Forex crisis stalls Nigeria’s participation in $3.4tn AFCFTA – Exporters

Four months after Nigeria flagged off its participation in the African Continental Free Trade Area under the Guided Trade Initiative, Nigerian exporters have said that the foreign exchange crisis in the country is hindering their participation on the platform valued to have a combined Gross Domestic Product of $3.4tn.

In July the Federal Government through the Nigeria African Continental Free Trade Area Coordination Office declared that 10 Nigerian companies would be exporting different homemade products to countries across East, Central, and North Africa.

The National Coordinator, Nigeria AfCFTA Coordination Office, Olusegun Awolowo, disclosed this in Lagos at the implementation of the African Continental Free Trade Area Nigeria’s inaugural shipment under the Guided Trade Initiative framework and ribbon-cutting ceremony.

“The companies are 10 in number, and over the next few days, weeks, and months they will be exporting Nigerian products to five countries across East, Central, and North Africa,” Awolowo had stated.
According to him, these companies which would be exporting products like bags and drinks were setting a new standard for others to follow.

“Some of the companies include, Le Look Nigeria Limited, exporting bags to Kenya; Secure ID Limited, exporting smart cards to Cameroon; Dangote exports clinkers to Cameroon; Avila Naturalle exports black soap and shea butter to Kenya,” he stated

But while providing an update on the AfCFTA, the Chief Executive Officer of Le Look Nigeria Limited, one of the companies that partook in the inaugural export programme, Mrs Chinwe Ezenwa, said their major challenge had been the high cost of freight caused by the forex crisis.
“The challenges have been logistics. I mean in the cost of freighting, it is a lot of money to freight because you know every airline because of forex has to increase their cost and that has been affecting the process,” she said.
She added that she has only been able to export 5,000 bags since then as against 20,000 she was supposed to have exported if there was no forex crisis.

“Since the launch in July, I have been able to export over 5,000 bags and I have also established a warehouse in Kenya. So that is a very big plus for me, I have also located a willing partner in Kenya that is because of AfCFTA.

“If not because of the forex issue, I am supposed to have exported more than 15,000 to 20,000 bags because these are school bags,” she said.

She urged the government to assist the operators by making loan facilities available at a better interest rate.

“The way forward is to continue to create more awareness and also to continue to get the government to assist SMEs in any way they can by providing single loans that can assist do some of these things that are like a challenge to us,” she stated.

The Director-General of the African Centre for Supply Chain, Dr Obiora Madu, in a recent interview with journalists, criticised the slow pace.
According to him, the challenges confronting Nigeria in trade are rooted in a lack of an export culture and limited capabilities among potential exporters.

“It’s not the lack of opportunities, but rather an absence of an export culture and knowledge,” Madu noted.