Sunday, 27 August 2017

EXPORTING, EXCHANGE RATE & ECONOMIC GROWTH

The third in the series of the EBS-RED (Economic & Business Strategy - Refined Economic Development) quarterly lectures was held in Abuja the 26th of August, 2017. The convener of the series is Dr. Magnus Kpakol, economic and business strategist, who anchors a vintage programme on AIT. He said Nigerians have to be globally competitive in order to raise the standard of living. He has dedicated a larger part of his adult life to exploring ways of engaging young people on strategies for global competitiveness.

For Kpakol, the negative influences that inhibit this competitiveness are:

*Poor policy choices and the nature of fiscal/monetary policies.
*Revenue as a percentage of GDP has shrunk and this implies government has lost considerable leverage in the economy.
*Income has shrunk from $80b to $30b
*Unstable exchange rate/multiple exchange rates/slow rate of economic growth.
*African countries are weak on the global competitive index. Of the 30 countries at the bottom of the index, 24 are in Africa.
*Mechanisms for revving up export to boost the Naira.
*The level of efficiency, productivity and attractiveness of the Nigerian economy.
*Good monetary policies in recent times from the CBN e.g. anchor borrowers' programme/MSME development fund/CBN working with the Nigeria Export Promotion Council (NEPC).
*The Nigerian economy needs to grow to at least 10%.
*Nigerians are exhibiting their frustration with the economy through begging, demonstration, low productivity, etc

The representative of Segun Awolowo, CEO of NEPC, took us through some of the activities of NEPC. NEPC was established 41 years ago, just like the NNPC. The NEPC was set up to develop non-oil exports while the NNPC was to take care of the oil sector. The Dutch disease made us neglect the NEPC and over-concentrate on NNPC. The major areas of involvement for the NEPC are:

*Export development
*Export marketing & market research
*Advising and training on non-oil export issues

There are three major sources of foreign exchange into the Nigerian economy - remittances from friends/relatives, foreign direct investment (FDI) and export earnings. Of these three sources of forex, export earnings are the most sustainable. That is why in NEPC, there is emphasis on the following:

*Capacity building for export, e.g. the zero to export programme/conterpart funding for youths (8 weeks, weekend course)
*Women in export programme - collaboration with International Trade Centre (ITC), Geneva.
*Taking Nigerian exporters to international trade fairs
*Clear definition of who an exporter is - An exporter must be registered with the NEPC. Individuals are not registered as exporters, only limited liability companies (LLCs)/NGOs/Cooperative societies
*NEPC website - www.nepc.gov.ng. Initial amount for registration is N12,000. Yearly renewal of registration is N5,000

Ms. Folashade Aliu, President/CEO of Alpha Digitals Ltd. She is a certified systems engineer who runs a business coaching platform for unemployed/under-employed graduates. Aliu focused on emerging markets. She urged members of the audience to engage social media more constructively. Rather than spend precious time reading gossip on facebook and other sites, the entrepreneur should constantly peruse the websites of the following organisations for useful information - NBS, NPC, EFCC, FMH, NPC, NSE, Embassies & High Commissions, FMF, CBN, NNPC.

It is important to know the following:

*Top 10 rated export items - NBS
*Trading partners who are the buyers in each country
*Consumer price index (CPI). Know how the CPI affects your import business
*GDP - what does it mean to the small business owner?
*How unemployment affects small business
*Focus factors - information/participation/activation/diversification/mobilisation/connection/monetisation/vision & mission/M & E of market/coordinated effort/risk distribution/branding strategies/balancing BBF (body.brain.family)/projections
*Credit union or Cooperative union
*Look for opportunities around you that you can turn into a business
*Professional services - legal/business/medical, etc can also be exported

Dr. Mutiullah Olasupo, Senior lecturer, Department of Political Science & International Relations, University of Abuja was more interested in the global dimensions of the issues. He talked about the Dutch disease as the abandonment of traditional trading sectors like agriculture for crude oil. The could be detrimental when oil loses value in the international market. Nigeria is now experiencing this. The mono-cultural nature of the Nigerian economy is a challenge.

The inconsistency of the public policies and indeed the processes to arrive at same could keep the economy at a standstill if it does not retrogress e.g. the various poverty alleviation programmes. According to Olasupo, Nigeria has moved its citizenry from 'abject poverty' to 'exacerbating poverty'. Violent extremism prevents FDI. Besides, the quality of leadership in Nigeria needs to improve.

I could not stay to the end of the symposium because I had other engagements. I therefore missed the speech of Dr. Isatou Touray, Hon. Minister of Trade, Industry, Regional Integration & Employment in the Islamic Republic of Gambia. On the whole, I wish to commend the passion of the convener, Dr. Magnus Kpakol for what he does - continually developing strategies for improving the livelihood of the average human in Nigeria, and indeed Africa. However, the rather inexperienced compere needs to be replaced so that persons in the audience who have germane contributions to bring to the table are allowed to do so in subsequent 'parleys'...  

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