position in global trade and improve the competitiveness of locally produced goods.

On his part, maritime expert and group managing director of Widescope Logistics International, Dr Segun Musa, has said the adoption of pre-export inspection services and compliance with international standards will help Nigeria boost foreign exchange earnings and improve its balance of trade.

Musa said the establishment of pre-export inspection agencies would ensure that Nigerian commodities meet international requirements, making them more acceptable in destination markets and expanding the country’s export opportunities.

He stated this while advocating measures to strengthen Nigeria’s export sector, noting that the country must address quality and standards issues to increase the volume of goods entering international markets.

According to him, pre-export inspection agencies would help exporters comply with global requirements on packaging, delivery, documentation and product quality. He explained that these agencies would monitor and supervise the processes to ensure that Nigerian goods meet the standards required by importing countries.

Musa said: “Globally, there is a standard for exportation. For exports to be accepted in international business, there are minimum requirements. So if you have pre-shipment inspectors or pre-shipment inspection agencies, it helps to make your export conform with international best practices that will allow your commodities to be accepted in the destination ports.”

He added that compliance with international standards would encourage more businesses to participate in export activities, particularly manufacturers and agro-allied operators seeking access to foreign markets.

Musa noted that Nigeria had previously generated substantial revenue from exports, particularly in the 1970s, 1980s and early 1990s, when the country was better positioned to achieve a balance of trade.

He said the country could improve its trade position by creating an enabling environment for exporters and ensuring that locally produced commodities meet international standards. According to him, expanding access to foreign markets would enable Nigerian businesses to increase exports and generate more foreign exchange earnings.

Musa said: “There is no way we can achieve what we call balance of trade if we don’t conform with international standards. Once we create the enabling environment and standard that is expected of our commodities, then we can begin to see how we can incentivise or give incentives to most of these manufacturers and agro-allied operators that want to push their commodities into international markets.”

He, however, stressed that efforts to increase exports should not undermine local consumption, adding that the country must balance domestic supply with the need to generate foreign exchange through international trade.

Musa said the first step was to establish an enabling environment and standardise export processes before introducing incentives to encourage businesses to expand their international operations. He added that having products that meet global standards would enable Nigerian exporters to access more countries beyond the limited markets currently available to them.

He said: “The first thing we have to do is to create an enabling environment, standardise it, so that by the time we start yielding, we already have a market that will accept our commodity. So that is the essence of putting these agencies in place.”