Critical Appraisal Of The Nigerian Export Promotion Council Strategies In The Export Of Nigeria Goods

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Critical Appraisal Of The Nigerian Export Promotion Council Strategies In The Export Of Nigeria Goods

Abstract

This research did a critical Appraisal of the Nigeria Export promotion council strategies in the Export of Nigeria goods.

In the 1960s, non oil products such as palm produce crera, cotton, groundnut, rubber etc were the major sources of our revenue. These give up about 80% of Nigeria total revenue worried about the trend the federal government in 1988 established the Nigeria Export Promotion Council and charged it with the task of reversion the trend. Sad enough there is little or no improvement in the effort. This situation thus promoted the researcher to critically appraise the strategies of NEPC in the export of Nigeria goods.

The study attempted to examine the managerial input of NEPC and to critically appraise their promotion strategies and practices geared towards the export of Nigeria goods. This prompted the appraisal in the resources, the fundamental activities of Nigeria export promotion council. This was necessary because the councils success is determine by the level of foreign earning from the non-oil proceeds.

The study reviewed NEPC achievements and failures since inception in 1988 with a view to areas that lacked proper attention so that ultimately, Nigeria can once again rely on proceeds from the non-oil sector of her economy.

A good number of recommendations were made as a result of this study. This great goal of increased foreign revenue from non-oil proceeds as a result of increase efficiency would have been achieved as a result of recommendation proffered in this study.

Chapter One

Introduction

1.1 Background to the Study

There is a saying that “No man is an Island” This means that no human being can live and survive by himself or herself without depending on his/her fellow human being. In essence to survive in the world required adherent to the principle of give and take. This same notion led to the believe that no nation can exist on its own and by itself without it having to interact with other nations in the world.

No nation can adequately and effectively provide all its needs. This it has to seek for the satisfaction of some of its need beyond its shares reasons for this are sometimes explained by natural endowment of resources.

In Nigeria, since to early 80’s there has been consistent effort by the government to stem the tide of the country being as import oriented, to do away with the import substitution policy and embrace export expansion and diversification. This quantum effort which the Nigeria government has interested in the promotion of Nigeria exports an endeavor which constitution an implicit objectives of the structural adjustment program (SAP) is evident in such measure as to dissolution of the commodity Board, established and re-organization of the Nigeria export. Export promotion council (NEPC) the approval of the long list of generous export promotion incentives as contained in the 1986 budget and in decree No.18 Export incentives and miscellaneous provision decree and the deregulation of the exchange rate of the naira.

Anolim and Igeh (1994: 15 – 21). In some quarters it has been argued that Nigeria should not get herself involved too much in exporting as it is trying to considering the fact that the domestic market still remains unsatisfied and that Nigeria would not be able to complete in international market.

1.2 Brief History of the Company Under Study

The Nigeria export promotion council (NEPC) was established in 1976 by decree 26 under the mutal/Obasanjo regime. The decree established the NEPC as a semi-autonomous agency under the ministry of trade and tourism N.E.P.C. is charged with the responsibility of promoting non-oil export in Nigeria. Having operated for about twelve years, it was obvious that NEPC was not achieved its set objectives.

It was for this reason that in 1988 under the general Ibrahim Gbadamosi Babangide. To NEPC was revisited and re-organized. The enabling decree No 41 of 1988 thus reported the earlier decree 26 of 1976, which established the council. The new NEPC was hosted with a lot of authority and responsibilities.

Although it has recorded some success but suffice to say that it saddled with a lot of problems just as it is yet to record excellent when compared with its set objectives.

This is the crux of the matter and forms to basis for the research work. Correctly NEPC has various offices covering all the Geo-political Zones of the federation. South-east zone which the study is being carried out.

  1. Enugu – which covers Benue, Abia, Enugu and Delta state with the Coko and Warri port as business centers.
  2. Port Harcourt – Covering Rivers, Imo, Abia and Ebony state with the port Harcourt port as the nerve center of activities
  3. Calabar – which covers Cross River and Akwibom states with calabar port as the center of activities?

1.3 Statement of the Problem

Since the mid eighties when the wide oil glut started, Nigeria government has seen the need to diversify rather than maintaining its mono structured economy with petroleum oil as it major source of revenue.

This obviously implies that Nigeria has paid less attention to the promotion and export of agricultural products such as Groundnuts, Coca, Palm product rubber as well as solid minerals consequent upon to the above development. The Nigeria export promotion council was established in 1976 and charged with the responsibility to develop marketing strategies that will lead to the recovery of the economy from its present doldrums. Again in 1988 the Nigeria export promotion council was re-organized with a view of directing the council increase productivity and more positives results.

But up till now, the proceeds from these non-oil products have not improved the specific problems to addressed include the following.

  1. To what extent have the bureaucratic bottleneck in export business discouraged potential exporters?
  2. Could lack of adequate export incentives be a cog in the wheel of export business?
  3. Is the fluctuation Naira dollar exchange value affecting the level and value of export business
  4. Could the non-availability of trade data or export business information for targeted countries be responsible for the non-chalant attitude towards export business?

These are some of the questions on which this research will be based on.

1.4 Objectives of the Study

This study objectively aims at the following

  1. To evaluate the management strategy adopted by the NEPC in promoting Nigeria product abroad
  2. To ascertain the not cause of low percentage in the foreign earning from agricultural and non-oil export
  3. To evaluate problems facing or militating against the councils effort in achieving its set goals and objectives
  4. To proffer solution towards rellamping the economy through an improved export promotion strategies.

1.5 Hypothesis Formulation

The following hypothesis was tested in the study.

  1. Ho1: Export promotion council has not been able to promote non-oil export in Enugu state.
    H1: Export promotion council has been promoting non-oil export in Enugu state
  2. Ho2: Export promotion re-organization has not made it more efficient and effective in promoting non-oil export.
    H12: Export promotion re-organization in Nigeria has made it more efficient and effective in promoting non-oil export.
  3. Ho3: Export promotion has a positive effect on government ownership and it also contributes to its efficiency.
    H13: Export promotion has no positive effect on government ownership and it does not contribute to its efficiency.

1.6 Significant of the Study

Considering the attention which the federal government of Nigeria is paying to non-oil export hence the need to critically appraise the strategies adopted by the NEPC and other government agencies involve one way or the other in export activities.

It will be of immense benefit to the organized private sector involved in export related activities, export agencies and export brokers as well as manufacturing exporters. It will help may potential exporters to have a good knowledge of export business before they can embark on it, while the already established ones can grow and expand the business. They are a lot of opportunities in export business but because of ignorance men export have not been able to seize these opportunities to their advantages; to such people this work will be of immense benefit to them. In the same vein, this research work will be of benefit to students, industrialist, bankers and other in export business.

1.7 Scope of the Study

The scope of my study is limited by its size, organizationally levels and its coverage. This study concentrated on Enugu promotion council. The research work was limited to a aforementioned areas, though if the research was able to identify with any other area, which is not included it should be accepted.

1.8 Definition of Terms

1. Advertising:

This means sending message through the mass media for example, the radio, the magazine etc.

2. Export Promotion:

This means public measures which actually or potentially enhance exporting activity at the company, industry or national level

3. Economic Policy:

This is an economic plan of action implemented or adopted by the government of a state to regulate its economy.

4. Finance:

This project work is obviously limited to inadequate or in sufficient opinion sampling in fact finding from a sizeable number of consumers. Since there are other areas outside Enugu. The research could extend to such area if not for poor finance.

5. Poor Responses:

The management indisposition to fully respond to the questions during the personal interview due to pressure of work and suspicious about the motive behind the research was a limiting factor to NEPC. Each person would consider himself incompetent to dish out information even when he appeared to be the most competent to do so.

Chapter Five

5.0 Summary of Findings, Recommendations and Conlusion.

5.1 Summary of Findings

The research set out to critically appraise the promotional strategies adopted by Nigeria goods. After a rigorous exercise of what initially seemed an impossible mission the researcher came out with the following findings which could be very surprising. Informative and educative. The hypothesis were tested and the results were in consonance with the facts. The researcher was able to establish that the major problems encountered or militating against export promotion in Nigeria include:-

  1. The viability of products from this sub-sector to complete effectively with similar products from Europe and America due to low or lack of technology. This giving rise to inefficient production and low productivity. In adequate export oriented manufactured like in Bangladesh as well as the inability of productive set up to respond quickly to export order. High production cost attributed to official and unofficial elements are also relevant. Foreign exchange constraints infrastructure deficiencies like cost of power where industries are compelled to own and maintain generators as well as increasing cost of telecommunication can serve as disincentives to manufacture thus to need to complete and put into use the Enugu Export processing zone.
  2. Also the lack of standardization, quality control, poor selling and packing are other constraints. In ECOWAS sub region, were we have comporate advantage the ineffectiveness of the trade liberalization scheme (TLS) to facilitate market entry into ECOWAS markets also affects how contribution to export smuggling. All these problems and mainly other were identified as affecting the export of Nigerian goods and should be seriously addressed and solution proffered.
  3. Also to be properly looked into is the need for committed program especially regarding removing of bottlenecks associated with administration of the incentives in export especially bottlenecks associated with disburse of loans and funds for export stimulation.
  4. Another factor is the length like some bureaucracies encountered by exporters in export business. Let us take a look at the requirement for registration with the NEPC before embarking on export.
  5. Evidence of contract move abroad.
  6. Registration as limited company or as cooperative society
  7. Tax clearance certificate
  8. Copies of certificate of incorporation and memorandum of articles of association
  9. Evidence of regular supply of products
  10. Manufactured products to be exported must have a least 40% local raw materials content or 35% level added.
Export Documentation

Preliminary documentation required from a exporter include

  • Performance/commercial invoice
  • A set of completed form NCD 3 (a)
  • A set of completed from C.3.2.
  • Airway bill or air consignment bill
  • Custom bill of entry sale 97
  • Copy of export order/contract
  • Copy of certificate of registration with NEPC.
  • Copy of certificate two copy of form co. 7
  • Copy of current tax clearance certificate
  • Copy of certificate of incorporation
  • Copy of memorandum and article of association.

Other relevant document varies ascending to the export product and destination. These include.

  • Bill of landing
  • Certificate of origin
  • ERU – 1 form
  • Generalized system of preferences forms (GSP)
  • Phytosanitary certificate
  • Certificate of quality and fumigation
  • Parking list
  • Port surveys report
  • Certificate of analysis and quality
  • Certificate of age
  • Quality/quantity/price inspection
  • Free save certificate
  • ICC – 1 certificate of origin

An exporter should know the trdae condition of his product and master the proper use of basic documents as well as accompanying certificate in conformity with the conditions of preferential treatment. It is also important that he is aware of the required documentation and the importance in his buyer’s country.

Export Procedure
  • Registration with the Nigeria export promotion council (NEPC)
  • Negotiation of sales contact
  • Submission of complicated form 3 (A) C-3,2
  • Performance invoice and other basic certificates concerning the export to the bank for sampling, endorsement and processing.
  • Submission of other relevant document to the department customs and exercise at the time of shipment.
  • Opening of an “Export proceed Domiciliary Account” for receipt of export proceeds.
  • Disposal of export proceeds in accordance with CBN regulations
Supervisory Bodies
  • The promotion activities in Nigeria are supervised and monitored by three bodies.
  • The Nigeria Export promotion (NEPC)
  • The Nigeria Export. Import Bank (NEXIM)
  • The Nigeria Export promotion council (under appraisal)

This is a trade promotion organization established and financed by the federal government of Nigeria to serve as a local point for export promotion activities in the country. The council has various function, which include identifying the nation’s export potentials, collecting and disseminating export information, procedures and documentation. The council is a public sector agency entirely financed by government. Its activities are very much influenced by private sector organization like the chambers of commerce, industries and manufacturers association of Nigeria.

The Nigeria Export – Input Bank

The Nigeria export – import bank was establish by decree 38 of 1991 as an export credit agency with a share capital of #500 million held equally by the federal government and the central bank of Nigeria. 80 of the statutory functions of the bank include.

  • Provision of export finance in both local and foreign currencies.
  • Provision of export credit guarantee and export credit insurance maintenance of export information system in support of export business.
The Central Bank of Nigeria

The CBN plays the statutory role of issuing exchange control forms and NCD 3 (A) to authorized dealers to monitor the repatriation of export proceeds to Nigeria

5.2 Recommendations

Apart from solving the problems highlighted earlier through deliberate and consistent government policies and directives. The following strategies will constitutive preconditions accelerated growth desired by export promotion.
Strengthening and upgrading the status of NEPC. Export promotion (E.P.O) all over the world are vital national assets and are well equiopped and located to perform the vital function of export promotion. NEPC should not be an exception. NEPC should be strengthened financially and matured to be self-sustaining like CESTRA, NEPC counterpart in Taiwan. For effective operation records show that government Agencies and organs function better when they are privatized. This could be considered is one. The council oversea commercial desks and trade centers when reopened should be strengthened to make them more functional and effective at of immense benefits to the export community. The foreign market research serves should also be reinvigorated. Equally, export related agencies like NEXIM and NEPZA should be strengthened and streamlined.

Export Processing Zone

The EPZ As we know has remained one of Nigeria’s dreams yet to come true. With several dates for its commissioning, it is yet to come on stream. Obviously the speedy completion of basic infrastructure for the EPZ at Enugu will be an incentive to the OPS and exports promotion EPZ will promote foreign direct investment as an export product production strategy.

Export Taxes

The abolition of export taxes examples levies on personal commodities as well as the introduction of duty free schemes will enhance the competitiveness of Nigeria commodities in international markets.

5.2 Conclusion

Since the research is examining the journey so far with NEPC’s strategies in the export of Nigeria goods, it is important at this juncture to have a look at government released of fund to the NEPC in the recent years, as lack of fund has always been a major reason advanced by any government organization or agency for its failure to achieve its set objective, let us mow see how government subvention of NEPC from 1992 – 1995 as related to capital expenditure.

We are aware that government recourses are not limitless. However when we look at the capital released from 1992 –1995, it could be seen that what was actually released when compared as a percentage of NEPC’s budget proposed fell short of the council expectations as a related figured were 10%, 5%, 3% & 10% respectively. The rapid decrease in capital released is very glaring and the actual released fun fell short of government’s approved budget for the council. As the major operation of NEPC fall under capital account, the above picture under scored the need for strengthening to NEPC if the export promotion drive were to review accelerated growth.

In the area of incentives 373 companies have received a total of #158.6 million for expansion grant fund from 1988 to 1995

In concluding this research work one will not end without specific mention of obstacles to export promotion and what this nation should do to join the club of export oriented countries thus strengthen our economic growth.

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