There is now high optimism that Nigeria would boost its export trade, earn some more foreign exchange, particularly through agriculture, and in fact play big in the African Continental Free Trade Area (AfCFTA) as the National Assembly nears final stages of repealing the0 Export Prohibition Act. The Act had hitherto placed restrictions on export of most of the country’s agricultural produce.
The repeal bill, sponsored by Mohammed Mongunu (APC, Borno) and Benjamin Kalu (APC, Abia), has passed second reading and has been referred to the House Committee on Commerce. It seeks to repeal the Export Prohibition Act and provide for the unhindered exportation of commodities from Nigeria.
Leading the debate, Monguno said the Bill seeks to ensure the diversification of the Nigerian economy away from oil, develop many sectors including the agricultural and processing sectors, among others, and ensure the exploration and development of other resources to become exportable goods.
The Export Prohibition Act which was enacted in 2004 puts restriction on exporting farm produce, including beans, cassava tuber, maize, rice, yam tuber, all products or derivatives of these crops and all imported food items.
“Notwithstanding anything contained in the Customs Excise Tariff, etc. (Consolidation) Act or in any Act or other enactment (including any statutory instrument or order), the goods specified in the Schedule to this Act shall be absolutely prohibited from being exported out of Nigeria,” the 2004 Act notes.
Experts who spoke to BusinessDay say removing the legal restrictions will boost agricultural production, increase the size of Nigeria’s export commodities and enhance diversification of the nation’s economy from oil to agriculture which has a lot of untapped potential.
Johnson Chukwu, CEO, Cowry Asset Management, said repealing the Act is a step in the right direction as it has been a hindrance to the expansion of agriculture production as it does not allow for exportation of produce.
Chukwu stressed that the Act contradicts the aim of entering into the African Continental Free Trade Agreement (AfCFTA ) and would limit the nation’s ability to participate in the market.
“AfCTA allows for free movement of goods within the Africa continent, makes the Africa market a free market for nations in Africa. The prohibition law is a complete interference which must be corrected,” he said.
He further said placing restrictions on product exportation denies the producers the full value for their product and repealing the Act would lead to price increase which may encourage more people to come into the production.
“The Act restricts movement of goods with a particular confine and does not allow farmers to achieve optimal value for production. Such an Act can only be good if we are not producing enough of a particular product but once you sign into an international tariff, you cannot stop anybody from exporting a product, so the act is not useful at this time,” Chukwu stated.
The Export Prohibition Act also provides that “any person who takes, causes to be taken, induces any other person to take or attempts to take out of Nigeria any of the goods specified in the Schedule to this Act shall be guilty of an offence and liable on conviction to imprisonment for life”.
Another penalty is that “the goods, as well as any vehicle, vessel, aircraft or other thing whatsoever used in connection with the exportation; and all the assets, movable or immovable, including motor vehicles, of any person convicted of the offence, shall be forfeited to the Federal Government”.
Simeon Irtwange, president, National Association of Yam Farmers, Processors and Marketers, said the Act has restricted their activities and that repealing it comes as a huge relief and would ease government move to diversify the nation’s economy and allow for expansion of agricultural production in Nigeria.
Irtwange, a professor of Agriculture, noted that the huge fluctuations in prices of oil and gas have made economic diversification critical to decouple from volatile government revenues that are highly dependent on commodity export-growth models.
He said growth in the non-oil sector has remained weak, investment in education to improve skill sets of domestic populations for diversified job opportunities of the future remains paramount; therefore, policy, regulatory and legal reforms to create non-oil growth and safeguard long-term sustainable economic growth has become a non-negotiable imperative.
On the benefits of the repealing the Act, particularly as it concerns exportation of agriculture products such as yam, Irtwange said, “Currently, export standard yam tuber in Dallas,Texas, USA is $18.78 while Ghana yam weighing 1.5 Kg is being sold on Amazon for £8.99 whereas the same size of tuber is sold in Nigeria for N350.00. It does not make business sense for anyone to buy yams at that amount in USA and UK to process (add value) and send back to Nigeria.
“Nigeria yam farmers can earn foreign revenues from the 30 percent that goes to waste. Furthermore, with the current adoption of higher yielding improved disease free seed yam varieties there will be enough yams available and affordable to ensure national food security and export.”
Olugbenga Adams, CEO, Olu Farms, said the repeal of the Act would no longer deny Nigerian farmers the opportunity to operate in the larger markets, especially in the export of crops such as yams.
“Most diasporas consume yam in different forms – boiled yam, fried yam, yam porridge, pounded yam, roasted yam – and since the soils, weather and food culture of these countries do not support yam production, there must be a way of taking the yams to them,” Adams stated.
Auwal Musa Rafsanjani, executive director, Civil Society Legislative Advocacy Centre (CISLAC), observed that repealing the Act is good but ensuring synergy between the legislative and the executive arm of government is critical in promoting economic policies.
Nicholas Ossai (PDP, Delta), praised the Bill for the multiplier effect on the development of varying sectors of the economy, which is sure to improve trade, foreign relations and exchange, adding that the value chain of many products would also be harnessed by the full implementation of the Bill.
JAMES KWEN & CYNTHIA EGBOBO, Abuja
