Nigerian firms explore export market to make dollar gains

Nigerian firms are taking the export market more seriously as they eye dollar gains resulting from a wider differential between the naira and the greenback. Cocoa exporters say they now earn more money from export owing to naira devaluation. Zacheaus Egbewusi, chief executive officer, Agri Commodity Inspection Limited, said “despite a drop in the country’s cocoa output, farmers and exporters are making a lot of income presently, due to foreign exchange margins.” Cashew farmers’ export revenue rose from $250 million in 2015 to $300 million in 2016, according to Tola Fasheru, president of the National Cashew Association of Nigeria.But this does not mean that there was more cashew export in 2016. It rather shows the extent of naira devaluation to dollar.

Already, more companies have registered their products for export through the ECOWAS Trade Liberalisation Scheme (ETLS). An ETLS registration is an indication that a company is ready to trade its product (s) in the West African market.

“In 2016 alone about 114 companies have been registered under the scheme,” Tunde Oyelola, chairman, Manufacturers Association of Nigeria Export Group, told BusinessDay.

Flour Mills has registered its Daily Delight and Semolina in the ECOWAS Trade Liberalisation Scheme (ETLS).

The miller’s Rom Oil has also registered its Spread and Margarine brands for export, while another subsidiary Northern Flour Mills has enrolled Massa Flour and Massavita for export.

Guinness Nigeria plc has enrolled its Orijin drink for export into the regional market, just as Mamuda and Nasco registered new sacks and biscuit brands respectively for export.

Royal mills and Foods Limited has also expanded outside the Nigerian shores with its noodles and spaghetti, while Mapleleaf Press is now in the ECOWAS market with some of its exercise and textbooks.

Others that started exporting in 2016 or registered new products for exports include Emos Best Industries (cosmetics), Dangote Agro Sacks (sacks), Aristocrat Industries (shrink films and stretch films), Grey De Koroun Nigeria Limited (Balila body cream, Balila body lotion, Balila petroleum jelly and Tony Montana powder).

Ordinarily, firms do export and repatriate proceeds through Nigerian banks. They get their naira equivalents at N305/$.

However, BusinessDay gathered that many exporters earn dollars from the global market and route their foreign exchange earnings through the land borders so as to sell at over N480/$ and make more naira gains.

“Definitely the foreign exchange policy is driving people to do all sorts of things. The export figures are dropping not because exporters are not exporting but most are going through the land borders due to policy issues,” said Obiora Madu, chairman, export group of the Lagos Chamber of Commerce and Industry (LCCI).

“Exporters are not getting any incentives from the government, so why would they sell their dollar at the official market and lose money?” Madu asked.