Critical Appraisal Of The Strategies Of Exportation Of Made In Nigeria Goods

Project and Seminar Material for Marketing

Critical Appraisal Of The Strategies Of Exportation Of Made In Nigeria Goods


Abstract


A critical appraisal of the strategies of exportation of made in Nigerian goods is a topic chosen from marketing field.
The research was conducted mainly to examine the strategies adopted by NEPC in exportation of goods made in Nigeria. For effective research on this topic, both primary and secondary data were used to elicit information from sample studied, the primary source of data were response from the personal interview, while secondary source from periodical, journals and newspapers.

Three hundred and fifty person were interviewed as the sample of exporters with NEPC.

The data analysis was based on oral interview and the major findings are as follows:

  1. The commendment of the strategies adopted by Nigeria export promotion council.
  2. The positive responses given by respondent in the quest of the research.
  3. The strengthening and upgrading the status of NEPC.
  4. The reduction of institutional bottleneck in export.
  5. The establishment of export processing zone.
  6. The abolition of export taxes and provision of export incentives.
  7. Lastly, the problems and prospect of Nigerian export promotion council (NEPC).

The project has four chapters;

  • Chapter one contains introduction, background of the study, statement of problem, and objectives of the study.
  • Chapter two has literature review, here some related literatures were reviewed with sub topic as export development activities, export financing and incentives, Encouraging Local export production, finding export market, human resource training and development activities and importance of export in Economic growth and development .
  • Chapter three deal with research methodology, data analysis and presentation were some questions was attended to.
  • Finally, chapter four deals with the findings summary, conclusion, recommendation and references.

Chapter One


Introduction

1.1 Background of the Study

The Nigerian Export Promotion Council (NEPC) was established through Nigeria export promotion Decree NO 26 of 1976, and was formally inaugurated in March, 1977. This Decree was amended by Decree No 72 of 1979 which introduce some slight changes in the membership of the governing council and formal provision made for the establishment of the secretariat of the council. Nigerian export promotion Act CAP 306 and Decree No 41 of 1988 amended which resulted in the redefining of its functional responsibilities, thus strengthening it in properly spearheading and sustaining a dynamic export development programme and implementing the various incentives contained in the Export (incentive and miscellaneous provision) Decree No. 18 of 1986.

Before the discovery of oil, the main stay of Nigeria economy was agriculture such as palm oil, cocoa, cotton, groundnut, rubber, palm kernel etc. which enjoyed encouragement and support in policy implementation accounting for about 80% of Nigerian Total revenue.

In 1965, non-oil export accounted for as much as 76% of Nigerian foreign exchange earning, in 1970 it was 43%, but in 1976, the share of non-oil export falls to 6% and by mid eighties, the sector remain structural imbalance in the economy and thereby had to import some of these products.

However, the discovery of crude-oil since mid seventies increased total export earning from 58% to 98% which is the peak of “oil boom” as crude oil is sold at 40 dollar per barrel and which the worldwide oil glut, price of crude oil drops slightly to 90%. It is against this background that Nigeria need to re-appraise her strategies in the exportation of non-oil exports.

Export promotion management was adopted early sixties by international trade centres UNCTAD/GAT as strategies for effective enhancement and development of international marketing of export products in developing economic in world trade.

Export promotion is designed also to assist in boosting debt servicing, purchase of basic input and responsible for promoting non-oil export in Nigeria. It is against these backdrop that the council was established.

Although, it has some success but suffice to say that it is saddled with problems as yet to record excellent compared to its set objectives.


1.2 Statement of Problem

  1. Is there bottleneck in NEPC strategies in export business?
  2. Is the lack of adequate export incentive a log in wheel of export business?
  3. How NEPC programmes faces militating danger?
  4. How the economy faces degradement?

1.3 Objectives of the Study

This study objectively aimed at the following:

  1. To ascertain NEPC strategies of promoting Nigerian products abroad.
  2. To ascertain low percentage in foreign earning from non-oil products.
  3. To ascertain problems dancing NEPC in achieving its goals and objectives.
  4. To proper solutions towards revamping the economy by improved export promotion business.

1.4 Purpose of the Study

The purpose of the study is to find NEPC strategies towards the promotion of Nigeria products abroad.
The harnessing of Nigerian non-oil export by providing export incentive and making it the mainstream of our total exchange earning.

However, the dwindling percentage earning from non-oil product, the worldwide oil glut and the collapse of international oil prices with necessity to diversify this mono-cultural economy.

Therefore, NEPC should re-appraise to areas of failure with a view to revamping it and making it live up to expectation and success.


1.5 Significance of the Study

The importance if properly managed would lead to economic progress that is a means of facilitating employment and enhancing the standard of living of its citizenry; considering this fact, the federal government have tremendously given attention to non-oil export(s).

Also, it will be of immense benefits to the organized private sector and public sector to be involved in export business. It will help many small-scale exporters to succeed in export business as apart from surmounting the problems in exportation, be acquainted with ever-changing government policies, financing provisions and having business acumen.

There is a lot of opportunities in export business but ignorance scare many small scale exporters away but flow immensely contend this risks.


1.6 Scope of the Study

This critically evaluates trade strategy which encourages production for international marketing, and in which there is an embedded bias.

It considers NEPC techniques in the light of increasing the need for Nigeria to diversity her external source of revenue and also take cognizance of the fact that the council operate within the limited sectorial allocation of fund to the council.

Initially, the study was to cover NEPC activities Nationwide, but constraint includes:

  1. Time
  2. Finance

The study comprises South East Zone of NEPC such as:

  1. Enugu
  2. Port-Harcourt
  3. Calabar

Method of Study / Limitation of the Study

During the time of this research work, the researcher employed some techniques which are helpful – to him in getting information.

The necessary information about the exportation of made in Nigerian goods was through oral interview and desk research.

The respondent number during the oral interview was high because exportation of goods such as petroleum product is a main stay that have revamp the economy.

The information received from desk research in Enugu was helpful to the researcher for analyzing the important role played by exportation of goods, mainly agricultural product in the early seventies and mid eighties before petroleum took over in the development of our economy.

This two procedures carried out help the researcher collect enough data which enable him solve the problem at hand.


Chapter Four


Summary and Conclusion

After all the findings, the researcher was able to establish problems facing export promotion in Nigeria such as:

  1. The inability of local product to compete with product from Europe and America.
  2. The low productivity due to high cost of production.
  3. The lack of export incentives and inadequate strategies adopted by NEPC for exportation of made in Nigerian goods.
  4. The problem of instability of policy is yet another problem to be properly addressed. For instance bank’s – finance decision are based principally on governments declared export policies in operation (with the aim of achieving national economic objectives) in the 1994 monetary policy, banks are under obligations to receive exporters 10% of their loan portfolio to boost export.

Government institutions implementing policies are as under:

  1. NEPC (under appraisal
  2. NEPZA – Nigeria export processing zone authority .

Let us take a look at the requirement for registration with NEPC before embarking on export.

  1. Registration as limited liability company.
  2. Evidence of contract made abroad
  3. Tax clearance certificate.
  4. Copies of certificate of incorporation and memorandum of association.
  5. Evidence of regular supply of products
  6. Manufactured products to be exported must have least 40% local raw material contest or 35% value added.
Export Documentation

Preliminary documents required from an exporter.

  1. Proforma commercial invoice
  2. Set of complete form NCD 3(a)
  3. Set of completed form C.3.2
  4. Consignment note
  5. Custom bill of entire form sale 97
  6. Copy of export order/contract
  7. Copy of certificate of registration with NEPC
  8. True copy of certified form Co. 7
  9. Copy of current tax clearance certificate.
  10. Copy of certificate of incorporation
  11. Copy of memorandum and articles of association.

Other document relevant includes:-

  1. Bill of leading
  2. Cerk-form
  3. Certificate of origin
  4. Generalized system of preference form (GSP)
  5. Certificate of quality and fumigation
  6. Packing use
  7. Port surveyors report
  8. Certificate of analysis and quality
  9. Certificate of age
  10. Price inspection
  11. Tce certificate of origin

An exporter should take cognizance of trade certification, basic document required and the import regulation in his buyers country.

Export Procedures
  1. Registration with NEPC
  2. Negotiation of sale contract
  3. Submission of completed form NCD 3 (A) C – 3. proforma
  4. Submission of other relevant document to custom and excise at the time of shipment.
  5. Opening of an export proceeds domiciliary account.
  6. Disposal of export proceeds in accordance with CBN regulation.
Supervisory Bodies

The three bodies listed below are involved thus:-

  1. Nigeria export promotion council (NEPC)
  2. Nigeria export import bank (NEXIM)
  3. Central bank of Nigeria (CBN)

These three bodies have functions they perform in enabling export business to function as planned such as.

  1. Identifying and dissemination of export information, procedures and documentation.
  2. Provision of export finance
  3. Provision of export credit guarantee and insurance.
  4. Issuing of exchange control form (NCD 3 (A))
Bexportable Items in Nigera
  1. Agricultural products e.g. cotton, rubber etc.
  2. Mineral resources e.g. tin ore, limestone etc
  3. Hanelitrafts – wood carving, raffia work etc.

Conclusion

Since this research work is based on examining NEPC strategies in the exportation of made in Nigerian goods
“theories provide explanations, explanations are responses to state of tension resulting from observation of unexpected eents (Tarlmin 19600 and from this juncture we have to look into government finding of NEPC in the past since the organization cannot achieve its set objective.

We are aware that government subvention from 1992 – 1995 to NEPC are not limitless because the budget proposal give the council at least 10%; through it falls short of the council’s expectation. Thus, the above picture under serve the need for strengthening NEPC if the non-oil export promotion drive were to reach accelerated growth.

In the area of incentives, 373 companies have N158.6 million for export expansion grant from 1989 –1995; while 94 benefited from debt draw refined of N140.02 million.

Writing on the strategies of NEPC in exportation of made in Nigerian goods, one will not and without mention obstacle to export promotion; thereby the need to join the club of export oriented countries and thus strengthen the rise and economic growth.

The problem inhibiting the performance of non-oil export can be viewed from supply demand, infrastuctural altitudinal and policy induced dimension as analyzed below into the following sectors.

Agricultural product

The combating problem are poor access to credit, low yielding, absence of an incentive regime for export, fluctuation in demand, competition, high cost of tariff and poor world commodity prices.

Attitudinal problem

Business is built on trust and attitude of Nigerians towards international business and corruption such as fraund (419) has damaged the reputation of Nigerians in international business community.

Exporters find it difficult to get cooperation from foreign buyers. Some drastic and preventive measures must be in place to formalize these trade and encourage Nigerian to change their attitude.

Some other problems includes inefficiency in the provision of port service in Nigeria, as the port do not operate 24 hours – investigation shows that stevedorers are not motivated and most involved in corruption as a big export disincentives.

The decreased in high port charged by the federal government should be maintained for equitable upliftment of the NEPC operations.


Recommendation

On the bases of the following findings, the recommendations ae made for effectiveness/accuracy in the strategies of exportation of made in Nigeria goods by NEPC.

  1. Strengthening and upgrading the status of NEPC to be self-sustaining like CASTRA, NEPC counterpart from Taiwan.
  2. Institutional bottlenecks to export, should make export hitch free ventures, some of the incentives to be pursued should include.
    1. Export development fund
    2. Export expansion grant fund
    3. Duty draw scheme
    4. Duty suspension scheme
    5. Manufacture in bond scheme
    6. Tax relief on interest income
    7. Pioneer status
    8. Export liberalization measure
    9. Buy back arrangement
  3. Moreover, the establishment of export promotion institution to assist NEPC in the running of export business must be in accordance with federal government directives.
  4. Also, the establishment of export processing zones will be an incentive that will promote foreign direct investment as an export product production strategy.
  5. However, the abolition of export taxes will help in enabling competitiveness of Nigerian commodity in international business.
  6. Then, the government should be able to make naria dollar exchange value stable for the exporter of local products.
  7. Although, the harassment of product and adequate dissemination of information on both product and foreign market availability should be a concerned effort of NEPC.
  8. The structural imbalance caused by crude oil discovery should be curtailed so as non-oil export sector will comeback to limelight.
  9. Finally, for implementation of all these strategies, which should be in viability for any success or progress, a body other than NEPC, MAXIM and CBN should be reconstituted and restructured by the government for their positive effectiveness and feedbacks.

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