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How to Start Import Export Business|export import
fFree how-to export eBook, free international trade newsletter. ... you can cash in on these opportunities just as I and thousands of other have. ...SEE BELOW:
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Earning a consistent income through Export and import business – you can start same day you can start same day you get this comprehensive manual.
You will know: Terms & Rules of International trade
1) Importers that are seriously looking for what you can supply. Their phone, Address, Fax and products e.g. cashew nut, granite, sesame seed, wood, snail, pepper, ginger, palm oil, kola nut, garlic, e.t.c
2) Exporters that want to sell their product to you and collect their money back after 90 days they supply – zero naira capital start-up.
Phone- address, fax and products. E.g. medical equipments, electronic and computers, phone and it accessories, rice, wears, tiles, etc
3) How to get loan without collateral to do this business phone, addresses of places to get it inside this manual
4) How to get NGO and bank to do what you want for you on your business
5) How to operate company in united state of America (US) full business set up with phone, opening of bank account, address
6) Becoming an international business consultant
7) Crowd pulling irresistible advert site for your product& services.
INTRODUCTION AND DEDICATION
by research it has been known that if you want to hide information from Nigerian put it on written publication but I tell you that 75% of genius, expert, and successful people got what they share from write up and thereby later transform it to seminar and you pay heavily, no wonder student, people, can never read and study again but i tell you read this manual 100% and study it 300% and acts it 30% and become a millionaire, billionaire, trillionire truly indeed. The truth remains this that since I have reading books, pamphlet on life, this is what most successful people will never tell you actually what they went through and what they actually did but I going to show you now. how i made success .somebody said “beware of crime for your mother warned you against crime but I say beware of giving to who will not buy this manual. This manual is dedicated to those who major and mandatory wanted to make success in life this at the cost of getting news and live above poverty galvanized duplex and witch craft oriented mentality curses. Know this that, shallow men believe in luck but strong men believe in courses, causes, costs and effects
However I did a lot of research and I found out that most influential people were drops out from the school of ideology, business exploitation, official authority and honor before they eventually made it but I tell you it is now time for you to act.
Get this, that the people who are successful in life does not have two heads but many minds of might. The only reason why drop out made it in music industry, science and technology and business parasitical is because they had changing mentality on how not to have a result but to get the best result. it is not all about opening many email accounts and having many mobile phones but is all about opening minds, it is not all about contact but is all about impart. Some body said two heads are better than one but I say two good heads are best.
The day you discover that nothing in life is absolutely, totally and completely free in itself then you are a great founder of successes even though salvation is free it will still cost you faith and action
Please mind you that you have not pay the price by buying these manual but you price the costs by what you do with this information’s.
Bear with me till you digest and started injecting this injection dose of successes into the society and thereby watch out for what white wrote black buy bulk in the originality context and contents of mind blowing and truth revealing truths. Much respect goes out to the affluence people of the land but affluence without influence is nonsense. Tell me any well known successful entrepreneur if I will not challenge them and tell them where they got their money from and how they got it also, tell me any man of God simply I will tell you, it is a common ideal.
Work on this truth God does not give money but God give power to get money. Some call it ideal but I called it thought ability processing and packaging. if you claimed to be spiritual I say this, prayer does not create solution to your problem but prayer make you believe the solution already with God and in Lord. You are partially responsible for the solution and God is partially responsible for the other half. Can you imaging that Pepsi sold more than automobile? It is not all about bigness; it is all about the divisibility unit return counting
Not all expenses are truly expensive and not all cheap quality are really valuable but (CBN) affect them all
CBN common believe notices, Advertise some call it marketing but the Gurus called it branding 35cl of coca cola is sold for N40 also 35cl of sold for N100 in Sheraton hotel .you may buy this manual at little money but I have no doubt you are already a millionaire. In a nutshell I counsel you not to buy this manual but I careless to read 100% and react 30% and become billionaire. It is never too late but now it is the time to get this dated manual and be rated among the excellent
THE DEVELOPMENT OFINTERNATIONAL TRADE
The concept of international trade contemplates the exchange of goods and services between a buyer and seller who are foreign to each other. The sales transaction is in essence the sales of goods contract with all the inherent commercial and legal issues.
Features of International trade
The following characterize trade:
1) The buyer and sellers are in different countries;
2) The transaction attracts a contract of carriage;
3) As a result of the risk associated with the transit of goods must be insured; and
4) Contractual documents for payment and transfer of goods are involved.
Law Governing international trade
Like other contracts, the law governing international trade contracts is law chosen by the parties. In the absence of this, the court will apply the system of law closely connected with the contract or the law of the most favored nation by applying its rules of private international law.
Historical Antecedents
Overseas trade has been carried on for thousands of years and is the lifeblood of civilization. Since it began, however, there have always been restrictions on how and where people could trade. Back in the nineteenth century, for example, many countries had established trade links with others thousands of miles away but, in some cases, few trade links with their near neighbors. Some reasons for these were: political differences and difficulties, communication difficulties, transport difficulties, colonial aspects, cultural difference and difficulties, communication difficulties, transport difficulties, colonial aspects, cultural differences and tradition.
International trade flourished in spite of these restrictions but it was very efficient. High costs and long delays caused by the facts that people could not always buy from or sell to the best possible markets meant that importers and exporters could not always get the best deal and neither could the consumers.
Factors That Facilitate International Trade
Over the last three decades, a number of important developments have contributed immensely to facilitate international trade. These include:
1 Improved telecommunications system – the advent of the phone, fax and email facilities have aided the growth of international trade. Any country may be accessed in a matter of minutes;
2 Faster and more efficient means of transportation-goods can now be easily shipped by sea or by air to all parts of the world;
3 Political autonomy – with the attainment of political independence from colonial overlords, many nations have formed trade alliances beyond their political ideologies;
4 Cultural tolerance – most people are now better able to handle differences in culture and this has broken barriers to trade. They are now interested in trading with one another than before; and
5 People have begun to question tradition, which is fast changing.
All of theses improvements have contributed to what is called “globalization” of trade. There are no longer insurmountable barriers to international trade. The whole world is open for business. These changes also mean that small and medium-scale enterprises can benefit from global trade as much as large multi-national corporations.
The Volume of World Trade
International trade figures show that values and qualities of goods and also services traded are at all times high, and will continue to be so far at least fifteen years before these figures peak. For example, according to World Bank report (1998), the latest WTO Agreement should boost trade by over US$500 billion per year.
One of the advantages of international trade is that it is not restricted to one geographical location or national boundary. Thus, even in times of economic recession, world trade continues to flourish. Some countries are always doing better than others, importing and exporting. The reasons for the growth in the volume of trade include:
1 Regional trade agreement, such as North American Free trade Association (NAFTA), European Union (EU), General Agreement on Trade and tariff (GATT) now World Trade Organization (WTO), etc. similarly, preferential trade policies, such as, Generalized System of Preferences (GSP) and Africa Growth and Opportunity Act (AGOA). All of these reduce trade barriers like tariffs and quotas. They make it easier and cheaper for us to import and export goods because there are fewer limits on quality and less duties and taxes to pay;
2 The wealth gap – an increasing gulf between rich and poor countries makes it attractive to manufacture goods in low cost countries, such as those in Africa AND Asia, and to import and export them into a high cost country such as the USA and Europe;
3 Improvement in transport and communication – these are the “facilitators” of international trade;
4 Political freedom- the countries in Eastern Europe as well as china are now able to trade with others. You can now buy from them or sell to them quite openly; and
5 The changing balance of resources-for example, there is oil in the Middle East and timber in Asia, and gold is mostly found in Africa. These are mainly used in the west. There are opportunities for international traders to get involved in buying and selling these resources.
The growth of international trade is a trend, which no one individual or country started, or can stop. In future, countries and for that matter, companies, who do not get involved in international trade, will fall behind. The opportunities are here now, but they must be exploited.
How International Trade Works
Throughout history, it has been the case that nations that allow free trade (such as the USA & UK) prosper, whilst those who restrict trade (such as,) prior to recent years), China & Russia) remain poor. It is this realization that free trade fosters prosperity that drives nations to work together to move trade barriers.
GATT and WTO
In 1947 the United Nations debated a draft charter for a new organization whose aims will be to encourage international trade, in order to foster prosperity of the world nation-states. Such an organization was not brought into being at the time but “talking shop’, known as the general Agreement on Trade and Tariffs (GATT), became the only organized system for negotiating trade on a worldwide scale.
GATT was not authority as such, but an arrangement under which nations could discuss and agree on international trade activities. Initially, 115 countries participated in GATT and a further 28 followed its rules without participating in negotiations. The current membership of GATT means that over 90% of all trade you are likely to engage in is carried out under GATT rules.
There were more developing countries in GATT than developed countries. Of the 115 member, 91 are classified as developing countries of which 24 are further classified as less developed countries (LDC). GATT rules are there to be implemented by governments; there are no specific rules for the individual importer or exporter to follow. However, when you buy from or sell to a GATT member- country, you have a right to expect that certain rights will be available to you.
GATT Aims and Activities
The main aim of GATT was to remove or reduce tariff barriers to trade. This means that Tariffs (which are, more or less, taxes on imports) and quotas (which are limits on qualities which may be imported) should be removed altogether or at least reduced. GATT has achieved this by holding negotiations in which most member-states have participated. GATT also provides a code of conduct for settled. The principles, which all GATT members are supposed to follow, include:
1 Non –Discrimination – every members of GATT is required to allow importers free access to its markets on the same basis as the access to foreign markets to which its own exporters are entitled. (Limited restrictions may be placed on trade to protect health, safety and the environment but these must be applied unfairly);
2 Equality Of Treatment – foreign companies must be treated on exactly the same basis as locally owned companies. This means that both the local and foreign companies must be subject to the same legal regime.
Generally, these principles apply whenever you trade with a GATT member. However, some developing countries are favorably exempted from some GATT provisions. This is known as the General System of Preferences (GSP). When exporting from a developing country like Nigeria to developed countries like the united States of America (USA) and European Union (EU) member-states, it will be discovered that GATT has made it easier by removing or reducing further the taxes and duties that the USA or (EU) members-states, it will be discovered that GATT has made it easier by removing or reducing further the taxes and duties that the USA or EU based buyers would otherwise have had to pay. This makes the export products cheaper and more price-competitive in the USA and European markets.
How GATT Works
Technocrats at series of meetings known as “Rounds” negotiate free trade arrangements. By 1993, there had been eight GATT Rounds. The table below shows the dates and places of each Round:
DATE PLACE HELD
1947 Geneva, Switzerland
1948 Annecy, France
1950-51 Torquay, UK
1956 Geneva
1960-62 Geneva (The Dillion Round)
1964 Geneva (The Kennedy Round)
1974-79 Tokyo & Geneva (The Tokyo Round)
1986-93 Uruguay & Geneva (The Urguay Round)
The most important Round has been the dillion Round, the Kennedy Round, and the Urquay Round. Trade tariffs and tax reductions granted by all countries in the dillion Round were valued at US$3 billion. In the Kennedy Round, these have been valued at US$30 billion.
In the past, GATT had mainly focused on the trade in commodities (Like rubber, timber, etc.) and manufactured goods. However, the Urguay Round concentrated on trade in agricultural products and services too, so that today, almost every product or service to might decide to buy or sell is regulated by GATT Agreements At the completion of the Uruguay Round, the World Bank estimated its benefits to the world economy at over US$300 billion. The fifteen European countries are said to be the main beneficiaries. This means that, it will be cashier and less expensive to sell or export to EU countries, particularly from a developing country like Nigeria.
GATT and Services
When choosing what products to deal in, you should remember that services, such as banking, insurance & technical consultancy are effectively products too. There is no reason why you can buy and sell services around the world. In fact, Services account for about 20% of world trade (US$900 BILLION) PET YEAR!
Before the Uruguay Round, trade in services was heavily restricted. It was not always easy to sell for example, an insurance service in another country. However, the Urguay Round established a new General Agreement on Trade in Services (GATS). This means that member countries must open their markets to companies providing services from other countries.
The services covered by GATS are: Banking, Accountancy, Insurance, Travel & Tourism, Advertising Telecommunications Film/ TV Productions. If you have expertise in these are opportunities to import or export theses services. The Urguay Rounds also agreed on some protection for intellectual property such as copyrights and patents so that if you want to sell copyrighted or patented items to other countries, there is now less risk that they will be stolen.
GATT and Agriculture
GATT aims to make world agriculture more efficient by improving market access and removing state subsidies. Quotas limiting agricultural trade are to be removed and replaced by tariffs, which must in turn be reduced by up to 36% for developed countries. Because subsidies would have been cut, African exports should become more price-competitive in such markets.
For traders in agricultural products (such as wheat, maize, fruit, vegetables, herbs, etc) many more markets now exist, especially, if the products are exported from Nigeria into Europe and the USA. Import duties must have been either reduced or scrapped. New opportunities are now available for exporters of agricultural products to developed countries whose government hitherto subsidized their local agricultural industries (France, Italy and Greece are examples).
GATT and Textiles
The multi-Fiber Agreement (MFA) was introduced in 1974 to place tariffs and quotas on the import of textiles and so to protect the interest of textile industries in the USA and Europe. But the Uruguay Round provided for the MFA to be phased out over a period of 10 years- that was in 1993. This change has opened up markets for textiles in the USA and Europe to low cost exports from developing countries, such as those in Africa and Asia. This provides another opening for exporters of textile products (especially, clothing) to the USA and Europe. it may be a god idea to start looking at possible buyers (chain stores, catalogue houses, etc.) in the West.
GATT Membership
There were 128 contracting countries to the General Agreement on Tariffs and Trade. The list of GATT member-countries is provided in Appendix 1.
From GATT to WTO
GATT became World Trade Organization (WTO) in April 1994. Current WTO membership includes all the countries listed in Appendix 1. The only new entrants are China and the countries of the former Soviet (USSR).
World Trade Organization (WTO)
GATT was never really an authority as such, it was merely a collection of interested member states that developed certain guidelines for conducting international trade (and also observed or ignored them) as they demand fit.
It gradually became clear that this freedom to accept GATT provisions as and when a member country desired was the system’s main weakness. It was too easy for those countries that so wished to bend the rules. Therefore, during the Uruguay Round, there was an agreement amongst members that a more rigid from of organization would enable the GATT objectives to be implemented more effectively and also enforced. Thus following the Uruguary Round, the agreement establishing the World Trade Organization was signed by the GATT member-States at Marrakech, Morocco, in April 1994, creating the WTO.
The WTO inherits all the aims that guided GATT, which is to encourage international trade free from tariffs and quotas. It also aims to work towards free employment and an increase in prosperity in the member states. The business of international trade, import and export are essential components in making world trade works.
The Objectives of WTO
The WTO is concerned that developing countries, such as those in Africa and Asia, get access to the benefits of international trade. This is why exports to developed countries such as those in Europe and the USA, now attract fewer tariffs and quotas. It should be cheaper to export from Nigeria to developed countries than to import.
The WTO is to work together with the international Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) also known as the World Bank, to develop more effective global economic polities. The WTO will also act as a forum for discussions, negotiations and the resolution of trade disputes between countries.
Finally, the WTO will hold the power to enforce its policies. Once a country is signatory to the WTO it is bound by WTO’s stipulations. There is no selective adherence as often-happened under GATT. Countries that breach WTO agreements may face serious sanctions including trade restrictions or outright embargo.
Benefits of WTO
The following are the benefits that attach to membership of WTO:
1 Market access – tariffs and other barriers to trade are reduced. On the average, across all goods and all countries, tariffs must be reduced by 30%. Members must agree that individual tariffs may only be reviewed downwards. This is knows as tarrif binding. With this international trade has become cheaper to undertake. Government are restricted in terms of import taxes they can impose and their power to regulate trade. As theses barriers are cut, new trading opportunities will emerge. For example, key areas to watch are services, agricultural products and textiles. The reduction of trade barriers is particularly extensive here;
2 Technical Barriers – technical standards are no longer used as a way of discriminating between locally produced and imported products. For example , if a product you wish to export meets the same standard as vice versa. Key areas to watch are elctronics and electrical equipment, foodstuffs, toys and consumer goods. Here technical standards have often been very complex and some liberalization should open up access to more markets, especially in European countries and the USA;
3 Import Licensing – where required, import-licensing procedures must be applied fairly and without discrimination. Written details of procedures to be followed by importers to obtain the license must be made public and provided to you by Customs. It is important to keep tract of developments in your countries of interest;
4 Pre-Shipment Inspections (PSI) – countries are entitled to subject goods to inspection in order to combat crime, fraud and evasion of duties. However, PSI must be done without discrimination and confidentially. Clear details of the procedure must be made available;
5 Anti-dumping – anti dumping legislation is permitted, but it may no longer be used against legitimate importers or exporters. In this regard, new trade opportunities may arise for you in countries, which have previously enforced strict anti – dumping legislation, such as the USA and some European countries. Products with export potential include clothing, footwear, textiles and consumer goods;
6 Rules of Origin – the country of origin is the country where the goods have either been produced or substantially produced. The WTO Agreement governs the degree of local content required for a product to be considered as originating in any particular country;
7 Customs valuations – you will be required to prove that the stated value of the goods you deal in is accurate. Accurate records must be kept;
8 Intellectual property – the WTO aims to tighten laws on the protection of intellectual property (such as copyrights and patents) in individual countries. It will also investigate the possibility of introducing enforcement;
9 Settlement of disputes – there are specific procedures (called Integrated Dispute Settlement) for the handling and resolution of disputes, and where appropriate, deals with offenders
The main benefits of these measures are less regulation and administration, fewer delays and restrictions, and therefore, lower costs for those involved in all areas of international trade. It is now easier to start and develop an international trade business than at anytime before.
Regional Trade Agreement (RTA)
It is fundamental that every international trader appreciates the concept of regional trade agreements and their implications. Basically, they are “favoritism” arrangement under which countries group together and agree to reduce or remove trading barriers amongst themselves. RTA has been a growing trend in international trade over the last 20 years. The main reasons for their existence include:
1 The perception of the European Union (the world’s largest RTA) as being very successful, especially by those in other parts of the world;
2 Doubts over the future of WTO which it is believed may fail and thus leave many countries at a great disadvantages;
3 Dissatisfaction with existing structure, particularly with what the last Uruguay Round offers; and
4 The desire for political stability and regional security are other reasons for the existence of RTAs
The main aim of most RTA is to create an increase in wealth in the individual members states. They strive to achieve this by sharing resources and know-how more effectively and by developing economics scale.
When buying from, or selling to, a country in the same RTA, it is reasonable to expect fewer restrictions on trade. Quality limits (quotas) are removed and import duties (tariffs), are less than trading with countries outside the RTA. The knowledge of RTA can, therefore, help to spot the most lucrative trading opportunities.
Most countries are both members of WTO and RTA. For example, Nigeria is a member of the economic Community of West African States (ECOWAS), as well as WTO. There are no conflicted of interests. WTO encourages RTA to operate, on the basis that their aim is to reduce or remove tariffs; that they do not erect new trading barriers to non-member states, and that their ultimate aim is a free trade area.
Where an individual country is both a member of WTO and an RTA, the provisions of each agreement are supposed to operate on a parallel basis. For example, the tariffs (or import taxes) that applies when importing goods from outside Ecowas member countries are set at WTO levels. However, if importing from an ECOWAS member country, tariffs are set at ECOWAS levels, which are usually, lower, or zero in some cases. This means that sourcing goods for import from another ECOWAS country rather than the “outside world” can be more profitable.
Types of RTA
There are about 40 regional trade agreements operating in all parts of the world. RTA comes in many forms, the four main types are:
1 Free Trade Area (FTA) – in FTA, goods are traded among member-states free of tariffs and quotas. The products may or may not include services;
2 Customs Union – this is an FTA whose member also impose uniform trade barriers on all non-members;
3 Common Market – this is both an FTA and a Customs Union where you can also freely move around services, labor and capital as well as goods; and
4 Economic Union – is a common market whose members also have common economic policies, either in full or in part.
When trading with a country, which is a member of an RTA, it pays to find out how that RTA operates as this will affect the ability to penetrate that market, and what tariffs, quotas or costs might be faced.
The Rules of International Trade
One of the factors, which intimidate many people taking up international trade for the first time, is the apparent complexity of getting goods from one country to another. Many first time exporters have lost money because of improper export documentation, as a result of which, their goods are denied entry into the foreign market. No matter what you consider to be the risks however, no nation can survive without trade; there are far too many advantages and opportunities for trading with other nations.
In order to reduce conflicts and divergences, rules have to exist in all fields of human endeavor and it must be understood that they exist to guide rather than hinder us, The objectives is that everyone works to the same set of rules and a sort of order will emerge, rather than chaos. This is the same with the rules of international trade.
But these rules per se do not guarantee cohesion; it is necessary that their meanings be clear and accepted by all. The world is made up of cultures and people of diverse tongues yet they must all relate regularly at the global market.
INCOTERMS 2000
These are basically trade terms otherwise known as delivery terms. In international trade, it is mandatory that they be conformed to since it is in the best interest of all concerned that we share the same understanding of what they mean.
Development of INCOTERMS
IN 1936, the international chamber of commerce (ICC) introduced the first set of uniformed rules for the interpretation of trade terms known throughout the world as INCOTERMS. These are available in many languages and are accepted throughout the world as simply and reliable terminology for avoiding misunderstanding between the buyers and the sellers anywhere in the world. As might be expected in such a dynamic field, INCOTERMS do not remain static. Not only will there be changing trade practices and conditions or improved means of transportation but, very often the, new definitions entirely will be called for as new trade terms and methods evolve. For example, the 1980 update INCOTERMS saw the introduction of the terms free carrier named point and freight or carriage and insurance paid to named point the latest revisions is intercom 2000, which makes further modification to covers development. (ICC) reviews INCOTERMS every 10years, he next edition will be 2010.
It is important to understand that the finer details of terms of trade of delivery are the concern of the exporter. The exporter will be the party dispatching the goods and, unless he has an in-house export= shipping department, he should hand the responsibility on to a good freight forwarder. These individuals spend their entire working lives getting goods safely from A to B, possible via X.Y or Z and are formidably efficient. A good freight forward is worth his or her weight in gold. They are an unending source of good, sound advice and are possessed of inexhaustible reserves of patient. However, they can only do, ultimately, what they are told to help them do their best, it is necessary to have an understanding of the main terms of trade that will be encountered. The current list of INCOTERMS is use is provided in Appendix 2.
It is important to not what INCOTERMS 2000 establishes a definitive relationship between seller and buyer by defining the point in the transit of the goods, where the responsibility for both costs and risks change between seller and buyer. This is very important not only for these tow factors, but also for the applications for title to the goods, and for any subsequent insurance claims.
A contact of sale will arise when the buyer and seller have been able to accept all the terms offered by the one to the other. Whilst it is true that contain regulations may need to be observe in reaching contractual agreements, it can be safely assumed that the parties to the contract have complete freedom to decide between each other how the contract will be fulfilled. In an international trade contract, this will come down to basic questions, such as:
- When does the title (or ownership) of the goods pass from seller to buyer?
- Who will bear the various associated cost?
- Who will carry which risks, and at what time?
It is seldom practical to spell out chapter and verse of each contract of sales. Therefore, a “shorthand contract” will do in all but the more complicated cases. The shorthand version will simply state that a certain quantity of goods is ordered at a certain time, at a certain price, for delivery at a certain place. What are know as “general standard conditions” will be used. These allow the parties to act in accordance with a pre-established set of rules, which can be incorporated into their contract. Once these general conditions are agreed upon, and accepted, them they are binding on the parties. The INCOTERMS are such a general set of standard and established conditions.
Whilst we are only considering INCOTERMS here, it is vital to bear in mind that they are not the only example of standardized trade terms. The average international trade need not have a in dept knowledge of the terms contained in order codes and, should the other party suggest them, the advice of a god freight forwarder or a bank should be sought. Amongst these other codes are:
- The American Foreign Trade Definition (1919). These were actually abandoned in favour of the adoption of INCOTEMS 1980 by their supporters:
- The Rules and Warsaw & Oxford (Proposed their International Law Federation 1932).
- The General Conditions For Delivery of Merchandise (1968, Eastern European).
- Combiterms (1969). This was also revised to make it compatible with INCOTERMS 1980
It is anticipated that any future revision will follow INCOTERMS 2000 definition, which are the most widely used and understood trade terms in the entire world. Individual INCOTERMS are explained in Appendix 3.
When using INCOTERMS, it should be borne in mind that in the event of a dispute, there is no automatic recourse to arbitration by the ICC. The fact of incorporating one or more INCOTERMS into any contract or into any related correspondence does not in itself constitute an agreement to have recourse to ICC arbitration, unless a standard ICC arbitration clause has been specifically stated in the contract.
CHAPTER 2
UNDERSTANDING THE NIGERIAN BUSINESS ENVIRONMENT
Before now, Government-owned enterprises mostly dominated the Nigerian economy and these were very unproductive and inefficiently managed. Finally, in 1989 the government realized it had no business being in business, and set up the Technical Committee on Privatization (TCPC). However, with the change of government came a new body known as the Bureau of Public Enterprises (BPE), charge wit the responsibility of implementing the privatization of government-owned enterprises. Similarly, a presidential advisory commission known as National Council on (NCP), was set up to advice government on its privatization program. The vice-president heads the NCP. The role of the two bodies is complementary.
Most analysts view privatization as a way out of Nigeria’s deplorable state of economic infrastructure. Such institutions like the National Electric Power Authority (NEPA). Nigeria Telecommunication (NITEL) and the Refineries, it is believed, can only function more effectively after privatized.
The Nigerian economy is more of a distributive than a producing economy. The major types of business include mining, oil and gas exploration, manufacturing, and commerce and service providers. Not less than 40 percent of business activities are concentrated in Lagos area alone.
The following charts illustrate the segments of the National business environment.
Nigeria Business Environment
CHART 1
Industry
CHART 2
Craft & Vocational Activities
Agriculture & Forestry Manufacturing Building & Construction
Commerce
CHART 3
Warehousing & Customs Services Transport & Communication Insurance Banking & Finance Advertising, Public Relations Trade
Industry
CHART 4
Hotel & Tourism e.t.c Government & Utilities Education, Research & Security Health Services Professional Group
The mining business includes oil exploration and mineral extraction by the various mining and oil companies in Nigeria. Production is concentrated in Cross River, Imo, Akwa Ibom, Edo, Ondo and Delta States. Others are Abia, Amambra and Lagos States, as well as a number of offshore activities.
Building and Construction activities are widely distributed along government projects around the country. The level of activities in this industry is closely related to the government revenue available for executing construction projects. The seasonal nature of some of the building projects is such that demand for building materials is higher during dry season.
The manufacturing businesses is dominated by import substituting venture, operating mainly with imported raw materials and are largely located around Lagos. Aba, Kano, Kaduna, Onitsha and few other states.
Lagos-scale agricultural ventures are dominated by a few rich farmers and companies scattered across the country, especially in the cultivation of cereals and livestock production. Small-scale producers in the Southern parts of Nigeria dominate tree cash crop productions like cocoa, palm oil and palm kernel. The major growing areas of root crops and cereals are the middle-belt and the Northern Parts of Nigeria. Government activities in agriculture production have drastically decreased in the past few years.
Vocational activities include automobile repairs, tailoring, arts & craft and so many others. These activities are distributed along with population spread.
Distributive trade is responsible for over 50 percent of the business activities in Nigeria. This is distributed following the population spread with heavy concentration in the thickly populated towns and cities.
The export and import businesses are concentrated in the cites around ports like Lagos, Port Harcourt and Calabar. The export products are diverse in nature, from materials to capital goods and general merchandise. Government activities are visible through Customs Services. There are various institutions set up to assist exporters e.g. Nigerian Export Production Council (NEPC). Nigeria Export Import Bank (NEXIM) Association of Nigeria Exporters (ANE), Chambers of Commerce, commercial banks, merchant banks, etc.
The professional groups provide a wide range of services like accountancy, financial, legal medical, architectural, engineering, surveying, and so on. These activities are also concentrated around the industrial areas where such services are in high demand. Others include educational services, health services, defense; etc. Government activities are visible in these areas. Private entrepreneurs also compete with government to provide these services.
The Transport and Communication Services are essential components of the Nigerian business activities. Transport serves to reduce spatial constrains in the conduct of business activities. Private companies, individuals and government are actively involved in the transport sector (land, air, rail & sea), and also in the communication business (telecommunication services, postal services, courier services, radio and television(.
The utility sector includes the National Electric Power Authority (NEPA) and the various water corporations. There are only a few private initiative in these areas. Hotels and tourism are gradually being developed and private companies; institutions and individuals are getting actively involved all over the country.
The Corporate Affairs Commission (CAC)
The Companies and Allied Matters Act, 1990 (CAMA) is the principal law regulating the incorporation of business in Nigeria. The Corporate Affairs Commission undertakes the administration of the Companies Act and its functions include.
1 Regulation and supervision of the formation, incorporation, registration, management and winding up of companies;
2 The maintenance of the Companies Registry;
3 The conduct of investigation into the affairs of any companies in the interest of shareholders and the public.
Legal Framework for Operations of Foreign Companies in Nigeria
All business enterprises must be registered with the Corporate Affairs Commission. A foreign investor wishing to set up any business enterprises in Nigeria should take all steps necessary to obtaining incorporation as a separate entity in Nigeria. Business activities may be undertaken in Nigeria under the following legal contrivances;
i. Private or Public limited liability company;
ii. Unlimited liability company;
iii. Company limited by guarantee;
iv. Partnership;
v. Sole Proprietorship;
vi. Incorporated trustees;
Until so incorporated, the foreign company may not carry on business in Nigeria or exercise any of the powers of a registered company;
The NIPC is the government agency for assisting foreign investors in establishing business in Nigeria. Details of the NIPC operations can be assessed on the Internet: www.nipc-nigeria.or
Exemption to the General Rule
Where exemption from local incorporation is desired, a foreign company may apply in accordance with Section 56 of the Companies Act, to the Federal Executive Council for exemption from the requirement to register locally if such foreign company belongs to one of the following categories:
1 Foreign companies invited to Nigeria by or with the approval of the Federal Government of Nigeria to execute any specified individual project:
2 Foreign, which are Nigeria for the execution of a specific individual loan project on behalf of a donor country or international organization;
3 Foreign government-owned companies engaged solely in export promotion activities; and
4 Engineering consultants and technical experts engaged in any individual specialist project under contract with any of the local, state or federal governments in the federation or any of their agencies or with any other body or person, where such contract has been approved by the federal government.
The application for exemption is made to the secretary of the government of the federation (SGF) setting out eight specified particulars and such other particulars as may be required by the SGF. If successful, the request of the applicant is granted.
Foreign companies may also set up representative offices in Nigeria. A representative office however, cannot engage in business, conclude contracts, open or negotiate any letters of credit. It can only serve as a promotional and liaison office and its local operational expenses have to be brought-in from the foreign company. A representative office has to be registered with the Corporate Affairs Commission (CAC).
Principal Laws on Foreign Investments
The Principal laws regulating foreign investments are:
1 The Nigerian Investment Promotion Commission (NIPC) Act No. 16 of 1995;
2 The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act No. 17 of 1995;
3 The Companies and Allied Matters Act 1990;
4 Investment and Securities Act;
5 The Industrial Inspectorate Act;
6 The Immigrations Act; and
7 The National Office of Industrial Property Act;
Effectively, the Nigerian Enterprises promotion (Repeal) Decree No 7 of 1997 has abolished any restrictions in respect of the limits of foreign shareholding in any enterprise registered in Nigeria.
The only enterprises that are still exempted from free and unrestrained foreign participation are those involved in production of arms and ammunition, production of narcotic drugs and psychotropic substances.
The Nigeria Investment Production Commission (NIPC) was established by Decree No. 16 of 1995 (NIPC Act) as the successor to the Industrial Development Coordination Committee (IDCC). The Commission acts as a liaison between foreign enterprises and relevant government departments to, among other functions.
1 Co-ordinate, monitor, encourage and provide necessary assistance and guidance for the establishment and operation of enterprises in Nigeria.
2 Initiate and support measures which shall enhance the investment climate in Nigeria for both Nigerian and non-Nigerian investors;
3 Promote investments in and outside Nigeria through effective promotional means;
4 Collect, collate, analyze and disseminate information about investment opportunities and sources of investment capital and advise on request, the availability, chance or suitability of partners in joint-venture projects;
5 Register and keep records of all enterprises to which the NIPC Decree legislation applies;
6 Identify specific projects and invite interested investors for participation in those projects;
7 Initiate, organize and participate in promotional activities such as exhibitions, conferences and seminars for the stimulation of investments;
8 Maintain liaison between investors and ministries, government departments and agencies, institutional lenders and other authorities concerned with investments.
9 Provide and disseminate up-to-date information on incentives available to investors;
10 Assist in-coming and existing investors by providing support services;
11 Evaluate the impact of the Commission in investment in Nigeria and recommend appropriate remedies and additional incentives;
12 Advise the federal government on policy matters, including fiscal measures designed to promote the industrialization of Nigeria or the general development of the economy; and
13 Perform such other functions as are supplementary or incidental to the objectives of the NIPC Act.
Highlights of the NIPC Act Relating to Investments
Notable amongst the provisions relating to investments are the following;
1 A non-Nigeria may invest and participate in the operation of any enterprise in Nigeria;
2 An enterprise in which foreign participation is permitted, shall after its incorporation or registration, be registered with the NIPC,
3 A foreign enterprise may buy the shares of any Nigeria enterprise in any convertible foreign currency; and
4 A foreign investor in an approved enterprise is guaranteed unconditional transferability of funds and repatriation of profits through an authorized dealer, in freely convertible currency.
Arbitration and Conciliation
The Arbitration and Conciliation Act (the Arbitration Act) of 1988 was promulgated with the declaration intention of providing a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation. The act also makes the Convention of the Recognition and Enforcement of Arbitral Awards (New York Convention) applicable to any award in Nigeria or indeed, in any contracting State arising out of international commercial arbitration.
INVESTMENT PROTECTION ASSURANCE
The NIPC Act provides that:
1 No enterprise shall be nationalized or expropriated by any Government of the Federation; and
2 No person who owns, whether wholly or in part, the capital of any enterprise, shall be compelled by law to surrender his interest in the capital to any other persons.
There will be no acquisition of an enterprise by the Federation Government unless the acquisition is in the national interest or for a public purpose under a law, which makes provision for;
1 Payment of fair adequate compensation; and
2 A right of access to the courts for the determination of the investor’s interest of right and the amount of compensation to which he is entitled.
Compensation shall be paid without delay and authorization given for its repatriation in convertible currency where applicable.
Steps for Establishing Companies in Nigeria with Foreign Shareholding
Step 1
a. Established partners/shareholders and their respective percentage shareholding in the proposed company.
b. Establish name, initial authorized share capital and main objects of proposed company.
c. Prepare Joint-Venture Agreement between prospective shareholders, (except in instances where the proposed company will e 100% owned by alien shareholders) The Joint-Venture may specify mode of subscription by parties, manner of Board Composition, mutually protective quorum for meetings, specific actions which would necessitate shareholder’s approval by special or other resolutions.
d. Prepare Memorandum and Articles of Association.
e. A foreign shareholder may grant the power of attorney to his Solicitors in Nigeria, enabling them to act as his agents in executing, incorporating or performing of other statutory duties pending the grant of Business Permit (i.e. formal legal status for foreign branch/subsidiary operations)
f. Conduct a search as to the availability of the proposed company name and, if available, reserve the name with the Corporate Affairs Commission (CAC)
g. Effect payment of stamp duties, CAC filing fees, process and conclude registration of the company as a legal entity.
STEP 2
a. Obtain “Tax Clearance Certificate” for the newly registered company
b. Prepare Deeds of Sub-Lease/Assignment, as may be appropriate, to reflect firm commitment on the part of the newly registered company to acquire business premises for its proposed operations.
STEPS 3
a. Prepare and submit simultaneous applications to the NIPC ) on the prescribed NIPC Application Form) for the following approvals:
i. Business Permit and Expatriate Quota;
ii. Pioneer Status and other incentives (where applicable)
b. The application to the NIPC should be accompanies by the following documents:
i. Copies of the duly completed NIPC Form;
ii. Copies of the treasury receipt for the purchase of the NIPC Form.
iii. Copies of the Certificate of Incorporation of the applicant company;
iv. Copies of the Tax Certificate of the applicant company;
v. Copies of the Memorandum and Articles of Association;
vi. Copies of treasury receipt as evidence of payments of stamp duties on the authorized share capital of the company as at the date of application;
vii. Copies of the Joint-Ventures Agreement-unless 100% foreign ownership is envisaged;
viii. Copies of feasibility Report and Project Implementation Program of a company its proposed business. (It is advisable that quotations, letters of intent and other such documentations relating to industrial plant and machinery to be acquired by the company be forwarded either as annexes or separately. In order to discourage the dissipation of administrative energy on speculative applications, the NIPC favors the applicant who has demonstrated positive intention to commence business as and when approvals are granted. This is why the evidence of acquisition of business premises and evident to having sourced the plant and machinery to be used in the company’s business is required);
ix. Copies of Deeds(s) of Sub-Lease/Agreement evidencing firm commitment to acquire requisite business premises for the company’s operation;
x. Copies of training program or personnel policy of the company; incorporating management succession schedule for qualified Nigerians.
xi. Particulars of names, addresses, nationalities and occupations of the proposed directors of the company;
xii. Job title designation of expatriate quota positions required, and the academic and working experience required for the occupations of such position. It is pertinent to note that expatriate quota on a “Permanent Until Reviewed” (PUR) status is only accorded to a Managing Director where the non-resident shareholders own a majority of the company’s shares, and the authorized capital of the company is N5 million and above;
xiii. Copies of information brochure on foreign shareholder (if available) as testimony of international expertise and credibility of the foreign partner in the proposed line of business.
STEP 4
a. Having obtained the requisite NIPC approvals and Business Permit Certificate, the non-resident shareholder must act with dispatch to import its foreign equity holding in the company. To ensure prompt importation of the foreign equity, the NIPC may grant business permit but defer approvals for expatriate quota and Pioneer Status and other applicable investment incentive, until evidence of capital importation is submitted;
b. After obtaining Certificate of Capital Importation from the bank, the NIPC is to be notified of this fact with the supporting documentation, I order for it to resume processing of pending approvals that might have been deferred on such ground;
c. As soon as the expatriate quota positions are granted and the respective individuals to fill the quota positions are recruited, the company must embark on steps to obtain work permit and residency status for the expatriate employees and their accompanying spouses and children (if any)
The promoters of business ventures in Nigeria are to free to appoint directors of their choice, either foreign or Nigeria, and the directors may be resident or non-resident. The application to the NIPC must reflect the names of the proposed Nigerian and foreign directors (with an indication of resident and non-resident directors). The Business Permit Certificate subsequently issued following such application usually reflects the respective names of the proprietors of the company as well as the directors representing each proprietor or co-proprietor.
Payments of foreign director’s fees are remittable in the same manner as dividends accruing to the foreign company. However, since such fees are taxed at source (5% as a withholding tax), each foreign director’s fees are remittable subject to satisfactory evidence that the taxable amounts on such fees have been paid.
Regulatory Agencies
Standards Organization of Nigeria (S.O.N)
The Nigeria Standards Organization Act 1971 is a integral part of the Federal Ministry of Industries established to carry out among other things, he following functions;
To designate, establish and prove standards in respect of methods, materials, commodities, structures and processes for the certification of products in commerce and industry throughout Nigeria.
To compile Nigerian standards specifications;
To ensure compliance with designated standards;
To establish a quality assurance system including certification of factories, products and laboratories;
To develop methods for testing of materials, supplies and equipment items purchased for use by public and private establishment;
To undertake preparation and distribution of standards samples;
To establish and maintain laboratories necessary for the performance of its functions.
With a payment of a nominal fee, it is possible to obtain from the offices of the Standards Organization of Nigeria the prescribed standards for your products.
National Agency for Food and Drug Administration and Control (NAFDAC)
NAFDAC was established in 1993 with powers to regulate and control the importation, exportation, manufacturing, advertisement, distribution, sale and use of food, drugs, cosmetics, medical devices, bottled water and chemicals. No drug, cosmetics or medical device shall be manufactured, imported, exported, advertised, sold or distributed in Nigeria unless it had been registered in accordance with the provisions of NAFDAC and regulations made under the 1993 Act.
Trade Malpractices Decree 1992
This Law creates certain offences relating to trade malpractices and sets up a Special Trade Malpractices Investigation Panel to investigate such offences. The Law provides against any person who:
Finally labels, packages, sells, offers for sale or advertises any product so as to mislead as to its quality, character, bank, name, value, composition, merit or safety; or
For the purpose of sale, contract or other dealing, uses or intends to use any weight, measure or number which is false or unjust; or
Sells any product by weight, measure or number and delivers to the purchaser a less weight, measure or number than is purported to be sold.
Advertises or invites subscription for any product or project which does not exit.
Non-Oil Export Policy Reforms
From 1986, government introduced and continued to administer a number of far-reaching economic measures and institutional reforms, aimed at promoting non-oil exports. These measures were designed to provide subsidies and rebates needed to reduce production cost, boost production, stimulate and diversify exports.
Investment Incentives
With the past few years, the government had progressively introduced a number of designed to promote investment, employment, product mix and various other aspects of industry. These incentives encompass:
a. Fiscal measures on taxation
b. Effective protection of local industries with import tariff;
c. Export promotion of Nigeria-made products; and
d. Foreign currency facilities for international trade.
Enterprises, which fulfill the necessary criteria, are free to apply for the specific incentives outlined below;
Pioneer Status- 100 percent tax-free period for 5 years for pioneer industries that produce products declared as “pioneer products” under the Industrial Development (Income Tax Relief) Act No. 22 of 1971 as amended in 1988, or such other deserving enterprises as may be approved by the Council of the Nigerian Investment Promotion Commission (NIPC)
Local Raw Materials Utilization- 30 percent tax concession for five years to industries that attain minimum local raw materials utilization as follows:
Industrial Minimum Sector Level
Agricultural 80%
Agro-Allied 70%
Engineering 60%
Chemical 60%
Petrochemical 70%
Labor Intensive Mode of Production- 15 percent tax concession for five years. The rate is graduated in such a way that an industry employing 1,000 persons or more will enjoy the 15 percent tax concession while an industry employing 100 will enjoy only 6 percent, while those employing 200 will enjoy 7 percent and so on.
Local Value Added- 10 percent tax concession for five years. This applies essentially to engineering industries where some finished imported products serve as inputs. The concession is aimed at encouraging local fabrication rather than the mere assembly of completely knocked-down parts.
In-Plant-Training- 2 percent tax concession for five years on the cost of facilities provided for training.
Export-oriented Industries- 10 percent tax concession for five years. This concession will apply to industries that export not less than 60 percent of their products. The emphasis is on the encouragement at the pre-establishment stage of export-oriented enterprises.
Infrastructure- 20 percent of the cost of providing basic infrastructure such as roads, water, electricity where they do not exist is deductible once and for all from the tax.
Investment in Economically Disadvantage Area: 100 percent tax holiday for 7 years, and an additional 5 percent depreciation allowance over and above the initial capital depreciation.
Research and Development (R and D)- 120 percent tax deductible expenses provided the research and development is carried out in Nigeria and 140 percent for R and D on local raw materials.
Excise Duty- In order to boost local industries, stimulate export trade and reduce coast, government abolished most excise duties effect from 1st January 1998. However, in order to safeguard the health of our citizens, government had re-introduced Excise Duty on tobacco, cigarettes and spirits. Thus, with effect from 1st January, 1999, excise duties on these products are as follows:
-Spirits and other spirituous alcohol- 40%
-Cigarettes, cigars, cheroots and cigarillos 40%
Double Taxation Agreement
Double Taxation Agreement are being negotiated and concluded with governments of various countries. The desired objective is to eliminate double taxation on investment income.
Re-Investment Allowance
This incentive is granted to companies engaged in manufacturing, which incur qualifying capital expenditure for the purpose of approved expansion. The incentive is in the form of a generous allowance on capital expenditure incurred by companies for the following;
-Expansion of production capacity
-Modernization of production facilities; and
-Diversification into related products.
This scheme aims to encourage re-investment of profit.
Investment Tax Allowance
Apart from the capital allowance currently in existence, consideration may be given to the introduction of investment tax allowance. Under this scheme, a company would enjoy generous tax allowance in respect of qualifying capital expenditure incurred within 5 years from the date of approval of the project.
Tax Relief on Interest Income
Interest accruing from loans granted by banks in aid of export activities enjoys favorable tax relief.
Capital Asset Depreciation Allowance
The law in Nigeria provides an additional annual depreciation allowance of 5% on plants and machinery to manufacturing exporters who export at least 50% of their annual turnover, provided that the product has at least 40% local law material content or 35% value added.
The incentives itemized here are not exhaustive and neither is the percentage of relief and incentives mentioned fixed for all times. The would be investor is therefore, advised to ascertain the current operative figures at the time of making his investment.
Nigerian Export-Income Bank
The Nigeria Export Import Bank (NEXIM) was established as an export credit agency replacing the Nigerian Export Guarantee and Insurance Corporation. NEXIM, which commenced operations in January 1991, has statutory functions, which include.
- Export credit guarantee and export insurance facilities;
- Credit in local currency in support of exports;
- Domestic credit insurance and reinsurance where such a facility is likely to assist exports;
- Credit insurance in respect of external trade, transit trade;
- Investment guarantee and investment insurance facilities;
- The establishment and management of funds in the form of mutual export guarantee funds to support Nigeria exporters;
- Purchase and sale of foreign currency and transfer of funds to all countries;
- Maintenance of a foreign exchange revolving fund for lending to exporters who need to import foreign inputs to facilitate export production;
- Maintenance of a trade information system in support of export business.
NEXIM facilities includes trade finance, project finance, treasury operations, export advisory services, market information, exporter education services and guarantees to enhance its functions. Exporters have access to these facilities only through commercial and merchant banks operating in the country. Advisory and foreign market information services may be obtained directly by exporters from NEXIM.
NEXIM provides a rediscounting and refinancing facility (RRF), which is designed to assist banks to provide pre and post-shipment finance in local currency in support of non-oil export. Sourcing of raw materials by exporters may also be made easier by NEXIM foreign input facility (FIF) and stock facility. FIF provides the export sector with immediate foreign exchange requirements needed for the importation of raw materials and capital equipment needed for production of goods for export. Stock facility is made available in local currency to assist manufacturers of exportable goods to procure local raw materials. NEXIM may be accessed on the Internet at; www.neximbank.com.ng
Exchange Rate Policy
The exchange rate control system of foreign exchange allocation was discarded on September 26, 1986, in order to evolve an exchange rate mechanism that would be more responsive to the prevailing economic conditions.
Thus, a market-based exchange rate system was introduced as a means of achieving a realistic exchange rate for the Naira. In September 1989, the government opened a new window for market-based transactions. It authorized the Bureau De Change to transact business in foreign currency notes and travelers’ cheques at rates negotiated with buyers and sellers. But, by January 1995, there was a policy reversal to that of “guided deregulation”. This necessitated the institution of the Autonomous Foreign Exchange Market (AFEM) and further liberalization of foreign exchange dealings through the active participation of Bureau De Change in the AFEM. The major goals of the new policy were to build-up and strengthen “external serves” to enhance confidence in the Nigeria economy, strengthen the Naira and pave way for it’s sustained stability and ultimate convertibility. These policy measures have not been entirely successful due to problems associated with the booming in parallel (black) market activities. The current exchange rate policy in operation is the Dutch auction system. Under this system, banks (called authorities) bid for dollars at the Foreign Exchange Market (FEM) on behalf of their customers. The Central Bank of Nigeria (CBN) then sells to the highest bidder before selling to others. The objective of the new monetary system had been to crash the ratio of the Naira to N127 to a dollar.
Fiscal Policy Measures
The Federal Government has also adopted measures, which are intended to reduce the size of government and correspondingly expand the private sector, rationalize government expenditure, reduce budget deficits; minimize the burden of external dept on the people; and stimulate domestic production and exports. The measures include the privatization and commercialization of public enterprises. Rationalization of public expenditure, introduction of debt rescheduling and debt conversion measures and tariff reforms. It is hoped that these reforms will encourage competition, increase efficiency in private sector business operations, and make Nigerian products internationally competitive.
External Sector Policy
The introduction of AFEM in 1995 was accompanied by the abolition of import and export licensing and exchange control measures. The list of prohibited import items was also reduced from 74 to 16. The previous requirement that Nigerian resident should surrender their foreign exchange to the Central Bank of Nigeria was also abolished. Consequently, exporters and other foreign exchange earners now enjoy 100 percent of their foreign could freely draw to meet their foreign exchange transactions. The 30 percent import levy introduced in January 1986 was also abolished. In a bid to promote exports, the Duty Drawback/Suspension Scheme was introduced. This enables importers and producers to import raw materials and intermediate products for use in the manufacture of export producers. Free of import duty and other indirect taxes and charges.
Agricultural
In 1988, the government introduced a new agricultural policy/blueprint which reflected the new government philosophy of minimum administrative control of economic activities and gave wide scope for free market forces in the economy, as well as a greater role for the private sector and more emphasis on economic self sufficiency and self-reliance in Nigeria. As a result of this deregulation, the agricultural input subsidy was substantially reduced.
Prominent among the institutional reforms were the abolition of the “commodity boards” which hitherto had monopoly over the purchase and export of agricultural produce; and the privatization of many agricultural enterprises formally run by the public sector. Under the new policy, farmers are now free to sell their produce at both the local and international markets. This market deregulation is supported by attractive export incentives such as a 100 percent foreign currency retention scheme for repatriated export proceeds.
Manufacturing
In this sector, government policies are directed at addressing factors such as inadequate supply of imported raw material input and spare parts, which amongst others. Reflect in gross under-utilization of installed production capacity. The policy programs are designed to encourage.
1 Acceleration industrial development and use of local raw materials;
2 Development and utilization of local technology;
3 Maximum growth in value-added manufacturing production;
4 Promotion of export-oriented industries
5 Increase in employment through encouraging the private sector;
6 Minimization of bottlenecks/constraints that impede industrialization
7 Creation of an investment friendly environment.
The priority areas of industrial investment, which is favored in the administration of government industrial incentives are those described here below.
1. Industries which can either immediately or in a few years time source their raw materials locally e.g. in the agro and agro-allied sub-sectors for which there are abundant natural resources in Nigeria, including food preparations, e.g. fruit drinks, cereal milling, feed mills and vegetable oil processing;
2. Industries that support food production programs through local manufacture of chemicals, equipment and light commercial vehicles in particular, and chemical as well as petrochemical-based manufacturing industries in general.
3. Industries with multiplier effect such as flat sheet mills and machine tools industry, including foundries and engineering industries for spare parts production;
4. Basic industries in petrochemical and liquefied natural gas projects; the government welcomes foreign partners;
5. Processing of local agricultural produce and minerals into industrial raw materials as manufactured intermediate goods required by existing industries in Nigeria.
6. Investment in research institutes, particularly in the area of adaptive research and commercialization of local inventions;
7. There are nine (9) priority sub-sectors that possess the ability to stimulate the laying of a favorable industrial base and provide a catalyst to industrialization in Nigeria. These pilot sub-sectors are:
- Foundry and forges;
- Metal fabrication;
- Pharmaceutical;
- Food processing;
- Leather and leather products;
- Textiles and wearing apparels;
- Non-metallic building materials- bricks, ceramics and glass
The government of Nigeria welcomes foreign investors’ participation not only in these but also in the following project areas:
1 Gemstone cutting and polishing;
2 Gold processing;
3 Mineral beneficiation plants for gypsum, talc, kaolin, marble, dolomite, barite;
4 Mini-sugar production plants
5 Cement production;
6 Lead and zinc processing;
7 Refractory bricks;
8 Processing of salt from sea water;
9 Sodium phosphate production
10 Small/medium scale plant for metal sheet production;
11 Long fiber pulp/kraft paper production;
12 Bottled mineral water;
13 Mining of industrial minerals;
14 Telecommunications.
Export Incentives
In order to enhance non-oil exports, the federal government promulgated the (Export Incentives and Miscellaneous Provisions) Decree No. 18 of 1986. This Decree and its subsequent amendments provides for a number of incentives, designed to encourage and promote export activities in the non-oil sector of the economy. In addition, institutional and administrative structures were thereafter established to manage and supervise the various incentives to ensure that they are implemented accordingly. Various legislations account form the large package of incentives, which are today available to persons wishing to export from Nigeria. Some of these incentives range from cash grants to duty and tax reduction and cancellation. Following are the details of the export incentives.
Refinancing and Rediscounting Facility (RRF): This facility was instituted to provide liquidity to banks in support of their export financing activities. The facility was introduced in 1987 with the Central Bank of Nigeria (CBN) as the implementing agency until January 1991 when the Nigerian Export Import \Bank (NEXIM) took over the responsibility for implementation.
Foreign Input Facility (FIF): This scheme is meant to assist exporters to import raw materials required to produce exportable items. It took off in may 1989 with the signing of the African Development Bank Export Stimulation Loan (ADB/ESL) Agreement. CBN was also the executing agency until January 1991 when NEXIM took it over.
Retention of Export Proceeds in Foreign Currency: Under this scheme, exporters of Nigeria commodities are obliged to open a foreign currency Domiciliary Account (D/A) with an authorized bank of its choice in Nigeria into which 100% of the proceeds of such export may be credited in foreign currency.
Export Credit, Guarantee and Insurance Scheme: The scheme is designed to assist banks and exporters to minimize the risk in export business and facilitate export finance through granting of credits for export production. The CBN was also the implementing agency until 1991 when NEXIM took it over.
Duty Draw-back Suspension and Manufacture-in Bond Scheme: Introduced in 1988, it is designed to ensure the refund of import duty paid on raw materials imported for the manufacture of export products. In addition to the retention of 100^ of export proceeds by exporters, a Duty Draw-back/Suspension Scheme has recently been approved in order to further encourage manufacturing for the export market. Exporters/producers can import raw materials and intermediate products for use in the manufacture of export products free of import duty and other indirect taxes and charges. The scheme covers a rebate of duties already paid on imported inputs and the suspensions/exemption from the payment of such duties by exporters.
To quite for duty draw-back payments, the actual exportation of the products which were produced with imported inputs must be completed within 18 months from the date of the importation of the inputs. Duty suspension becomes a permanent waiver of duty payment only inputs imported under the suspension scheme are used to produce exportable products and are exported within 12 months of the importation.
The Manufacture-in-Bond-Scheme involves the importation of duty-free raw materials for the production of exportation goods, on the basis of a bond issued by a first-class bank, which guarantees that all the end-products will be exported. The performance bond will be discharged after evidence of exportation and repatriation of foreign exchange has been produced. Raw materials under import prohibition could be imported under this scheme. An exporter wishing to benefit from Duty Draw-back, Duty Suspension or Manufacture-in-Bond Scheme is to direct his application for participation to the Nigeria Export Promotion Council (NEPC).
Export Expansion Grant Fund Scheme (EEGF): The objective is to provide cash inducement to manufacturing companies to encourage them to produce for export rather than for domestic consumption. The implementing agency is the NEPC. This provides cash inducement for exporters that the have exported a minimum of N50,000 worth of semi-manufactured products. To cash incentive is to enable such exporters to increase the volume and value of export and diversify their export products and market coverage. Since 1997, government approved a uniform rate of 4% of repatriated foreign exchange as basis for calculation of the export expansion grant. In addition, the autonomous exchange rate is applied in computing the value of the export expansion grant paid to beneficiary exporters. This fund is only available to exporters who have repatriated full proceeds from their export transaction. The repatriation must be certified by the CBN to be eligible.
Tax Relief on Interests Earned by Banks on Export Credit: Introduced in 1986 to encourage banks to finance exports; the Federal Board of Inland Revenue (FBIR). (now Federal Inland Revenue Services (FIRS) reduced their taxable income.
Export Development Fund (EDF)
The EDF is a special fund set up by the government to provide financial assistance to private sector exporting companies to cover a part of their initial expenses in respect of the following export promotion activities.
- Participating in training courses, symposia, seminars and workshops on all aspects of export promotion;
- Export market research
- Advertising and publicity companies in foreign markets, including press/radio/television, catalogues, brochures; etc
- Product design and consultancy
- Participating in trade missions, buyer-oriented activities, overseas trade fairs, exhibitions and store promotion;
- Cost of collecting trade information
- Organizing of joint export groups and mutual export guarantee associations;
- Backing up the development of export-oriented industries.
The conditions for qualifying for assistance from the Fund are as follows;
The exporting company must be registered as an exporter with the Nigerian Export Promotion Council (NEPC) and must be an exporter of any product of Nigeria origin with at least 35% value added or 40% local raw material content of services e.g. engineering, consultancy, and shipping. In addition to a satisfactory status report, such a company must have its marketing control in Nigeria. All application for EDF assistance have to be made on the authorized application forms from NEPC and accompanied with a detailed work plan of the project to be undertaken, plus, a detailed report of past activities.
1 Supplementary Allowance in Favor of Pioneer Companies, and Accelerated Depreciation and Capital Allowance: Pioneer status and additional depreciation allowance of 5 percent is granted to a manufacturer who exports at least 50 percent of its products annually. The operating agencies are the NEPC and FIRS.
2 Abortion of Export Licensing: It is meant to remove administrative obstacles in the export sector as much as possible. The Federal Ministry of Commerce and Tourism is the implementing agency.
3 Export Adjustment Fund Scheme: It is designed to compensate exporters of products whose foreign price are relatively unattractive. The NEPC is the implementing agency. This scheme serves as a supplementary export subsidy to compensate exporters for the high cost of local production arising mainly from infrastructure deficiencies and other negative factors beyond the control of the exporter.
4 Subsidy Scheme For Use of Local Raw Materials in Export Production: It is designed to encourage exporters to use local raw materials in export production. The implementing agency is the NEPC.
Analysts believe that with so many government incentives for serious investors in these sub-sectors, Nigeria has become the new investors’ paradise in Africa. The adoption of a realistic foreign exchange policy would reduce scarcity and ensure more efficient allocation of foreign exchange resources. Tariff reforms would provide more incentives for developing locally produced raw materials, while limited imports of raw material and spare parts as well as, increased export of manufactured products would also be achieved. It is hoped that these reforms will encourage competition, increases efficiency in private sector business operations, and make Nigeria products internationally competitive.
Export Manufacture
A recent study by the Federal Ministry of Industry has identified manufactured products for export market for which Nigeria has comparative advantage to other countries. These include;
a. Agricultural produce processing, foods and beverages;
b. Textiles: yarn/textiles, apparel, leather and products of leather (including footwear of rubber and plastics);
c. Wood: furniture;
d. Paper, paper products;
e. Iron and steel, non-ferrous metals;
f. Fabricated metal products; and
g. Consumer durables.
It is recommended that industries in Nigeria should specialize in these sectors in which it is fund that Nigeria has comparative advantage relative to the operation of such industries in other countries.
Solid Minerals
Government policy on solid minerals is aimed at promoting the growth in private sector participation and increasing the output of solid minerals. There was a general lull in solid minerals exploration throughout the eighties and early nineties. This informed the establishment of the Federal Ministry of Solid Minerals, with the mandate to evolve appropriate polices and machinery for the rapid expansion and steady development of the sector in the country.
The information on solid minerals below is an extract from a recent study conducted by the Federal Ministry of Solid Minerals and published by the Nigerian Investment Promotion Commission. The solid minerals highlighted here also indicate potential areas of investment opportunities in Nigeria.
Talc: Over 40 million tones deposits of talc have been identified in Niger, Osun, Kogi, Ogun and Kaduna states. The raw Materials Research and Development Council (RMRDC) has the only talc plant in the country, and processes 3,000 tones per annum. The talc industry represents one of the most versatile sectors of the industrial minerals of the world. The exploitation of the vast deposits would, therefore, satisfy both local and export demand.
Gypsum: Gypsum is an important input for the production of cement. It is also used for the production of Plaster of Paris (P.O.P) and classroom chalks. A strategy for large-scale mining of gypsum used in the cement industries is urgently required to sustain the existing plants and meet the future expansion. Currently, cement production in Nigeria is put at 8 million tones per annum, while the national requirement is 9.6 million tones. About one billion tones of gypsum deposits are spared over many states in Nigeria.
Iron Ore: There are over 3 billion metric tones of iron ore deposits Funds in Nigeria. 30.48 million tones are fund in agbaja in Plateau State, 182.5 million tones in Okene in Kogi State and 45.72 million tones in Enugu State. It is used for making steel, transformer and motor cars. Iron Ore is being mined at Itakpe in Kogi State and is already being beneficiated, up to 67 per cent of iron. The Aladja and Ajaokuta Steel complexes are already producing billets and other iron products for down-stream industries.
Lead/Zinc: An estimated 10 million tones of lead/zinc veins are spread over eight states of Nigeria. Proven reserves in three prospects in the east-central area are 5 million tones. Joint venture partners are encouraged to develop and exploit the various lead/zinc deposits all over the country.
Bentonite and Baryte: These are the main constituents of the mud use in the drilling of all types of oil wells. The Nigeria barite has specific gravity of about 4.3. Over 7.5 million tones of barite have been identified in Taraba and Bauchi States. Additional 41,000 and 70,000 tones of which are found Benue and Plateau States respectively, are used as inert volume and weight filler in drilling mud, rubber, glass, paper, etc. or as extender in the plant industry, and as chemicals in the manufacture of glass, heavy printing paper and plastics. Large bentonite reserves of 700 million tones are available in many states of the federation ready for massive development and exploitation.
Gold: There are proven reserves of both alluvial and primary gold in the schist belt of Nigeria, located in the Southwestern part of the country. The deposits are mainly alluvial and are currently being exploited on a small scale. Private investors are invited to stake concessions on these primary deposits.
Bitumen: The occurance of bitumen deposits in Nigeria is indicated at about 42 billion tones; almost twice the amount of existing reserves of crude petroleum. Analytical results indicate that this potential resource can be used directly as an asphalt binder. Most bitumen used for road construction in Nigeria is currently imported.
Coal: Nigeria coal is one of the most bituminous in the world, owing to its low sulphur and ash content and therefore, the most environment-friendly. There are about 3 billion tones of indicated reserves in 17 identified coalfields and over 600 million tones of proven reserves. About 82.2 million tones are found in Enugu state, 189 million tones in Benue state and 32 million tones in Plateau states. It is used as fuel and in industrial production of tar, gas and non-edible oil. Nigeria coal is one of the best quality coal deposits in the world with the lowest sulphur content.
Rock Salt: The national annual demand in Nigeria for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals by en-users, including tanneries and those in food and beverages, paper and pulp, bottling and oil companies. There are salt springs at Awe (Plateau State), Abakaliki and Uburu (Ebonyi State), while rock salt is available in Benue State. A total reserve of 1.5 million tones has been discovered, and government is now carrying out further investigations.
Gemstones: Gemstones mining has boomed in various parts of Plateau, Kaduna and Bauchi states for years. Some of these gemstones include sapphire, ruby, aquamarine, emerald, tourmaline, and topaz, garnet, amethyst, zircon, the fluorspar, which are among the world’s best. Good prospects exist in this area for viable investments.
Diatomite: 200,000 tones of which are found in Borno State are used in making insect control powder, bond for furnace brick walls and mineral fillers and filters.
Ugnite: 71 million tones of which are found in Delta State; is used in the industrial production of tar, gas, oils and (nitrate) fertilizer.
Columbite: 14,223 tones of which are found in Plateau State are used informing alloys that are useful in nuclear, aerospace and gas turbine engineering.
Tin: 10,546 tones of which are found in Plateau State is employed in plating, production of tin oxide used in paint, paper and ink industries, production of tin oxide resistors and electric lead wires.
Kaolin: An estimated reserve of 3 billion tones of good kaolinitic clay has been identified in many localities in Nigeria Investors are invited to exploit these for export.
The Nigerian government is doing everything possible to build and sustain a private sector-led mining industry. The Ministry of Solid Minerals has worked out a package of attractive incentives for potential investors in the solid minerals sector. These include:
1. 3 to 5 years tax holiday;
2. Deferred royalty payments, depending on the magnitude of the investment and the strategic nature of the project.
3. Possible capitalization of expenditure on exploration and surveys;
4. Extension of infrastructure such as roads and electricity to mining sites; and
5. The provision of 100% foreign ownership of mining companies or concerns.
Export Processing Zones
In 1991, the Nigeria Export Processing Zone Decree was enacted by the Federal Government of Nigeria which enabled the formation of the Nigeria Export Zone Authority (NEPZA) and the establishment of the first EPZ at Calabar, Cross River States. Export processing Zones (EPZ) by definition are special industrial export enclaves created to promote export-oriented manufacturing activities. Companies operating in such zones are readily available raw materials, as well as freedom to repatriate profits.
The above description is not exhaustive but is provides a basic framework for understanding the Nigeria business environment. It is hoped that the on-going privatization of public enterprises, when completed, will help improve business infrastructure in the country and ultimately reduce the cost of doing business in Nigeria.
CHAPTER 3
PREPARING TO EXPORT
As in every field of commerce, what makes business in import/export trade succeed is preparation. There is need to develop an export plan, which sets a target that you can work to, and to provide a guideline for everyone in the organization. Such a plan will include how you will organize your export/import business; select the products you want to deal in, an identification of export market segment and a blueprint for competing with competitors in target export markets. In formulating such a plan, import/export regulations and other trade barriers should be considered since they have significant impact on the outcome of the export transactions.
A business plan allows the promoter to consider objectively those elements that contribute to a successful venture. As a planning tool, it indicates goals, strategies, and objectives in a systemic manner. Such a plan guides operations and provides the yardstick for measuring performance during project implementation. A good export plan should articulate the role exporting will play in the company’s growth, the scope and nature of product lines, identified market size abroad, distribution channel, export pricing, promotional methods, sales targets and budgets, commissions on sales (especially when selling through overseas agents), and should lead to action conclusions and activity schedules. A well prepared business plan supported by financial projections is necessary, especially when external funding is required for the business.
In international trade: “It is far cheaper to think a mistake than to make a mistake”. When you think a mistake, what you lose is at most, your time. But when you make a mistake, you not only waste valuable time and effort but, also the materials and money involved. What this means is that, before you make any large financial commitment, it is important to think through the entire process first, to be sure you understand what this business involves, what needs to be done, and to develop a plan of action based on the insight. In international trade, any mistake can have devastating financial consequences. Therefore, it is necessary that the prospective exporter do some background research first, to develop a ‘proof positive’ business plan to ensure success. It is better to spend some time at your desk drawing up your plans, preparing, thinking things through and then implementing them, than getting started the moment the first idea occurs to you.
Organizing Your Export Office
The first step is to set-up an export and shipping office. Export must be regarded as the major part of your company’s overall commercial operation since the main objective of export is to gain business from overseas and earn foreign exchange. The management of a large export company will often be divided into domestic and overseas divisions. Internal specialists will handle transportation, insurance and finance. A smaller export company might use external specialists and “outsource” advice and assistance as the need arises. The following are the various organizational structures that the export office may assume:
Horizontal structure is most commonly used. The company is established to cater for all aspect of export work. Usually, it is founded upon a product or geographical basis. An export manager should be in charge of operations, with key staff responsible for personnel, research and statistics, promotion, sales and dispatch. As the business grows, departments or sections may develop and the senior executives will have managers and staff below them.
In a horizontal structure, the export-marketing manager would be in charge of departments that would in turn deal with all aspects for one market. One department might look after European market, another would deal with the USA and Canada, and still another would control Africa and another, the Middle East and so on. This form of structure tends to produce total involvement from all staff since they are likely to be managing several functions. The job is, therefore, more interesting.
Vertical Structure- Here, there would be a specialist for specific functions. Financial experts will handle financial matters. However, this may create limitations and boredom and make the staff disinterested – they may not see the business as a whole. Furthermore, this system lacks any degree of reliability since there is a limited liability to cover for sickness and holidays.
In a vertical structure organization, individuals would deal with specific functions that relates to all markets. Credit control, insurance, transport, production and parking, order processing, invoicing, documentation, filing and finance will be handled as specific areas, but covering all market.
A Multi-National Structure – This applies to large companies
operating on a worldwide scale. There are three main types of these:
An export-based organization: this relates to the structure of a major
company that has decided that its overseas operations should be
managed by one export operations office;
A product-based organization: This applies when the organization is product oriented and may be selling many diverse ranges such as agricultural commodities as well as manufactured products. Each division will have a self-contained aspect both at home and abroad.
An area-based organization: This is where a company might
organize itself on a geographical basis, especially if the
company is large and offer many products in the same area. The world
might be divided into zones such as Europe, America and Asia. As
conditions vary, the company makes the best use of local people in the
country who understand local conditions.
There are no fixed rules here or any one ideal structure to suite everyone. When setting up your company structure, consider the size, number of employees, plans for future development and expansion; consider also the type of product; is it a high volume product or one that requires efficient after sales service or both? Does the staff have worldwide experience or is it limited to one specific area? Are the links with banks, insurance and freight companies good and sound?
Export Office Personnel
Clearly, the staff employed in an export office or department must be reliable and competent, as in any business. Some staff functions of particular importance are as follows:
Custom Liaison – Here, staff are required to handle enquiries,
quotations, orders and possibly, complaints. Staff must ensure that
orders are processed without delay;
Transport – The staff concerned should arrange for the smooth
carriage of goods to the overseas markets. Here, negotiations will be
with agents or directly with the airlines and shipping companies; and
Insurance – This is an extremely important aspect of export and since
all cargo must be insured, staff must ensure that it is done.
Other staff functions include production, research, development, documentation and record keeping. All are vital to the success of the business.
Qualities Of Export Office Personnel
Anyone who works in an export office ought to have an aptitude for languages, an interest in world affairs, and a sense of responsibility, diplomacy, and the ability to work with people of any color, religion, race or nationality.
Handling of Enquiries, Quotations and Orders
Enquiries: All enquiries must e dealt with immediately (or within 24
hours), and should be answered in the same way that they were
received, for example, by fax, e-mail, telephone or letter. If for some
reason they cannot be acknowledged immediately, then the customer
must be advised of the delay.
Quotations: All quotations should be sent out as soon as possible (or
not later than 48 hours) and a clear record kept of the details. It is advisable to state the duration of which the quotation is open for acceptance. Much will depend upon the nature of the trade and the goods involved. However, custom and practice suggest that one or two months are often a suitable period, for example, you can state: “this quotation is valid for two months from the date of issue”.
Orders: All orders should be processed upon receipt (immediately). Terms and delivery date must be agreed on.
Record Keeping
There are different record keeping systems, but the following are commonly used:
Export sales records – These should show export revenue and
earnings, including budgets and forecasts for each coming year;
Customer dispatch cards, computerized files – Each card file should
give details of each customer’s transaction, such as method of payment, the port to which shipment is to be made, financial arrangements and insurance details and so on. The card files should form an important part of your record system; and
Customer flow charts – This should show each order, the date received, the date processed and the data of dispatch.
Remember, in dealing with your customers, you must be aware that there are three ways in which goods for export are subject to licensing procedures worldwide:
1) Exports to some countries are, in certain cases, restricted.
2) Some products may only be exported under license from the
government (yours or that of the importer’s country). Included here
are certain chemicals, military equipment and atomic energy
material.
3) Certain goods must not be exported at all from certain nations or to
certain nations. Some countries have prohibited lists that may restrict
movement of such things as weapons, drugs, and antiques among
others. In Nigeria, for example, prohibited items from export are:
i) Raw hides and skins;
ii) Timber in its raw form (excluding furniture and furniture components);
iii) Scrap metals;
iv) Unprocessed rubber latex and rubber lumps;
v) Maize and beans;
vi) Artifacts and antiques.
A list of prohibited is available from the Nigerian Export Promotion Council (NEPC) or the Customs and Excise Department of the Nigerian Customs Service.
It is most important that your company staff know their jobs and roles well. Training is vital (on a continuing basis). Staff should be well chosen for the jobs. If necessary, you can get professional consultants to recruit your staff for you. The export department should have good links with banks, insurance companies, freight companies and external expertise.
List of Exportable Products and Services in Nigeria
Following is the list of available export products in Nigeria you can trade in:
AGRICULTURAL PRODUCTS
1. Cashew nuts. 11. Ground Nut,
2. Cassava products 12. Gum Arabic
- Garri, Starch, Cassavita (fufu) 13. Fish and Shrimps
3. Copra (Dry Split Coconut), & Shells 14. Kolanut
4. Cotton (Yarns, Threads) 15. Fresh Fruits
5. Cocoa Products: Cocoa Beans, - Pineapples, Pawpaw,
- Beverages, Cocoa Powder, - Mangoes, Oranges, etc.
- Cocoa butter, Cocoa Cake 16. Coffee & Tea
6. Chili Pepper & Tiger Nuts 17. Cow Pea (Beans)
7. Soya Bean, Oil & Cake 18. African Red Hot Pepper
8. Garden Egg 19. Melon (Egusi)
9. Ginger, Sesame Seed 20. Water Melon
10. Grains 21. Vegetables & Herbs
22. Tubers (Yam)
23. Piassava
24. Plantain
25. Onions, Onion Powder
- Dehydrated Onion
- Fresh Onion
26. Sheanuts, & Timber Prod.
27. Animal Feeds
28. Animal Horns & Bones
29. Animal Pets
30. Rubber Products
- Tubes & Tires,
- Foot mats, Footwear
PROCESSED PRODUCTS
31. Palm wine, Kolanut Wine 38. Plantain Flour
32. Finished Petroleum Products 39. Bottled & Canned palm Oil
33. Tomato Juice, Orange Juice 40. Processed Wood & Wood Products
34. Mango Juice, Pineapple Juice 41. African Print Designs
35. Waste Paper (For News print) - batik, Hand-woven Aso Oke, Adire
36. Scrap Metals & plastics - Akwaete, Brocade, Nigerian Wax, etc
37. Yam Flour (Amala, Iyan & Lafun) 42. Palm kernel, Shells, oil & cake
MANUFACTURED GOODS
43. Natural Spring Water 53. Carpets & Rugs
44. Various Cosmetics & Perfumes 54. Candles & Matches
45. Soaps and Detergents 55. Office Products
46. Automobile parts, - Papers, Glue & Gum
- Oil & Air Filters 56. Textiles, Yarns & Fabric,
47. Beer (lager), Malt Drink & Stout - Towels
48. Various Petroleum Products 57. Burnt Bricks & Ceramic Products
49. Aluminium Products 58. Biscuits, Paints & Chemical products
50. Plastic Products 59. Nigerian Music & Publications,
51. Wooden & Plastic Furniture - Home Video & T.V. Programs
52. Fibre (Praying) Mats
MINERALS
60. Colombite 67. Iron and Steel
61. Coal & Charcoal 68. Kaolin & Gypsum
62. Copper 69. Limestone & Rock Salt
63. Crude Oil 70. Marble and Marble Chips
64. Direct Reduced Iron (DRI) 71. Silica
65. Graphite Powder/Electrodes 72. Tin Ore, & Talc
66. gemstones: Sapphire, ruby, aquamarine, 73. Zinc Ore & Lead Ore
- Emerald, tourmaline, topaz, garnet,
- Amethyst, zircon, fluorspar.
HANDICRAFT
74. Brass Works 81. Kernel Shell Carvings
75. Bronze Works (Pottery) 82. Leader Works
76. Calabash Carvings 83. Mosaic
77. Cane Works 84. Painting
78. Coconut Shell Carvings 85. Raffia Works
79. Copper Works (Glass & Coral Beads) 86. Rattan Furniture
80. Ivory Carvings 87. Various Wood Carvings
EXPORTABLE SERVICES
88. Tourism 94. Professional & consultancy services
89. Skilled Labor - Accountancy
90. Aviation - Legal Services
91. Bunkering - Banking Services
92. Stevedoring - Insurance Services
93. Warehousing - Import/Export Agency Services
- Management Services
- Engineering Services
- Advertising Services
- Shipping Services
- Veterinary Services
TV & Film Production Services
The above list is not exhaustive, but provides the general scope to guide you in selecting what to export. Always remember that there is no substitute to making your own research on the viability or otherwise of exporting any of the products in the above list. The best we can do is providing you with the most up-to-date actionable business opportunities information to enable you get started quickly and be successful. But, it’s up to you to exploit the opportunities.
Sources of Export Products in Nigeria
Sourcing quality products for export is perhaps, the most challenging aspects of the export process. Here, you have to get everything right, from quality finishing, pricing and packaging, to adapting the product to satisfy your overseas customer requirements. And you have to do this repeatedly, on a consistent basis, to remain competitive.
The customer in overseas market is not at all concerned about the trouble you go through in sourcing, packaging and shipping the products. Once payment terms have been agreed on, he expects timely delivery of excellent quality product. He is of course, right. After all, he will be parting with his hard-earned money for the goods, and should rightly expect satisfactory returns on his investment. As the exporter, the buyer is not just paying you for the goods alone, he is also paying for your service- your skill ability to source, pack and ship excellent quality products at reasonable prices and give prompt delivery to buyers worldwide.
CHAPTER 4
AGOA-BENEFITS AND OPPORTUNITIES
On May 18, 2000, the United State’s former president, Bill Clinton signed into law the historic Trade and Development Act, containing the Africa Growth and Opportunity Act (AGOA). The Act provides unprecedented opportunities and aims to:
· Promote increased trade and investment between the United States and sub-Saharan Africa countries by providing eligible African countries with unprecedented liberal access to the U.S. market. Essentially, all products of these eligible countries will have quota free / duty free access to the almost 10 trillion Dollar United States market.
· Promote economic development and reform in sub-Saharan Africa, moving across a wide range of industries, granting tangible benefits to entrepreneurs, farmers and families.
· Promote increased access and opportunities for U.S. investors and businesses in sub-Saharan Africa.
The AGOA Act 2000 authorizes a new U.S. trade and investment policy toward Africa. It provides increased trade and economics co-operation between the United States and eligible sub-saharan African countries. This legislation represents a concrete, meaningful and significant opportunity, which could result in billions of Dollars in new trade and investment flows between the U.S. and Africa.
Key Trade Benefits for Africa
The Acts:
- Institutionalizes a process for strengthening U.S. relations with African countries to achieve political and economic reforms and growth.
- Offer beneficiary sub-Saharan African countries duty-free and quota-free access to the U.S. market, for essentially all products through the Generalized System of Preferences (GSP) program;
- Provides additional securities of investors and traders in African countries by ensuring GPS benefits for eight years.
- Eliminates the GPS competitive need limitation for African countries.
- Establish a U.S.-sub-Saharan Africa Trade and Economic Co-operation Forum to facilitate regular trade and investment policy discussions;
- Promotes the use of technical assistance to strengthen economic reform and development, including assistance to strengthen relationship between U.S. companies and companies in sub-saharan Africa;
- Extend duty/quota free U.S. market access for sub-Saharan Africa apparel made from yarns and fabrics not available in the United States;
- Extends duty/quota free treatment for apparel made in Africa from U.S. yarn and fabric and for knit-to- shapes sweaters made in Africa from cashmere and some merino wools as well as apparel in Africa from silk, velvet, linen, and other fabrics not produced in commercial quantities in the United States;
- Extends duty-free and quota free U.S. market access for apparel made in Africa with African/regional fabric and yarn. Such imports, however, are subject to a cap (limit) ranging from 1.5 to 3.5% of the multi-billion Dollars U.S. apparel import market over an eight-year period. Africa apparel imports into the U.S market made with African fabric/yarns currently total about $250 million. You can still export into the U.S. even when the cap (limit) of 3.5% is reached. However, the normal duties would be levied for imports above the cap (limit); and
- Provides an average 17.5% duty advantage on apparel imports in the U.S. market and promotes economic development and diversification in Africa’s poorest countries through a special provision in the Act which allows Africa countries with an annual Gross National Product (GNP) of under $1,500 (less developed beneficiary countries) to use third country fabrics input for four years. This special investment incentives for the poorest countries is aimed at providing a market stimulus to economic development for areas with fewer existing industries.
The AGOA offers a wide variety of benefits to export businesses, workers, manufacturers and farmers in eligible African countries. It is important to remember that the Act is a trade policy and can only offer opportunities! African governments , corporate and individual citizens must take action to seize the opportunities provided in the act and to create enabling environments to encourage expanded trade and investments.
AGOA can change the course of trade relations between Africa and the United States for the long term, while helping millions of African families to find opportunities to build prosperity.
List Of AGOA Beneficiary Countries
The U.S. government intends that the largest possible numbers of Sub-Saharan African countries are able to take advantage of AGOA. Former president Clinton issued a proclamation on October 2, 2000 designating 34 countries in Sub-Saharan African as eligible for the trade benefit of AGOA. On January 18, 2001, Swaziland was designated as the 35th AGOA eligible country. The U.S. government will work with eligible countries to sustain their efforts to institute policy reforms as well as with the remaining 13 Sub-Saharan African countries to help them achieve eligibility.
The eligibility criteria for GSP and AGOA substantially overlap and countries must be GSP eligible in order to receive AGOA’s trade benefits, including both expanded GSP and the apparel provisions. Although GSP eligibility does not imply AGOA eligibility, 45 of the 48 Sub-Saharan African countries are currently GSP eligible.
On December 31, 2001, the U.S. president, Bush approved the designation of 35 Sub-Saharan African countries as eligible for tariff preferences under the Africa Growth and Opportunity Act (AGOA). The list of eligible countries is provided below:
Republic of Benin;
Republic of Botswana;
Republic of Cameroon;
Republic of Cape Verde;
Central African Republic;
Republic of Chad;
Republic of Congo;
Republic of Djibouti;
State of Eritrea;
Ethiopia;
Republic of Gabon;
Republic of Ghana;
Republic of Guinea;
Republic of Guinea-Bissau;
Republic of Kenya;
Kingdom of Lesotho;
Republic of Madagascar;
Republic of Malawi;
Republic of Mali;
Islamic Republic of Mauritania;
Republic of Mauritius;
Republic of Mozambique;
Republic of Namibia;
Republic of Niger;
Federal Republic of Nigeria;
Republic of Rwanda;
Democratic Republic of Sao Tome and Principe;
Republic of Senegal;
Republic of Seychelles;
Republic of Sierra Leone;
Republic of South Africa;
Swaziland;
United Republic of Tanzania;
Republic of Uganda; and
Republic of Zambia.
The 2002 list of eligible countries now include Cote d’Ivoire, making it the 36th beneficiary country under AGOA.
GSP Product Eligibility
AGOA empowers the U.S. president to approve duty-free treatment under GSP for any article, after the U.S. Trade Representative (USTR) and the U.S. International Trade Commission (USITC) have determined that the article in question is not import sensitive when imported from African countries. On December 21, 2000, the U.S. President extended duty-free treatment under GSP to AGOA eligible countries for more than 1,800 tariff line items in addition to the standard GSP list of approximately 4,600 items available to non-AGOA GSP beneficiary countries. The additional GSP line items include such previously excluded items as footwear, luggage, handbags, watches, and flatware.
AGOA extends GSP benefits for eligible Sub-Saharan African beneficiaries until September 30, 2008, seven years longer than in the rest of the world! Sub-Saharan African beneficiary countries are also exempted from competitive need limitations, which cap (limit) the GSP benefits available to beneficiaries in other regions.
Apparel Provisions: The Act provides for duty-free and quota-free access to the U.S. market without limits for apparel made in eligible Sub-Saharan African countries from U.S. fabric, yarn, and thread. It also provide for substantial growth of duty free and quota free apparel imports made from fabrics produced in beneficiary countries in sub-Saharan African. Apparel imports made with regional (Africa) fabric and yarn are subject to a cap (limit) of 1.5% of overall U.S. apparel imports, growing to 3.5% of overall imports over an eight year period.
Less Developed Beneficiary Countries
Under a Special Rule for Less Developed Beneficiary Countries (LDBC), those with a per capita Gross National Product (GNP) under $1,500 will enjoy duty-free access for apparel made from fabric originating anywhere in the world until September 30, 2004. Apparel imported under the special Rule is counted against the cap (limit). The cap (limit) is measured in square meter equivalents and has no dollar equivalent. However, the cap, which came into effect from October 1, 2000, allows AGOA eligible countries to ship nearly twice the volume of apparel to the United States than they shipped before.
Preferential treatment for apparel took effect from October 1, 2000, but beneficiary countries must first establish effective visa systems to prevent illegal trans-shipment and use of counterfeit documentation. And they must institute required enforcement and verification procedures. Specific requirements of the visa systems and verification procedures were communicated to African governments via U.S. embassies on September 21, 2000. The Secretary of Commerce is directed to monitor apparel imports on a monthly basis to guard against “surges”. If increased imports are causing or threatening serious damage to the U.S. apparel industry, the President is to suspend duty-free treatment for the article(s) in question. The U.S. government is now reviewing applications for approval of the required visa and enforcement mechanism from AGOA eligible countries.
The Act directs the President to organize a U.S. Sub-Saharan Africa Trade and Economic Forum, to be hosted by the Secretaries of State, Commerce, Treasury, and the U.S. Trade Representative. The Forum is to serve as the vehicle for regular dialogue between the United States and African countries on issues of economics, trade, and investment. The Secretary of Commerce is directed to ensure that at least 20 fulltime Commercial Service employees are assigned in at least ten different Sub-Saharan African countries, subject to the availability of appropriations. The Act also calls for annual reports to Congress up to the year 2008 on U.S. trade and investment policy in Africa and implementation of the Act.
Frequently Asked Questions, & Answers about AGOA:
What is an “eligible sub-Saharan African (SSA) country?
The eligibility requirements contained in the Africa Growth and Opportunity Act (AGOA) were developed in consultation with African countries. The criteria reflect an understanding that the trade benefits and market access accorded in the Act will only generate sustainable economic growth and development if countries have appropriate domestic policies. The criteria constitute “best practice” policies that will ultimately attract trade and investments and foster widely shared prosperity. They include; establishment of market-based economies; development of political pluralism and the rule of law; elimination of barriers to U.S. trade and investment; protection of intellectual property; efforts to combat corruption; policies to reduce poverty and increase availability of health care and educational opportunities; protection of human and workers’ rights, and elimination of child labor. So, an eligible Sub-Saharan African country is the country that is committed to implementing these policies. The phrases “eligible Sub-Saharan African country” and “beneficiary sub-Saharan African country” are used interchangeably in this book.
What Products Are Eligible For Duty Free Treatment?
Essentially, all products will be eligible as long as they meet AGOA’s rule of origin requirements and are imported directly from a beneficiary Sub-Saharan African country. Exceptions include fabrics and yarns not imported as part of a finished apparel product, and products determined by the U.S. Government to be import sensitive. A complete listing of products currently eligible for duty free treatment under AGOA is provided at Appendix 8. You would find in the list that there are over 1,800 products that you can now export duty free into the U.S. market.
How do I tell if the products I want are eligible for duty free access to the U.S. market?
There are three basic means by which a product may have duty free access to the U.S. market. For many products, the U.S. has already set the tariff at zero for all countries’ export of that product. In addition, many products are already eligible for duty free treatment under the U.S. Generalized System of Preferences (GSP) program. Under the Africa Growth and Opportunity Act, many more products have become eligible for duty free access to the U.S. providing duty free and quota free U.S. market access for essentially all products from eligible sub-Saharan African countries. These are: (i) through the AGOA; and (ii) through the expanded GSP.
The first step in determining the United States’ tariff rate for any product is to determine what the U.S. Harmonized Tariff Schedule (HTS) number is for that product. To make it easy for you, we have also included the HTS.
number for each product in the alphabetized list of eligible products for duty free treatment under AGOA. It is important to note that if a product is not listed as eligible for duty free treatment GSP or under AGOA it may be because the tariff is already zero for all countries. In order to receive duty free market access for a product under the GSP program or under AGOA, the product must be produced or manufactured in a GSP or AGOA beneficiary country and must meet the GSP or AGOA rules of origin requirement.
What are the main benefits available to exporters from eligible sub-Saharan African countries?
First, zero duties apply to U.S. imports of eligible products from eligible countries in sub-Saharan African. “Eligible Products” are those currently receiving duty free treatment under the GSP program, plus an expanded list of products under (AGOA).
Second, a guarantee of GSP benefits for eligible sub-Saharan African countries through to September 30, 2008. The original GSP program benefits officially expired for other countries and regions on September 30, 2001, and must be reviewed by the U.S. Congress if duty free benefits are to resume. (AGOA) extended the GSP benefits for another seven years to beneficiary countries in sub-Saharan African). In addition, GSP program’s “competitive needs” limitation, which prohibits the importation of GSP- eligible products above a certain level, is now waived for eligible sub-Saharan African countries under the AGOA.
Third, duty free treatment for imports of sub-Saharan African apparel, some of which may be made with sub-Saharan African textiles and yam. These benefits will give exporters in eligible sub-Saharan African countries a decided advantage in exporting apparel to the United States, while all other suppliers of apparel from other countries and regions with which the U.S. does not have free trade agreements will continue to be assessed on the regular tariff duties, which average 17.5% of the value of the appeal product. However, apparel products made with sub-Saharan African fabrics or yarns or third country fabrics or yarns may lose duty free benefits if the U.S. Secretary of Commerce determines that imports into U.S. of those products are “surging”, that is, being imported in such increase quantity as to case the U.S industry producing the same or similar products serious damage or threat thereof.
Fourth, establishment of the U.S. sub-Saharan African Trade and Economics Co-operation Forum which institutionalizes a Presidential and Cabinet-Level dialogue between the U.S and the countries of sub-Saharan Africa.
Fifth, expanded support from the Overseas Private Investment Corporation and U.S. Export-Import Bank that will increase the interest of American exporters, Importers and investors in undertaking projects in sub-Saharan African.
Can a country lose AGOA benefits?
The U.S President must conduct an annual review of each sub-Saharan African country’s progress towards meeting the AGOA eligibility criteria. The President must terminate the designation of any beneficiary sub-Saharan African country if he determines that the country is not making continual progress towards meeting the eligibility criteria. The vast majority of African nations, which are striving to achieve the objectives, although none is expected to have fully implemented the entire list of requirements, have embraced these criteria overwhelmingly. Thus, the answer is yes, country can lose eligibility and AGOA benefits.
What specific requirements must be met to export merchandise under AGOA?
The exported merchandise must be eligible for AGOA benefits. That is, they must be produced in a designated beneficiary Sub-Saharan African country. They must meet the value-added requirements for non-textile/apparel products and the various specific requirements for different apparel products. They must be exported directly into the United States from a beneficiary sub-Saharan African country and must be accompanied by export documentation that claims AGOA benefits on the appropriate shipping documents.
What are rules origin requirements for qualifying AGOA “apparel” product?
The rules vary with individual products. The U.S Customs Services has issued interim Custom Regulations on the African Growth and Opportunity Act. In general, apparel qualifying for duty-ree benefits may be made with U.S. fabric and yarn of sub-Saharan African fabric and yarn (subject to qualitative limit) or, in the case of the Least Development Countries of sub-Saharan Africa, third-country fabric (subject to quantitative limit) may be used. Certain third country fabric and yarns may also be used by sub-Saharan African apparel producers, provided such fabrics are no a short supply list- maintained by the U.S Department of Commerce. Third country yarn and fabric may also be used to produce cashmere or certain wool knitted-to-shape sweaters.
What are the rules of origin requirements for other products?
The export item must be the growth, product, or manufacture of a beneficiary developing country and the sum of:
a. The cost or value of materials produced in one or more beneficiary countries plus;
b. The direct cost of processing performed in those countries, which may not be less than 35% of the appraised value of the product when it enters the United States.
Up to 15 percentage points of the 35 percent may be derived from U.S parts or materials used to produce the product in a beneficiary sub-Saharan African country or countries, for products designed for GSP and AGOA benefits. Questions regarding the rule of origin requirements for specific products and/or classification of products may be directed to U.S. Customs Services by writing to: To Director, National Commodity Specialist Division, U.S. Custom Services, 6 World Trade Center, New York, New York 10048, U.S.A.
What is meant by the requirement that the article be “exported directly:”
This means that the article must be shipped directly from the beneficiary country to the United States without passing through the territory of another country. Or, if shipped through the territory of any other country, the merchandise must not have entered the commerce of that country whole en route to the United States. In all cases, the invoice, bills of lading and other documents connected with the shipment must show that the United States is the final destination of the exported article.
How can the correct HTSUS classification of a product be determined?
The correct HTSUS classification for all the AGOA eligible products is already contained in the complete list of approved products at the end of this chapter. Questions about a specific product’s Harmonized Tariff System of the United States (HTSUS) number should be referred to the U.S. Customs, including information on products classification and rules of origin is available at: www.customs.gov
Who makes the determinations regarding AGOA products and country eligibility?
The apparel and textile benefits provided under AGOA are generally specified in the Africa Growth and Opportunity Act. The GSP Sub-committee of the Trade Policy Staff Committee, chaired by the Office of the United States Trade Representative, reviews non-apparel/textile product coverage. All U.S. Executive Branch Agencies directly involved in trade participate in the inter-agency review of GSP eligibility modifications, including expansion of GSP product coverage for eligible sub-Saharan African countries through AGOA. The U.S. Customs Services determines the classification of products and whether or not they meet the requirement specified in the Act. Country eligibility decisions are made through an inter-agency process involving all relevant U.S. Executive Branch Agencies and chaired by the Office of the United States Trade Representative. Recommendation on product coverage and country eligibility are submitted to the U.S. President whose final decisions are printed in the Federal Register.
How can an exporter in AGOA beneficiary country know the value at which the U.S. Customs authorities will appraise an article?
In most cases, the U.S. Customs will appraise the merchandise at the transaction value, that is, the price actually paid or payable for the merchandise when sold for export to the United States. This value will include the following elements:
1. The Packing cost incurred by the buyer;
2. The selling commission incurred by the buyer;
3. The value of any assistance provided to the producer, free of charge by the buyer;
4. The royalty or license fee that the buyer is required to pay as a condition of the sale; and
5. The proceeds accruing to the seller from any subsequent resale, disposal, or use of the imported merchandise.
In general, shipping and other costs related to transporting the articles from the port of export to the United States are not included in the calculations.
v Actual labor costs involved in producing the goods, fringe benefits, and on-the-job training costs;
v Engineering, supervisory, quality control, and similar personnel costs;
v Dies, molds, and tooling costs, as well as depreciation on machinery and equipment; and
v Research, development, design, blueprint, inspection and testing costs.
The costs that are not included in the direct costs of processing are those not directly attributable to the merchandise being considered or are not costs of manufacturing. These costs include profits, general expenses and business overhead, such as administrative salaries, casualty and liability insurance, advertising, and sales representative commissions.
What is an “effective visa system” related to apparel/textile shipments?
An effective visa system applicable to textile/apparel products that claim benefits under AGOA is a government industry process which demonstrates that the goods for which benefits are claimed were in fact produced in Sub-Saharan African country or countries according to the rules of origin required to claim those benefits. The U.S Government has provided beneficiary countries with guidelines on what it believes are required for an effective visa system. This includes the requirement that an original visa stamp on an original invoice covers each shipment. The visa must contain certain information such as the date of the visa, the quantity of goods being shipped, the preference grouping the goods qualify under, and a country code. In addition, the beneficiary country’s government must agree to co-operate with the U.S Customs Services to prevent unlawful trans-shipment and use of counterfeit documentation. They must also agree to permit verification visits to factories, producers, exporters, and/or manufacturers. Governments of beneficiary countries must also require that factories, producers, exporters, and/or manufacturers keep proper records relating to the production of goods for a period of five years.
What are the apparel/textile preference groupings?
The following are general descriptions of the preference groups:
A. Apparel assembled from U.S formed and cut fabric from |U.S. yarn;
B. Apparel assembled and further processed from U.S formed and cut fabric from U.S yarn;
C. Apparel cut and assembled from U.S fabric from U.S. yarn thread;
D. Apparel assembled from regional fabric from yarn originating in the U.S or from one or more beneficiary countries;
E. Apparel assembled in one or more less developed beneficiary countries;
F. Sweaters knit to shape in chief weight of cashmere;
G. Sweaters knit to shape with 50 percent or more by weight of fine wool;
H. Apparel cut and assembled in one or more beneficiary countries from fabric or yarn not formed in the U.S. or a beneficiary country or designated as not available in commercial quantities in the U.S.; and
I. Handloom, handmade or folklore articles.
Articles under preference group “1” must be determined through bilateral consultations between the United States and sub-Saharan African countries.
Do the apparel products that are eligible for duty-free and quota-fee benefits under the AGOA have to satisfy the 35% value-added requirement of the GSP program?.
Apparel products eligible for benefits under the AGOA must meet the preference groupings set out in the AGOA apparel provisions. These requirements do not include the 35% value-added requirement. The 35% value-content applies to those products currently eligible for GSP treatment (which do not include most textile and apparel products) as well as additional products that may be designated as eligible for duty-free treatment under the expansion of the GSP program for AGOA beneficiary countries. The question must, therefore, be answered in the negative.
How will apparel exports from sub-Saharan Africa be counted against the cap limit on imports of apparel made with regional or third-country fabric?.
There is no quantity limit for individual beneficiary country. This means that eligible imports from any eligible country will be counted against the cap limit as they are imported on a “First come, First Served” basis. Once the cap limit is filled, product may still be imported. However, the prevailing normal relations tariff rate will be assessed. For the first year, two-thirds of the cap was made available on October 2,2000. The remaining one-third of the cap, plus, any quantity remaining unfilled from the earlier two-thirds of the cap, was made available on January 1, 2001. The yearly cap period begins on October 1 of each year and runs to September 30 of the next year.
What is trans-shipment?
AGOA describes trans-shipment as a claim for a textile or apparel article for duty-free benefits that is false with respect to the country of origin, manufacture, processing or assembly of the article or any of its parts. If trans-shipment is found, the United States will deny all benefits for future textile or apparel shipments from the trans-shipping sub-Saharan African exporter for five years.
What types of records must be kept for apparel/textiles, and by whom?
Exporters, producers, or manufacturers are required to keep proper records relating to the production of goods the world. In the year 2000 alone, Americans spent more than US$ 1.4 trillion dollars importing goods and services from all over the world and exporting more than US$ 1.065 trillion dollars in goods and services to the rest of the world.
Available statistics from the United States International Trade Commission shows that Africa’s exports to the U.S under the GSP and AGOA increased from about $682 million to $8.166 billion in 2001. Out of this noticeable increase, about $7.579 billion represents U.S imports from sub-Saharan Africa under AGOA.
In the year 2000, South Africa exported goods worth about $583.176 million to the U.S.; a year later that amount rose to about $923.234 million. Malawi exported $23,218 in 2000 and a year later, that total increased to about $35.362 million. Swaziland finished 2000
exports to the U.S. with $11.957 million, and realized about $14.77 million in sales a year later. Nigeria’s year 2000 export to the U.S. was $71,000 under AGOA and GSP, and this amount increased substantially to $5.68 billion in 2001.
By sectors, the about $8.166 billion exports to the U.S under AGOA in 2001 represents about $6.827 billion in energy related products, about $359.3 million in textiles and apparel, $319.1 million in solid minerals and metal exports, $300.5 million in transportation equipment, $140.9 million in agricultural products and $128 million in chemical and related products.
The above information and statistics shows that AGOA is increasing trade between the nations of Africa and the United States and needs to be supported on both sides of the continent to make these gains sustainable; for example, Africa is the world’s continent with the largest amount of natural resources. However, this has not translated into any meaningful advantage, as nations of equivalent size with Africa nations have been able to outsell Africa producers in the American market due to better marketing techniques, packaging, advertising shipping or other capabilities.
At the point, it may be necessary to examine comparisons of the total volume of U.S two-way trade for 2001 (imports and exports) between four African countries and four countries size elsewhere in the world for comparative analyses.
Mali has a population of 10.4 million persons and had a total 2001 two-way trade with the United States of US$22.1 million, Belarus had a total two-way with the U.S of US$55.6 million.
Senegal’s population is 10 million and had a total 2001 two-way with the United States of US$45 million. But the Czech Republic, albeit with a population slightly larger at 10.2 million had total 2001 two-way trade with the U.S of US$809.8 million.
Ghana, with a population of 18.9 million had a total 2001 two-way trade with the United States of US$174.6 million. Syria which has a slightly lower population of 17.2 million still had a total 2001 two-way trade with the U.S of US$151.5 million.
Nigeria has a official population of 113.8 million and a total 2001 two-way trade with the United States of US$4.8 billion. Yet Mexico with a lower population of 100.3 million had a total 2001 two-way trade with the U.S of US$98.5 billion.
When you examine the trade figures more closely, you will find that all, except one of the African countries just cited exported less to the United States than they imported from the United States. Senegal sold $33.6 million less, Mali sold $17.1 million less and Ghana sold $4 million less. Only Nigeria sold about $4 billion more, which represents mostly oil sales.
In contrast however, all of the non-African countries in our comparison exported more to the U.S than they AGOA is a trade instrument with tariff preferential initiated by the United States Government aimed at assisting Sub-Saharan Africa's economic development by promoting trade and investment between the US and the Sub-Saharan Africa (SSAN) countries. The AGOA Act was signed into law by President Bill Clinton on May 18, 2004. The Act provides trade preference for quota and duty-free entry of 6.500 different goods into US. The act originally covered the 8years period from October 2000 to September 2008. But Bush in July, 2004 further extended AGOA to 2015. In the textile and apparel category, Nigeria was the first country to be granted the Category 9 Certification by the United States government. This allows Nigeria to export Africa prints and other made-in-Nigeria fabrics to the United States of America.
She say "non oil export constitutes a very small portion of Nigeria's AGOA export. And one of my goals, and that of my team in the US mission in Nigeria, is to change this scenario particularly as have worked on AGOA for many years including the signing of AGOA into law at the White House in 2000. The AGOA Act recognizes the talents of the Nigerian small and Medium Scale Enterprises (SMEs) communities and it is very important to the United States Government that SMEs in Nigeria take increased advantages of the AGOA Trade opportunity.
However, this will not be a quick fix but rather than of many steps. The launch of the first shipment of Nigeria clothing apparel to the United States is a major step in changing the paradigm of business linkages that currently exists between the two countries. The shipment of Nigerian garment into the US underscores how this paradigm needs to change and has to change between the SMEs in Nigeria and American business" imported. For example, Mexico exported $ 11.3 billion more; the Czech Republic exported $ 173.6 million more. Belarus exported $26.6 million more and Syria exported $2.8 million more.
The U.S. Africa trade pattern has always been that the U.S. exports manufactured items, especially, machinery, to Africa countries and imported unprocessed materials such as crude oil, solid minerals, coffee, tea and other similar items. American exporters are yet to exploit the full benefit of selling consumer goods to African markets. And African exporters are yet to penetrate the American consumer market effectively.
When the global economy takes full shapes in a few years from now and World Trade Organization Rules come fully into force, trade barriers around the world will have to come down. Global trade competition will become very intense. Foreign consumer goods not now being sold may flood African markets and if African companies are not competitive, they will lose even their currently secure domestic markets. Now is the time for Africa Private sector operators to become more competitive while there are still preferential trade arrangements such as AGOA. Preparing to sell inn foreign markets is prudent in a global economy without borders and tariffs to stop the inflow of foreign goods.
U.S Import/Export Trade Statistics with Sub-Saharan Africa
Two-way trade between the United States and sub-Saharan African declined slightly in 2001 as plummeting crude oil prices held down U.S. imports, offsetting strong growth in U.S. exports. Total trade was $28.3 billion, down 3.9% from the 200 level when skyrocketing oil prices boosted total trade by 50% to $29.4 billion.
U.S. exports to Africa grew by 17.5% in 2001 to nearly $7 billion, eclipsing the previous height reached in 1998. The surge was led by sales of aircraft, oil and gas field equipment and motor vehicles and parts. Aircraft sales doubled on the strength of shipments to South African, Kenya and Seychelles. Oil field drilling equipment from the U.S. sold well in Nigeria and Gabon, offsetting declines in Angola and Equatorial Guinea. South Africa and Namibia were strong markets for U.S motor vehicles and parts.
U.S import from Africa were $21.3 billion in 2001, down 9.3% from 2000. Falling crude oil prices caused the decline, but purchases of diamonds, platinum of motor vehicles from South Africa prevented a sharper plunge in imports.
Y.S. trade with the 36 countries covered by the AGOA closely paralleled the trend for sub-Saharan African countries as a whole. U.S. exporters were up 19% while imports were off 10%. Excluding crude oil, precious stones and metals, imports fro AGOA counties were up nearly 11%. Trade in automotive products grew rapidly in both directions and U.S apparel imports surged 28%. Complete import/export trade statistics between the United States and sub-Saharan Africa from 1999 to 2001 is provided in Appendix 7.
List of Exportable Products under AGOA- Over 1,800 Items
The complete list of over 1,800 products eligible for duty-free treatment under AGOA if exported from eligible sub-Saharan African countries into the United State of America is provided in Appendix 8. The products are arrange in alphabetical order by broad product groupings and, within those groupings, classified numerically according to the Harmonized Tariff System (HTS) of the United States. The tariff schedule which details all of the HTS codes applicable to all products imported into the United States may be accessed through the Internet at http:/www.usitc.gove/taffiairs.htm
Note: if there is an A+ under GSP Status, which means that the product is currently duty-free under GSP and AGOA for countries designated as less developed beneficiary countries. Additional sources of information on U.S trade and investment policy for Africa and AGOA implementation is also provided in Appendix 9.
CHAPTER FIVE
FINDING YOUR EXPORT MARKET
Export Marketing Strategy
Export Market Strategy is the selection of target export market and the determination of the right product, price promotion and the distribution strategies that are effective for achieving export objectives. Your fast track approach will be to try to export into the U.S market, since there is favourable preferential trade arrangement in place, such as AGOA. To be successful, however, you need to understand the U.S. market. In planning how to sell your goods, you must consider the desires of the anticipated customer. This must be on an on-going basis, and you must never become complacent in redesigning your products and services to meet customer requirements.
In marketing products in the United States, you must decide which segment of the market you want to target. There is the possibility of selling to the mass American market, but that requires huge inventory and consistency of production to maintain. For small producers without such advantages, a specialized market is the best means of entering the U.S market. This will require shaping or packaging the product to appeal to that market segment, and perhaps, packaging it differently to appeal to a different market segment.
African-Americans are a distinct segment within the American market. This group is, to some extent, a sure market for African products. They also have a great deal of disposable income and purchase consumer items. According to available U.S. Government statistics, African-Americans spend a total of $3,725 per person per year on food products of all kinds, $1,675 on apparel and related services, $1.069 on health care and $882 on entertainment.
U.S companies know that certain products and entertainment appeals more to African-Americans than Americans in general. Personal care products, for example, are routinely advertised on television programs, radio programs or publications aimed at that audience.
However, it would be a tremendous error to aim to market goods only to African-Americans. You market will only consist of potentially 12% of the U.S. market and there are some people in other ethnic groups more likely to buy your products than some African-Americans. For example, African apparel has a distinct appeal to African-American, but other people wear African shirts and dresses. Also, African clothes, especially with designs that are not particularly identified with Africa, are increasingly popular in the U.S. market for tablecloth, drapes, and similar uses. African cultural items, such as decorative arts and craft, have a special meaning for African-Americans, but other Americans also collect, especially, high-quality African art. Specialty foods, such as mixed spices, could be marketed to African-Americans or Hispanics, since both groups are consumers of spics for food preparation.
Export Product Planning
The most basic product planning decision is the choice of the types of product to produce for export. There are consumer products, which are goods and services, intended for personal, family and household use. Such products include convenience goods purchased with minimum effort because the consumer already knows what the product can do before shopping. Shopping goods are those for which consumers must seek information about alternatives before making a purchasing decision. Specialty goods are those to which consumers have a brand loyalty because of past satisfaction with a specific product.
The other types of product are industrial products, which are goods and services purchase for use in the production of other goods or services. Each of the three categories of industrial gods requires a different decision-making. For example, machinery installations and accessory equipment are capital items used in the production process but do not become part of the final product. Because of their expense, it involves a high degree of decision-making before purchases are made. Raw materials, component or fabricated parts are expenses rather than capital items. They are used in production and become part of the final product. Industrial supplies are convenience goods needed for the daily operation of a company, such as cleaning materials and office stationary. In addition to industrial products, there are industrial services, which include maintenance and repair and business advisory services (management consulting, accounting or advertising).
Most African products would fall in the shopping goods category. For example, mixed spices are used worldwide and can be targeted in the U.S. to African-American and Hispanics. However, a foreign market such as the U.s. may not know the specific mix of spices. Thus, it would take extra effort to sell such a product in competition with domestic or other foreign products with which consumers are already familiar. One possible solution would be to appoint a marketing company based in USA as your agent/representative and provide them with the products information, including samples to enable them do a good job of promoting and marketing the products in the U.S market. In return, you will need to agree on the rate of commissions to pay your agent/representative.
Export Product Branding and Packaging
Successful products in American market all have at least one thing in common: each has an identifiable brand for which consumers look. This brand consists of a name, design or symbol or combinations of both that identify the product. The brand name can be a word or group of words, such as Lipton Cup-A-Soup. It can be a brand mark, such as the Prudential Insurance rock. It can be a trade character, such as Morton Salt’s umbrella girl. It could be a trademark name followed by, such as MasterCard.
Looking at the U.S. market, we find new brand name products introduced into the market each year. For example, in 1997 alone, there were 3,793 new food items, 3,482 new health and beauty products 1,206 new beverages. More than two-thirds of these new brand name products were extensions of existing product lines. This trend is expected to continue. While increased choice has caused consumer loyalty to product brands to be less certain, brand your product creates an identity that gives you an edge in competing with other products, by making it easier for consumers to select your goods in the marketplace initially and to make the same selection again and again. Packaging must reinforce this brand, which are the items’ physical container, label and inserts. The following are the major functions of export packing and marking:
- It provides containment and protection of the product so it can be safely shipped, stored and handled;
- It allows for easy usage and re-storing and the packaging is sometimes reusable;
- It communicates the company image through its design, label, color, brand and display;
- It allows the company’s product to appeal to a particular market segment through the choice of design;
- It allows for distribution channel co-operation by satisfying the wholesalers’ and retailers’ need for transport efficiency and sales effectiveness; and
- It facilitates new product planning through use of a new package to test-market a product
Adequate packaging protects the product or goods against damage, breakage, contamination, theft and distortion. It also contains the goods in an easily stored container or package, and this allows for convenient and straightforward handing. Similarly, identification marks and symbols are used throughout the world. This is important for the purpose of recognition, fast identification, safe arrival at the destination, compliance with official regulation and with contractual and customer requirements.
Sometimes, there may be need to change cargo and freight from one method of transport to another, known as trans-shipment. Therefore, good, clear marketing help with quick identification and lessen the possibility of goods being overlooked or misdirected. Makings should be on the top, side and end of the crate or package. The marks should also be waterproof and placed directly on the case or crate, rather than on a label that could come off or be removed. There are a number of international symbols used for marking crates. An umbrella, for example, means that the goods should be kept dry. A crossed hook means that to hooks should be used. These symbols are used only when necessary; otherwise their overuse will cause them to be ignored. It is also most important to show on the crate if there is any imbalance of weight within. If this is not done, accidents may occur. The weight of the goods must be displayed where it can be read with ease for safety. It is normal practice to indicate the port mark on the casing or packaging. The exporter may also use a security number marked on the carton and change if from time to time.
Each package or crate will have to be given a packaging number, particularly where crates carry the parts of a large machine, which will need to be assembling quickly on arrival or delivery. Any special instructions such as “keep away from water” should be stenciled clearly in foreign languages, if necessary.
Packaging Regulations
Packaging requirements differ depending on country and method of transport. Security and safety are also important considerations. For many countries, no special regulations apply but others precise rules, which must be adhered to. For example, Kuwait has a particular system of port color marks and most countries demand that the country of origin be clearly marked on the package (for example, USA). Safety certificates are required for certain materials. Some materials are flammable and may be unstable or unsafe in certain situations or weather conditions, in which case, a safety certificate may, therefore, be required.
Timber is sometimes infested and some countries require that all timber (and in some cases timber products, such as furniture and components) is treated before entry or use is allowed. Some countries and indeed, shipping companies require that all machinery be drained of liquids that could spill or are hazardous. Poisons or dangerous cargoes may require special protective packaging. The United Nations Blue Book lists all dangerous goods. Each is given a specific UN Code Number. Each mode be scrupulously obeyed. There are other practical problems to consider. For example:
- Every types of product has its own characteristics. Some must be packed professionally, otherwise insurance companies will not cover them;
- If the product is fragile, it must be given extra protection and the container marked with a broken wine glass symbol;
- If the product “sweats”, it must be packed in crates or Hessian bags;
- If the goods are liable to rust or would be damage as a result of moisture contamination, then a protective gel or moisture absorbing crystals should be used; and
- All dangerous goods must be accompanied by a DGN (Dangerous Goods Note). There must be special markings on the exterior packing as applicable to the mode of transport being used.
Documentary Credit Packaging Requirement
It is vital that whatever packaging is required by any documentary credit or contract is met by the exporter. The importer may request a certain type of packaging and if the exporter does not meet the exact requirements, then the documentary credit conditions would not have been met and the shipper might be presented with a bill for repackaging. This applies even if the request is for packaging in units of ten. If you pack in units of hundreds, then the conditions will not have been met.
Similarly, if the packaging is incorrect or insufficient or if old packaging materials are used (where previous markings are still visible) the exporter is likely to have the Bill of Lading termed. “This means that the requirement in the documentary credit has not been met and the exporter may not be paid.
In complying with customer and other contractual requirements, markings must conform to Letter of Credit specifications, contractual points reached with the customer, contract of carriage requirements and insurance requirements. A customer could, for example, ask that special markings for computer codes be placed on package or crates, in order to facilitate warehouse storage. Special markings may also be required for accounting purposes.
Considerable attention should be given to the preparation and packaging of products for overseas shipment. Every freight forwarder has his favorite horror story of a new exporter who ignored the special considerations that exporting demands in packaging goods, only to have his goods turned back or rejected by consumer.
Packaging Costs
In terms of total distribution costs, packaging is clearly an important cost item. There are several areas to consider;
Cost of packaging material - (this may be offset by the sale of material at the port of destination);
The cost of unpacking (if it applies to the type of product);
Labour cost of packing. Included here might be the cost of package design;
The cost of preparing goods for packing; and
The cost of the weight of packaging in relation to freight cost.
Export packing should be planned and managed carefully to reduce cost. For example, to reduce the external demention of a crate, any reinforcing material or struts should be placed inside, not outside the structure. Similarly, wire can be used to strengthen certain packaging, rather then weed which is heavy and takes up more space.
Custom's duty may be calculated on the weight of a good, plus the weight of the packaging so, the use of heavy packing material might increase the duty payable. Again, plan carefully to reduce costs. For example, lighter materials for airfreight usually cost less.
Gross weight is the weight of a care, or care including the packing materials.
Net weight is the weight of the goods only, without packing material.
Tare is the weight of the packing material alone. it would, for example, be the weight of the empty container.
Net, net weight (some times shown as Nett) is the weight of the goods without external packing or internal wrappings.
There many considerations to keep in mind when preparing an export package;
Breakage Insurance requirements
Weight Nature and value of the goods
Moisture Cost of packaging materials
Theft Total distribution costs
Climatic conditions Marketing considerations
Mode of transport Customer's requirements
Size of transport unit Compliance with statutory requirements
Handling facilities
Some useful tips in packing and sealing export crates include;
Heavy crates should be skidded and provision made for forklift trucks. they should also have notches to facilitate use of strong.
Cement--coated nails are recommended because they hold well. Packages should also be strapped for added strength. Play-wood sheathing is economical and strong.
Avoid over-packing since Custom's duties in some countries are assessed on the gross weight, rather than the value of the package. Additional weight may also result in higher freight charges both in your country in getting the good of the departure port, and in the country of destination in getting the good to the departure port. And in the country of destination in getting the goods to the buyer.
Use waterproof inner liner, moisture-absorbing agents an rust inhibiting coatings on finished metal ports.
Type of packaging
Bailing is a form of packing that consists of a canvas cover. It is used as a sheet covering material for goods such as wool, hay. Cotton, rope and some types of paper. Bailing is cheap and fairly effective, though it provides only limited protection.
Bags may be used and these can be made from jute, cotton, plastic or paper. such bags are quite cheep and are widely used for the transportation of cement, flour, animal food, chemicals and ''power'' products. However, the disadvantage of using bags is that they tend to suffer if in contact with water. They may also tear easily.
Barrels and drums are used to carry liquids or greasy cargo. The containers must be carefully sealed; otherwise, spillage or leadkage may occur. Metal drums also may rust and spoil the material contained.
Boxes and wooden cases are commonly used. Protecting is almost complete and handling is relatively easy to manage. Tea chests, for examples, are sometimes lined to create airtight packing, so that when the goods pass through areas of temperature change, they are not damaged.
Cartons and boxes made from cardboard are used often and are cheap. These are likely to be used in air transport. Polystyrene is used more frequently now and the material is particularly light.
Containers are manufactured packages designed specifically to handle export shipment. They can be obtained from shipping companies and loaded in the exporter’s factory or warehouse, and then conveyed to the port for onward shipment. Containers vary in size, material and construction and are usually best for standard package sizes and shapes. If containers are not completely filled, packages may shift violently within the container during transportation. You shipment need not fill a container. One of the functions of your freight forwarder is to consolidate your shipment with others going to the same general destination. Thus, you are charged according to the weight or cubic measurement used. Shipments by air do not require as heavy packing as ocean shipments. Cardboard or tri-wall construction boxes are usually adequate.
Appropriate packaging is of vital importance in the selling of goods in overseas market and is a factor that should not be ignored in exporting goods. That the goods arrive in good condition should be the exporter’s primary aim. The other important advantage of modern packaging is that crates and boxes may be stacked high, thereby saving floor space.
Certain cargoes are considered dangerous and special arrangements may have to be made with a carrier for transportation. Such goods would include explosives, gases, and inflammable liquids, oxidizing materials, weapons and corrosives. The ship owner or airline will normally require details of such cargo and adequate warning in order that arrangements may be made for carriage.
As a company selling in a foreign market, you must confirm from your overseas customer whether your current packaging is adequate for the new market or whether you need multiple packages for distinct sub-markets. Sometimes, a standardized package can be used worldwide, such as Coca-Cola uses, although language on packages may need to change, depending on the target market. In Nigeria, the Nigeria Export Promotion Council (NEPC) can provide useful advice on export package.
EXPORT PRICING.
You must have a clear idea of the price for which you will sell your goods or services. It is also important that you have definite delivery terms (FOB, C&F or CIF). You will need to advise a customer of both these points either in your letter of export offer or in your quotation in response to an inquiry
Several factors interplay in deciding the export price for a product. However, what it costs you to produce or procure your product from the "bed-rock" for determining the right export price for the product. What the market can bear or afford sets the ceiling. Other factors to consider include the strength of your product in the market, how essential the product is to essential buyers, who your competitors are and what they are charging for similar or alternative products that satisfy the same wants, and whether you can show that your product is better than others (so that customers will no doubt be prepared to pay more for it).
It is worth learning about the economic concept of "elasticity of demand" which is a layman's terms means: how sensitive buyers are to the price of your product. The demand for some product is relatively incentive to price (inelastic) so that if you have a high high price, you will not put customer off. This might apply to small business making handcrafted or exclusive goods, or providing a specialist service. To some buyers however, a low price might even be a deterrent because they see price as an indicator of quality. But at times, you try to add a few dollars to a product for which demand is very sensitive to price (elastic) and you find your customers switching from your product to your competitor's. You will need to keep close watch and monitor what your competitors are doing to attract buyers, what discounts or bonuses they are giving away. For example, if you were running a small bar at the seaside or amusement park where there were plenty of other similar eating-places, you might find it difficult to charge more that your competitors for a bottle of soft drink. The same applies in global trade competition. Before determing your export price, you need to consider the following cost elements:
Fixed Cost- These include your overheads. You have to pay these bills even if you cannot sell any of your products. Utilities like the telephone, rent and rates, electricity and wages are all include here.
Variable Cost-These are direct costs, which will vary depending on the volume of goods being produced or procured for export. For examples, raw materials. Remember to take advantage of discount available from your suppliers for immediate cash payment or bulk purchases. Ask what they usually give.
Gross Profit: This will be the difference between the total cost of the product and the sum received from their sale.
Price- Because the economic climate varies from country to country, some exporters sell the same goods at different prices to customers overseas. You must decide whether to quote one price for all markets or different prices. Remember, if your price is too high you may lose customers and if too low, your profit could suffer. You can find out the current price of your export product by calling the foreign trade department of your bank or the Nigeria Export Promotion Council.
Currency- you must decide whether your price will be quoted in your own currency or that of the country to which you are exporting. You might even choose a third currency. But, if you are a beginner, it is suggested that you start by quoting in Euros for European countries and the United States dollars for all other countries. The exchange rates play an `important part here and since they fluctuate, you must be very careful. It might well be that your customer insist on paying with a particular currency, in which case, your quoted price may cause you financial problems. Always consult with your bankers before contracting.
Delivery Terms- Every contract of international trade must have terms of delivery.
The importance of this cannot be over-emphasized. Your delivery terms will likely be one of the INCOTERMS already discussed in the book. The use of INCOTERMS defines the right and obligations of the parties and establishes the point in the transit of the goods when title to the goods passes and the risk pass from the seller to buyer. For example, the term FOB. Apapa, means that once you have loaded the goods into a ship at Apapa port, you have fulfilled your obligation. The responsibility for insuring the risk and transporting the goods from there to the buyer's destination in that of the buyer. The accompanying documents: invoices and bills of lading will be marked "freight collect". This means that the buyer will have to arrange for payment of freight and insurance.
Another example, C&F Miami port USA means that the seller will have to arrange and pay for the carriage of the goods to port of Miami in the USA. The necessary documents: Invoices and bills of lading will be marked "freight paid" CIF New York port means that in addition to freight, the seller will also have to arrange for insurance as well, up to the port of New York USA. It is important to note that in addition to the cost of goods or services, there are likely to be other costs to be borne by the seller or buyer or shared between them.
The prices fixed for import and export is vital to profitability. If there is a long delay or misunderstanding before a contract is complete, a change in prices of raw materials or freight rates can seriously harm the profit margin. In other to protect against inflation, particularly with long term contracts, it is essential to have a clause written into the contract/agreement, allowing the exporter to adjust prices in line with inflation.
Accurate records of all expenses must be kept. Most of the overheads connected with your business (including actual bad debts you have suffered) can be used a business expenses to reduce your tax account till when your account is drawn up at the end of the year.
Export Procedure/Documentation
Therefore federal government of Nigeria issued new guidelines for both exports and imports in 1996. The export guidelines are aimed at insuring strict accountability and transparency in the conduct of international business by Nigerians as a first step towards building a good image for the country. The objective is to insure that the quality and quantity of all export as well as the true value of goods to the consignally with the claims on all the accompanying documents. the new guidelines/requirements include:
Registration as an exporter with NEPC
All aspiring exporters are required to register with the Nigerian Export Promotion Council. The NEPC is the government agency charged with the responsibility of promoting exports of made in-Nigeria goods. In order to register, the prospective exporter must be a limited liability company or co-operative society and must obtain the NEPC registration form at the price of N250:00 (Two hundred and fifty Naira only). The application form is obtainable from NEPC zonal offices in Kano, Jo, Port Harcourt, Enugu, Lagos and the head office in Abuja. Duly completed forms should be submitted to the nearest NEPC office. A specimen of the NEPC registration form is provided in Appendix 10. Note that if you fail to register at the nearest NEPC officer (for example, your company is situated in Lagos or other states in Nigeria, but you prefer to register in Abuja), you will be required to pay an additional sum of N500 (five hundred Naira only) as surcharge. Usually, the sum of N2,000 (two thousand Naira only) s required to be paid as processing fee and the following documents submitted.
a. Certificate of Incorporation; and
b. Memorandum and Articles of Association.
All registered exporters with NEPC are required to renew their registration every year by paying the sum N1,000 (one thousand naira only) and submission of the following documents:
a. Certified true copy of form CO7 (given particulars of the company directors);\
b. Present original copy of exporter’s registration certificate;
c. Payment of N1,000 renewal fee;
d. Evidence of export performance in the year; and
e. Current company tax clearance certificate.
For co-operative societies, evidence of registration would be required in place of certificate of incorporation. After submission of all required documents, registration takes tow (2) weeks before an applicant exporter is issued with a certificate inscribed with a code number.
Other requirements to ensure compliance with contractual obligations embodied in the export transaction are.
1. The exporter must complete the Nigeria Export Proceeds from (NXP) and register it with one of the authorized dealers (i.e a commercial bank) in Nigeria;
2. The exporter must ensure that goods to be exported are made available to inspection agents for Pre-shipment Inspection and the Certificate of Clean Inspection (ICC) issued for the goods;
3. After satisfying procedures 1 and 2 above, the packaging of the goods may then commence;
4. After packaging, the exporter can now move the goods to the port of shipment for Customs Inspection. The inspection is conducted at the newly created Customs Processing Centers (with eight Customs Processing units) at major ports in Nigeria.
5. After final inspection by the Customs is completed, the loading an actual shipment of the goods can commence, and
6. The export proceeds must be repatriated through the banking system to the exporter’s Domiciliary account in any commercial bank of his choice ion Nigeria.
Movement of Form NXP: The Nigeria Export Proceeds form is the current document to be used for exports in Nigeria. The exporter will collect the form from the authorized dealers (a commercial bank), complete and return it to his bank for stamping. The NXP form, which comprises six copies, will be distributed by the bank, which will retain the original and duplicate copy. The remaining four copies are dispatched by the bank to the Export Inspection Agent together with relevant shipping documents for mandatory inspection of the goods. After the inspection exercise, the inspection agent shall retain the triplicate copy and forward the other three copies to the Nigeria Customs Service (NCS) for their necessary endorsement. After shipment, the NCS forwards the quadruplicate copy to the Central Bank of Nigeria (CBN), the quintuplicate copy to the NEPC, while the last copy goes to the exporter. Your bank is required to confirm repatriation of the export proceeds on the original NXP form earlier retained by them to the CBN. Specimen copy of the NXP form is provided in Appendix 11.
Documentation Requirement.
The following are the basic documentation required to facilitate export trade in Nigeria. They vary according to the nature of product and export destination:
1. Pro-forma Invoice: this document is also known as export quotation and is issued by the exporter to the importer. It is usually required by the overseas importer’s bank to enable them process payment for the goods.
2. Commercial Invoice: is issued by the exporter to the importer showing all charges and conditions of sale of the product to enable the Customs in the importing country to assess duty payable on the goods;
3. Certified Invoice: only required: only required where an independent verification is needed, e.g. certified invoice declaring the true origin and value of the goods etc. Issued by a Chamber of commerce;
4. Consular Invoice obtained from the consulate of the country of export destination. Only required where the importer wants the exporter’s invoices validated or checked by his country’s Consulate;
5. Form EUR: 1 for Exporters into European Union- this form should be completed for all exports into the European Union to enable the exporter take advantage of duty concessions granted to exports from the African-Caribbean and Pacific (ACP) countries by the EU under the EEC-ACP Lome Convention. The forms can be obtained from the offices of the various Chamber of Commerce and NEPC officers in Nigeria.
6. Generalized System of Preference (GSP) since 1972, a number of countries have fashioned out individual schemes of tariff preferences for the benefit of developing counties, including Nigeria. Importation of such specified products into those countries attracts very low rates of Customs duty. This makes products benefiting from such schemes competitive compared with similar products from non-beneficiary industrialized countries. The form is obtainable from the Nigerian Customs Service;
7. Phytosanitary Certificate: this certificate is required when fresh fruits, vegetables, flowers, plants ad plant products are shipped. The certificate confirms that the goods are free from diseases or insect pests. It is issued by the National Plant Quarantine Services with officer located in all main ports and state capitals;
8. Certificate of Quality and Fumigation: the appointed pre-shipment inspection agents are to issue a clean certificate of inspection (CCI) for all exports from Nigeria. The CCI represents the certification of quality, volume and value of all exports. The Federal Produce Inspection Service renders fumigation services;
9. Packing List: this document supplements (but does not substitute) commercial invoice when quantity, weight or contents of individual units in a shipment vary.
In order to ensure efficiency of export transactions, it is important that the exporter has adequate information of all relevant export documents, their uses, and where to obtain them. The complete list of exports documents and where to obtain them is provided in Appendix 12.
Exportation of Raw Unprocessed Goods and Commodities.
The export (Incentives and Miscellaneous Provision) Amendment Decree of 1992 provides that all raw or unprocessed commodities whether mineral or agricultural shall be exportable on the payment of a levy as may be prescribed from time to time by order of the NEPC. The Decree further provides that, save for the aforementioned levy and other NEPC guidelines, all exportable products from Nigeria shall be exported without obtaining export license, provided, all existing foreign exchange regulations are compiled with. This is without prejudice to the current export prohibition list.
Non-Commercial Exports
This applies to goods for which foreign exchange earnings are not realizable and therefore, are exempted from tax and duty, for example, shipment of gifts, personal effects by Nigerians and foreign national and trade samples. Others are:
· Shipment of machinery, equipment, vehicles, all manner of tools and implements for repairs or replacement of parts abroad and their return to Nigeria;
· Shipment of foreign contractors’ machinery and equipment abroad after completion of their contracts in Nigeria, and Nigerian contractors who perform contract work abroad; and
· Shipment of pets, live animals, rocks, plants and product samples for scientific and non-commercial purpose.
For purposes of the above shipment, a Non-Commercial Export from (NCX) is usually completed by the exporter or his agent and approved by the Central Bank of Nigeria (CBN) before shipment can take place. The form is obtainable from the CBN.
The Vital Role of Insurance
Insurance has been used in one of form or another for hundreds of years and many of the terms in use today are exactly the same as they were centuries ago. There are five important areas of cargo and insurance you should be familiar with:
1. The types of insurance and policies available
2. Insurance procedures;
3. The liability for insurance
4. Additional risks and warrantees; and
5. Insurance claims.
The term Cargo insurance covers all aspects of export or marine insurance. Transport insurance (covering risks involved in the shipment of goods by air, road, rail and sea) is included in the overall term.
When goods are exported by sea, there are two aspects of insurance involved. One is the insurance of the goods and the other is the insurance of ship. The elements of insurance are essentially the same but there are points that differ. For example, the responsibility for insuring the ship is that of the ship owners. However, the owners of the goods to be shipped are said to be participating in the “adventure”. He, therefore, shares in any losses. If some of the ships’ cargo has to be thrown overboard in order to save the ship (say in a storm or in an accident), then both the owner of the lost cargo and the owner of the cargo saved are involved in the loss or avoidance of loss. When this occurs, a ‘General Average’ is stated. This means that each cargo owner contributes towards the damage suffered by the ship or the cargo. This is shared in proportion to the value of the cargo. It is, however, possible to insure against the General Average loss.
General Average, therefore, occurs if any portion of the cargo or ship is sacrificed in the interest of safety. It also applies if any expenditure is incurred to preserve the ship and cargo from danger in transit. This is applicable to everyone concerned in the export or shipment adventure.
“Particular Average”, on the other hand, concerns the individual and relates to the insurance of cargo. Particular Average insurance is contained within most standard cargo insurance policies. The policy would cover damage and loss from fire, the sea, theft, jettison and barratry- (Barratry is the wrongful act by the master of crew of the ship resulting in damage or loss). Other standard clauses are:
The Termination of Adventure Clause- this clause covers the possibility (and the right) of a ship-owner terminating the journey before or other than its originally stated destination;
Duty of Assured Clause- the clause safeguards the rights of the individual assured, should there be any delay in discharging conditions of shipment or carriage;
Reasonable Dispatch Clause- covers the placement of the insurance claim within a reasonable time.
Insurance Institute Clauses
These are the Clause A, Clause B and Clause C. each of these clauses offer a standard list of items that are covered by the clause. Clause A is the most comprehensive cover, Clause B offers slightly less elements of cover, whereas Clause C offers still less cover. None of the clauses automatically includes War Risk- this has to be taken as an additional premium if required.
The exporter must have some insurance in an export operation even if it is minimal but adequate. Once you have decided, with care, how and against which risk you want to insure your goods, or those of your customer, an insurance policy has to be established. Such a policy is available from reputable insurance companies, which abound in Nigeria.
If your goods are to be sent abroad by sea, for example, you will have to state the name of the ship carrying the goods (and/or the shipping company), the port of destination and the port of departure, quantity of consignment, any identification markings and the sum for which the goods are insured. It is vital a reputable insurance company is used in order to get the best possible insurance quotation. The quotation will be written on a slip, which will also record the risks taken on by the insurance company. The insurance company will draw up the agreed policy and you will pay the premium when the policy is issued. A careful study of the levels of covers by each clause is recommended. Also, not that when exporting under an INCOTERMS (CIF or CIP) you are automatically required to insure at least to Clause C, unless your customer requests otherwise.
Where export is done on a regular basis, the need to take out of fresh insurance policy on each transaction may be obviated by arranging for either of:
Open Cover- this policy will give the exporter cover over a definite period, say a year, on a provisional basis. On each export, a policy will be issued to cover each shipment; or
Floating Policy- this policy covers a set sum of over an unspecified period of time. The policy usually lasts as long as the sum deposited. The insurance company will issue you an Insurance Declaration Forms, which are for use when a single export shipment is made and the details will be recorded on the Declaration Form and sent to the insurance company.
The insurance company is most concerned that the goods are packed properly and are stowed safety in the ship. It may also require a certificate of inspection to enable them evaluate the risks involved.
Premiums: The premium is the price of the insurance. Premiums vary according to the type of risk involved, the type and composition of the cargo and the destination. Previous exporting experience may also be considered and this will include your packing expertise and efficiency. Distances and time involved in the export operations are also taken into account. Generally, the average marine insurance cost is 0.75% of the value of the goods.
Principles of Cargo Insurance
There are three main principles of cargo insurance. These are: Indemnity, Utmost Good Faith and Insurable Interest.
Indemnity: basically, indemnity means security from damage or loss and compensation for loss or injury. An insurance policy is a Contract of Indemnity. This means that the assured is indemnified against loss or damage occurs, the indemnity is computed in financial terms. The financial value is known as the Insurable Value. This is the sum stated in the policy, should damage or loss or occur.
You may not make a profit out of an insurance claim. If a loss or damage occurs, you will not be paid more than you have lost. If you suffer a total loss, then the full value of the insured goods will be paid. If only part of the cargo is lost or damaged them a percentage is paid in proportion to the damage or loss. Your insurance company may have the right to claim any of the damaged goods once payment has been made under your insurance policy.
Utmost Good Faith: You must as an exporter, declare to your insurance company or underwriter all the details that you know to be relevant to your cargo and its shipment. This includes having arranged for adequate packaging. The decelerating must be made to the best of your knowledge and must be true. If you withhold any information, the your policy could be void.
Insurable Interest: Because you will benefit as the exporter by the safe arrival of the cargo in its destination, or suffer loss or damage should the goods not arrive sagely, you are said to have an interest in the cargo to be insured. To insure the cargo, you must have an insurable interest in it, you must be involved with the risk and liability. Without insurable interest, it could be argued that you were gambling and this is not allowed.
If you own the cargo, then you have Full Interest in all or part of the cargo. If a Divisible Interest exists then it stops at some point during the transaction, say during the sea voyage. If your customer takes on an interest in the goods during transit, then a Contingent Interest exists. When loss occurs. The customer will have an Insurable Interest in the cargo even if he or she did not have it at the outset. No claim may be made by anyone who does not shave a insurable interest in the cargo.
Transport Methods
There are about six main methods of transport used. These are:
1. Sea;
2. Air;
3. Road;
4. Rail;
5. Post: and
6. Courier.
Sea transportation is the most cost effective method of shipping large cargos where time is not a sensitive issue. Available shipping statistics from Lloyds of London Press shows that about three quarters of all goods are shipped by sea worldwide.
Air transportation is considerably faster and there is far less chance of goods being damaged or lost transit. An added advantage is that goods shipped by air require less packaging than goods sent by sea. The drawback, of course, is the cost.
The type of transport to use will depend on the nature of the goods, condition of sales, time factor and customer preference. For your guidance: it is advisable to use air transport where goods are of high value or are needed quickly or where they are perishable (for example, the trade in exotic flowers and fresh herbs has only been made possible by air transport). As a general rule, the shorter the period of time goods spend in transit and the fewer hands they pass through, the better their chances of not being damaged, pilfered of lost. Be sure to use a reliable freight forwarder- they are the exporter’s best friends.
Export Financing
The problem of export finance occurs when a contract has been signed and goods have to be produced or procured and exported, all of which required outgoing costs before payment is received for the export goods. The problem is not uncommon, it is universal and there are several ways of solving it.
The usual way to finance a business is by the use of capital made available by the owners (equity fund) and shareholders of the company. However, where this is not enough, many companies borrow money to finance business transactions. Your bank can supply loans and overdraft to meet this need and the business pays back the loan with interest at a given later date.
Whether to borrow money or not requires careful thought and depends very much on the profitability of the export transaction. Bear in mind that interest on my borrowed money could well cut into your profit margin. Also, the period of time between the beginning of the contract and payment for is varies with the type of export contract. Contracts, from start to finish are rarely complete in under one or two months. Credit periods may need to be taken for many months and in some circumstances (such as long revolving export contracts), a year.
If your customer is paying you with Bills of Exchange (Documents against Acceptance (D/A), or Documents against Payment D/P), or Irrevocable Letters of Credit, then the date for payment will be fixed and will be in the near future. The exporter will not have to wait too long for payment. Since these documents will be with your bank and they are of financial value, your bank may loan you money against the document.
Back-To-Back Credits
You may not be the manufacturer or producer of the export products you trade in, in which case, you are operating as an export trading company and need to pay the manufacturer or other suppliers for products purchased for export. In this case, you can inform your overseas buyers to pay you by confirmed, irrevocable, transferable and divisible Letters of Credit. This will enable you to pay your suppliers by opening what is called a Back-To-Back Credit based on the original Letter of Credit payment from your overseas customer. Your bank will use part of the credit to pay your local suppliers and the balance to pay you. Note that the suppliers would be paid first from the credit before the exporter. But, this is still good because your need to borrow money, perhaps at high interest rates, to finance the export transaction will be minimized, if not completely eliminated.
Do not allow capital issues or export finance problems to discourage you from entering and persisting in this field of international business. Finance is a universal problem and assistance is available. We mentioned earlier that the Nigerian Export-Import Bank (NEXIM) was established to assist exporters in Nigeria with loans. If you have a legitimate export purchase order but require a loan to finance the transaction, feel free to approach your banker who will either loan you the money or help you access the NEXIM export loan facilities.
Export Loans Applications
The presentation of the following information and documents will acceleration the review and processing of your export loan application.
a. Signed memorandum and articles of association;
b. A copy of the company’s certificate of incorporation;
c. A copy of the company’s tax clearance certificate;
d. A copy of the company’s NEPC registration certificate;
e. A brief description of the company;
f. A description of its overall business and management experience;
g. A description of the export proposal including the proposed commodity, the proposed offshore buyer and a transactional profitability analysis;
h. The company’s authorized and paid-up share capital;
i. The company’s ownership structure; and
j. Audited financial statements for the past two years, if available, otherwise a management statement of account since the business commenced.
Long-Term Finance
Exporters may be involved in long-term projects where many shipments are made before payment is received. Long-term finance will require careful negotiations and special international organizations would possibly be informed, such as the International Bank for Reconstruction & Development (IBRD). Such an organization would usually pay the exporter immediately upon delivery of goods and with minimum conditions. The customers would pay the organization over an agreed period. Governments can, of course, he customers here. Aids programs tend to operate in this way, the idea being that the goods are delivered with minimum delay. Long-term finance is usually available only where a very large amount of money is involved.
Exchange Rates/Risks
Inevitably, a foreign currency is going to be involved in the export payment process. It may be foreign to the buyer or the seller or, in certain circumstances, to both of them (for example, a product might be sold to a country with weak and non-convertible currency, the seller might required payment in a “hard” or easily convertible currency- he may have to accept whatever hard currency the buyer can obtain.
Any export will normally involved the buyer paying in either his own national currency or that of the seller’s country. Which of these is specified will determine which party carries the exchange risk. This is because any movement in the relative values of currencies taking place between the date on which a contract is signed, and on which final payment is made, will mean that the seller may receive less (or more) than was intended and the buyer may pay more (or les) in turn.
To illustrate: A, a Nigerian exporter, sells goods worth N1, 000,000 Naira to B, a US. Corporation. B insists that he be invoiced by A in US Dollars. At the time the sale is agreed, the Dollar exchange rate to the Naira is N1,000=$1 and the invoice is made out in the sum of $10,000. This means the Nigerian exporter is bearing the exchange risk. Whatever happens, the US buyer knows he will pay $10,00 for the goods, the Nigerian exporter too knows he will receive $10,000. What the Nigerian seller does not known is what exchange rate he will enjoy when he converts the Dollar to Naira; - this is what is known as “exchange risk”. If the rate moves of N1,000,000. If however, the Naira appreciate to N80 to $1 then he would receive N800,000 Naira.
Also to be considered is the fact that exchange control regulations may come into play in either the buyer’s the seller’s or, just as likely, in each country, especially if the country has monetary problems. Again, your bank can advice you on how to navigate through these difficult areas.
Selling into the U.S. Market
The choice of a distribution channel is probably the most important one a company has to make. Having selected an export product, you have to find a market to sell product into. You may want to export into the U.S market in order to take advantage of trade benefits offered by the Africa Growth and Opportunity Act. The benefit is mutual; for the American importer, he is able to purchase goods for sale in the U.S. market, free of tariffs. For the Nigerian exporter, his product is able to compete favorably in the U.S market; for the American importer, he is able to purchase goods for sale in the US. Market free of tariffs. For the Nigerian exporter, his industrialized countries. For this purpose, you need to select from the list of products approved under the AGOA. Then, you need to locate producers and suppliers of the particular product in Nigeria. Next, you will need to find a buyer for the product in the U.SA. For this, you can select from the list of Over 2,000 importers in the USA. Now you have the product of and you know who the potential buyers are. What you need to do is to make an export offer to your target buyers.
Your export offer may be in the form of quotation or a pro-forma invoice which should include the unit price of the product, terms of delivery, minimum order quantity, information about samples, the U.S Customs tariff number for that product, etc. Once you send out an export offer, you must be prepared to deal with replies and enquires. For this reason, you should send out not more than ten export offers at a time, even if you have contacts of a hundred potential buyers. Then main advantage of this is that you are able to manage the resulting enquiries more efficiently, and should there be any error on your first export offer, you will be to effect correction before mailing out to new customers.
Legal Issues
In selling your product in a sophisticated market such as the USA, it is important that you take legal precautions. Earlier, we discussed the importance of a trademark in establishing your product identity. In America, it is customary to protect a business trademark by applying for legal protection. The U.S. government protection for business that register a unique trademark. It prevents another company from doing business with a similar name, symbol or character as your company. This prevents such a fraud from infringing on your product’s reputation in terms of sales or ruining your product’s reputation by failing to meet your quality standards. However, a trademark also holds your company responsible for shoddy goods or inadequate service.
Under the Lanham Act of 1946, there is a nationwide registry of marks or sellers participating in inter-state commerce. While states can offer trademark protection, it is usually best to obtain federal protection, which is broader. It should be realized though that a trademark can only be issued once, there is a product that is actual being sold under that mark, even if it is sold overseas and not yet in the US. Trademarks entitle a company’s product to carry the symbol. If your company has an invention or a new art, machine, manufacturer or composition of matter or any new improvement on these items, you can apply for a patent under the authority of the patents Acts of 1836 before doing business in America. Available statistics (for 1998) shows that more than 163,000 patent were issued. This indicated that there is an ongoing effort to create or improve on products and processes, and if your product or process is close enough to an existing one, that company can use your improvements to obtain a patent and prevent you from doing business in the United States. Therefore, it is important to obtain a patent to protect your short-term and long-term interests.
To obtain a patent for your products in the United States, you may employ the services of a U.S attorney at low contacts the US. Patents and Trademarks office at their web site; www.uspto.gov or by telephone at +1-703-308-4357.
U.S. customs import rules
There are specific rules that must be followed if your products are to be brought into the USA and them distributed as you expect. In this process, the US. Importer plays an important role in ensuring that your goods satisfy customs requirements as must all merchandise entering the U.S. This process involves entry, inspection, appraisal, classification and liquidation.
It is important that the classification number of the number of the merchandise be correct according to the Harmonized Tariff Schedule of the United States. Each duty-free item under AGOA has such a number and must be properly processed. Any duties or processing fees are the responsibility of the importer, and the customs Service determines the rate of duty payable (if applicable). The importer is also responsible for ensuring that the merchandise being imported meets admissibility requirements, such as proper markings, packaging or safety standards. Before deciding on these, you should consult with your importer to find out his requirements.
Imported goods must arrive one of the official ports of entry, and the Customs Services must authorized delivery of the merchandise for it to be considered to have entered the US. The carrier of the goods, not the US customs make notification of the arrival of the goods. Merchandise not processed through the Customs Services within 15 calendar days of its arrival in the port of entry is sent by the Customs service to a general order to be held as unclaimed.
There are two types of entries.
1. Information entries involve personal shipments, commercial shipments and mail shipments imported for us or sale. (in most cases at a value of $2,000 or less).
2. Formal entries are generally commercial shipments supported by a surety bond to guarantee payments of duties and compliance with Customs Services requirements.
There are four documents generally required for formal entries.
1. A bill of lading, Airway Bill or Carrier’s Certificate;
2. A commercial Invoice from the merchandise showing the value and description of the goods;
3. An entry manifest (customs form 7533) or an entry/immediate delivery document (customs Form 3461).
4. Packing List (where appropriate); and
5. Other documents needed to determine whether the merchandise can be admitted into the US.
The US Custom Service examines goods to:
· Assess the value of goods for Customs Service purposes and dutiable status;
· Determine whether goods are properly packed with the country of origin label;
· Determine whether goods have been correctly invoiced;
· Asses whether the shipment contains prohibited articles;
· Ensure that all requirements of relevant federal agencies have been meet; and
· Judge whether the amount of goods listed on the invoice is correct and that no shortage or excess exists.
Should the Customs service determine that the entered description of the goods does not match the contents in quality or value or that the classification of the goods is incorrect or that there is a different applicable duty rate than the one indicated by the importer, has deliberately provided false information, that importer may be liable for a protest and receive an administrative review.
For more information on import regulations, procedures Customs Service in the United States, contact the US Customs Service through their web site at www.customs.gov or by telephone at: +1-202-927-1000.
List of Asia, American Importers
You have the product and have identified a target export market, let’s say the USA, but the have not idea who the actual importer, distributors or volume buyers of the particular products in the United States are located. What can you do? The solution is to find and buy a credible mailing list of importers; wholesalers and distributors in your target market and send them export offers. However, a good mailing list can be very expensive. A credible list of importers in the USA may cost you about $1000. But in order to assist exporters wishing to sell into the USA, a list of importers in the US market is included in this book. You will find a credible list of American buyers with full contact details, including what they import. We have gone through great efforts to screen this list for your benefit. Only those companies that are importing large volume of goods annually are listed. You can approach them directly with your export offers. We give you this as part of your fast tracks to profit in export business.
In conclusion, it must be realized that just because a company is importing the type of products you offer, does not mean they will automatically buy from you. Success in winning export sales depends on the skillful ability to convince the importer of the abilities and reliability of your export service. Remember there are competitors; these are the companies from whom your target customer is already importing. As a new supplier, your buyer will want to be assured that you can perform by giving them quality products at reasonably prices and prompt delivery. These are the qualities and the selling points of a good export company. The list of American buyers is provided in Appendix 13.
Locating Quality Buyers in Other Countries
You may want to consider exporting to other countries. For this, you need to obtain specific information about your target market. Find out who are already exporting to that market and obtain current trade statistics from the Chamber of Commerce, your bank, the NEPC and the country’s embassy. You will need this information to help you locate actual buyers in your target market. The main advantage of working through trade offices mentioned here is that the information will be provided free for charge. Also, the firms of good standing and able to carry out their obligations. The disadvantage is that it takes time for the various government department to collect and collate their information and you may have to wait some time for a reply.
Using Advertisement
Advertisement produces results quickly. The advertisement text must be carefully and creatively written to get the desired results. The essential ingredients of a good advertisement are:
· “Stop Ability”- it should easily catch the eye;
· Copy should be focused on the product benefits. Facts don’t sell products, benefits do facts should only be used when they contributed to the advertisement message;
· The advert should contain a positive call for action on behalf of the buyer, for example. “Special Offer opens until….
· The information contained in the advert should be both true and accurate.
You can advertise in an international magazine, such as Times International or a locally circulating magazine in the country of your target market. But, be aware of the cost implementations. Advertisement is a trickly business and not all advertisements produce results. You should treat advertise with care. You can, of course, advertise on the Internet. But for this, you need to have computer skill or your will require the services of an Internet marketing company who will, of course, charge a fee for its service.
You may not expect large orders initially. Whether your advertisement attracts the attention of a large import company, or catches the eyes of a small shopkeeper who also wants to do a bit of importing on his own, the first orders are going to be “trial orders”. Trial orders are cautious orders, and so not very large. Your new customers are going to try you with small shipments first. When you deliver and perform to their satisfaction, they will then be confident enough to place large orders.
Selling Through Overseas Agents Representatives.
A good import agent resident in your overseas target market can tremendously increase your volume of exports and company performance in that market. As the man on the ground, he knows the major importers, volume buyers and distributors of your particular product line in his country more then you do. It is therefore, a good idea to consider appointing an import agent resident in the overseas country you target to sell in to. For this purpose, you will need to locate and recruit a well-trained and certified international trade agent who can give you professional service and successful results. The process for location credible agent can be time consuming. But, quick result can be achieved by advertising in a local trade newspaper of the trade country. Insist on professional agent trained by a chamber of commerce or other professional institutions.
Internal Agency Agreement
Once the agent is contacted and subsequently appointed after due investigations, then is need to have a written and signed agency agreement in place. Simply put, an agreement is a negotiated understanding between two parties involving the acceptance by each of clearly identifies and understood duties, obligations or responsibilities.
The trade agency agreement will simple state the terms of the agency, the specific market territory covered by the agent, duration of the agency, product simple procedures, and agreed rates of commissions payable to the trade agent on each successful export sales, whether the agency is sole and exclusive or non-exclusive.
Note that if you appoint a sole and exclusive agent, you will not be able to appoint anther agent in tat market territory, whereas a non-exclusive agency agreement gives you the freedom to appoint as many agent as are desirable in the some country. The agreement should also contain a clause that prohibits the agent form handling or promoting a similar product from your competitor. Look carefully before you chose. A good import agent/representative based in the overseas target market can contribute to your success in penetrating that market, while an incompetent agent wills merely waste your time.
IMPORTING, THE FLIPSIDE OF EXPORTING
For every exporter, there is an importer somewhere. Indeed, importing is the culmination of the export process described previously. By being at the end of the process, the importer is spared many of the complexities and details that fall on the shoulders of the exporter. However, most of the activities of importation are the same as for exports but occur in reverse sequence. When an importer buys from the exporter, he pays not only for goods involved, but also for the diligence of the exporter to ensure that the goods reach their destination intact and on time.
“Free Trade’ has been the essence of importing for sometimes now. This means that there are few or no restrictions on what or how much is imported into a country. Such a system has always favored countries whose productivity is high because they can sell more overseas. Nowadays, some industrial countries are asking for import controls because they want their people to buy the goods manufactured at home. The governments of developing countries are also concerned that foreign products will flood their domestic markets, thus strangling local industries in the process.
Import controls are quite difficult to introduce and enforce due to many trade agreement that exist between nations. A nation should try not to sell its goods more cheaply overseas than it does at home, otherwise “dumping” may occur. Dumping can considerably harm a country’s industry. What happens is that a country will sell its goods at extremely low price aboard in order to gain foreign exchange. The home producer is affected markets and countries will not be able to compete with these low prices and so may go out of business. Unless a country is extremely wealth, it would be most unwise for it to import goods that it could more easily make itself.
Imports are “controlled” in some formal way by most countries, in spite for the concept of “Free Trade”. Because of the formalities involved, an importer must check national and international regularly. Commercial, legal and administrative details constantly change in many countries and the importer must be abreast of such changes.
Import Documentation/Procedure
The demand for imported goods such as raw materials, machinery, equipment and all kinds of consumer products remains very high in Nigeria. More than 50 percent of the Nigeria populations are traders and many of them have made fortunes through import business. This trend is likely to continue for many more years to come. Important can be done either through the official channel (i.e by purchasing the forex through the CBN and using your bank for the elsewhere and used. The official source is usually cheaper but slower because the forex may not be readily available. The unofficial channel is faster but costly. You will need your bank assistance whichever channel you decide to use.
The following documents are usually required (for official channel);
1. Form “M”- seven copies to be completed.
2. Tax clearance certificate
3. Pro-forma Invoice
4. Insurance Certificate
5. Provisional import duty declaration.
Other standard shipping and payment documents are”
a. Commercial Invoice or Consular Invoice (if applicable)
b. Bill of lading
c. Bill of exchange
d. Airway bill
e. Inspection Certificate
f. Certificate of Origin.
Documentary Letter of Credit (L/C)
A letter of is a payment document (which is a standard printed form) issued by a bank on behalf of the applicant (the exporter) guaranteeing payment to the exporter. The money would be paid provided the exporter meets the conditions stated in the letter of credit.
A letter of credit, therefore, establishes a conditional account for the exporter in the bank in his own country from which he can draw as soon as he delivers the goods and satisfies the terms of order by the importer. A letter of credit performs at least three unique functions:
1. It shifts judgment on the credit standing of the importer to a banking institution in his country, which is usually more acceptable to the exporter;
2. It protects the exporters by substituting bank credit for the importer’s credit;
3. It protects the importer by allowing him to communicate to the paying bank the exact conditions that must be satisfied by the exporter before the drafts are honored. Payment will be stopped in case of non-performance or the exporter fails to meet the terms of the credit.
Opening Letter of Credit
To open a letter of credit, the importer must satisfy his banks credit standards and agree to supply the bank the funds to honor the beneficiary’s drafts when they are drawn against the letter of credit as well as pay the necessary bank charges. Title to the shipping documents and goods will pass to the bank if the importer fails to provide the necessary funds.
Letter of credit transaction
The graph below illustrates the movement and procedure for opening a letter of credit- A Nigerian is importing from the USA.
US. Bank (2) Transfer of credit Nigerian Bank
Most foreign suppliers usually requires payment with letters of credit from acceptable overseas banks for the execution of their export contracts. The importer’s bank will either issue the letter of credit itself or as its correspondent bank to prepare and issue the letter for it and to transfer the credit to a bank in the exporter’s locality. The local bank advices the exporter about the arrival of the letter of credit and usually honours his drafts on behalf of the opening bank when he presents all shipping documents. Sometimes, the advising and paying transactions are divided among different banks.
Advising Bank: Located in the exporter’s country, it notifies the exporter about the arrival of the credit and presents it for his examination and approval.
Paying Bank: The draft is drawn on it and therefore accepts or pays the exporter subject to re-imbursement from the opening bank.
Negotiating Bank: Any financial institution not named in the letter of credit that voluntarily accepts or pay the draft by the beneficiary (exporter). For this service, it charges a fee or discount the draft.
Advising Bank: Located in the exporter’s country, it notifies the exporter about the arrival of the credit and present it for his examination and approval.
Paying Bank: The draft is drawn on it and therefore accepts or pays the exporter subject to re-imbursement from the opening bank.
Negotiating Bank: Any financial institution not named in the letter of credit that voluntarily accepts or pays the draft by the beneficiary (exporter). For this service, it charges a fee or discounts the draft.
Types of L/C
Revocable Letters of Credit-the importer retains the right to unilaterally cancel the credit anytime before the accepting or paying bank pays the exporter. This types of credit is confined to transactions where the risk element from the exporter’s standpoint is relatively low or the importer is in a stronger bargaining position.
Irrevocable Letters of Credit- The reverse of revocable letter of credit. The importer cannot cancel the credit without the agreement of the exporter.
Confirmed Letters of Credit- By confirming the credit, the domestic bank in the exporter’s country assumes liability for paying the exporter, should the foreign bank fail to do so.
Basically, the information contained in a letter of credit includes the following;
v The type of credit, i.e. revocable or irrevocable
v The name address of the exporter (beneficiary)
v The name and address of the importer (applicant)
v The amount of the credit in foreign currency
v A brief description of the goods concerned
v The deliver terms of the contract (FOB, C&F OR CIF), etc.
v Shipping details and instructions against which payment are to be made.
v The expiration date of the credit and the latest shipment date.
The exporter would submit documents to the corresponding bank named in the credit. This would be checked against the terms and conditions of the letter of credit. If the documents are perfectly in order with the terms of the credit, the issuing bank would be informed immediately and the documents will be forwarded to them by courier. But if the documents are not in order, the exporter will be notified for amendments, or will give the bank an indemnity letter to forward documents as they are.
Importing For Local Distribution
The following are the steps you should take if you are interested in importing any product for local distribution:
1. Source for international supplies of the desired product through Chambers of Commerce, trade and business groups, embassies, the Internet, among others.
2. Know the different names or common dealers in your product line both at home and abroad.
3. Choose your foreign suppliers carefully; find out their reliability in previous transactions.
4. Receive a quotation from the supplier for the product or a pro-forma invoice
5. Do a detailed cost ad profitability analysis to ensure that the import business is profitable in terms of final products to be distributed or commodities to be produced for sale.
6. Make an order to the supplier for the product.
7. Inform your bank of the importation and open a letter of credit in favor of the exporter.
8. Receive the shipping documents through your bank.
9. Make payment for goods and receive the goods at the port.
10. Make use of reliable clearing agents for clearing from Customs at the ports.
As an importer, you need to keep abreast of current market trends in the products you deal in.
Import Regulations
As mentioned earlier, it is difficult for a country to make and enforce import regulations because of existing trade agreements between nations. Trade is usually regulated through tariffs rather than outright embargo on imported items. The import prohibition list below represents the Nigeria government’s attempt at regulating imports and encouraging the growth of local industries. Their corresponding Customs Tariff Numbers are include:
Import Prohibition List
Product Customs Code Number
1. Maize (1005, 1000- 1005,9000)
2. Sorghum (1007,0000)
3. Millet (1008,2000)
4. Wheat Flour (1101.0000)
5. Vegetable oils, (excluding linseed
and castor oils used as industrial
raw materials) (1515-1100, 1515.1900 and 151, 3000)
6. Barytes and bentonites (2511-100=2511. 2000. 2508. 1100)
7. Gypsum (2520.1000)
8. Mosquito repellent coils (2803. 1110)
9. Domestic articles and ware made
of plastic materials, (excluding
babies’ feeding bottles) (392.1000-3922.100-39.229000)
10. Rethreaded/used tires (4012.1000-4012.9009)
11. Gaming machines (9504.1000-9504.3000)
12. Frozen chicken
13. Vehicles above 10 years.
Importing & Exporting Via The Internet
The Internet revolution, which includes the use of Internet to drive e-Commerce, is fast changing the traditional ways that companies do business around the world. It is on record that over 25 million companies currently have a presence on the world-wide-web and more than 200 million people from over 100 countries are online right now. Imagine such a virtual marketplace operating 24 hours a day. 356 days a year and servicing potential millions of customers worldwide. The opportunities and the possibilities are endless- the Internet is just such a marketplace.
Last year, e-business statistics showed that over US$5 billion worth of goods services were sold on the Internet with less than 12% in marketing costs compared to alternative methods of marketing. In spite of such advantages, millions of companies in Africa are ye to go online. At the current rate, experts have warned that within the next few years, companies and organization that cannot trade on the web will be left behind. The old traditions are dying fast, the Internet revolution is taking over; the message is loud and clear; trade on the web or risk becoming obsolete. The business of the future are the business without frontiers.
Though there appears to be some risk of security and lack of confidentiality in transactions, various organizations and government are working on the issues of financial security of transacting business on the Internet. Some websites now have security features that ensure your personal information is not picked up by third parties.
It is now possible for you to set-up a website to promote and market your products worldwide at a very reasonable cost. There are some Internet services provider (ISP) that will even offer you a free web page advertisement for up to three months trial period. If you are satisfied with the result, you can then start paying, otherwise, you can discontinue use without any obligations to the service provider.
Certainly, you should consider using a website to promote your exports sometime in the near future.
USEFUL WEBSITES FOR INTERNATIONAL TRADERS.
The following websites contain useful trade information for importers and exporters;
www.e4cargo.com- this site provides an independent marketplace between shippers and carriers in all modes of international transportation, such as ocean container break bulk, air and sea.
www.ita.doc.gov/td/ocg/assoc.html this is U.S consumer goods association’s trade site. It has complete listing of trade organizations, trade statistics, trade events, and more.
www.bankone.com/international you can initiate letters of credit and amendment applications and receive trade activity reports via this site. It is certainly, an interesting website worth watching for future developments, but we would not recommend it as a medium to process payment for Nigeria traders yet
http:/dir.yahoo.com/regional/contries if you need some information on a country but no idea where to start, this is a good place to begin. It has extensive links for each country divided into business, news, governments, etc.
www.silkroad21.com for free international trade links. If you want to import from or export to Korea, this is the site to visit.
www.freedict.com provides free dictionaries from English to many other languages. A similar site is: www.altavista.com/raslator for free translation software that can translate your outgoing and incoming letters from any language to English and from English to any language.
www.trade-directory.com fully searchable directory of export trade leads. Products and commodity categories include minerals, precious metals, textiles, agriculture, manufactured goods, machinery, electrical goods, and automotive components, building materials, rubber, chemicals, pharmaceuticals and household goods. International traders can advertise their products fro free on the site.
www.chinavista.com for international traders who to do business with China. Information featured includes China’s tariffs and non-tariff controls on import and exports, details of trade fairs and exhibitions, business news, economic reports, and travel information. You may post your own free “offer to sell” adverts onto a bulletin board on the site.
www.xe.net/ucc for universal currency converters that can convert any country’s into any other currency. Visitors to the site may subscribe to a free daily e-mail currency report and take advantage of many other exchange rate information services.
www.alibaba.com an online international business community. International traders may view thousands of buy, sell, and business co-operation message posted by business from more than 180 countries. You may also post your own free adverts or set up a web page including an online sample room.
www.tradepage.co.za/ South African businesses on the Internet, it contains the South African Industry. Trade & Commerce Directory of products, services, imports, imports, exports and business opportunities in South Africa.
www.gove.sg/ the national website of Singapore providing information on business, government, news and more.
www.newmalaysia.com/business the new Malaysia business channel. Contains a complete list of Malaysian companies including importers, importers, exporters and business opportunities in Malaysia.
www.egtrade.com/ Egyptian trading directory. It provides information on banks, hotels, insurance, export and import companies, and shipping.
www.latinlink.co.uk/ extensive source of Latin American business sources and opportunities including importers and exporters.
www.europages.com/ the European Business Directory providing a list of imports and exports companies.
There are lots of more websites that can help you grow your import/export business. For example, if you have a product of service to sell worldwide, you can buy a reliable list of 5,000 free advertising websites to advertise and sell your products free of charge on the Internet (e-mail: sunyprofits@yahoo.com for details) Some of these sites will give you a free full-page advertisement for up to three months!
The benefits of global advertising on the Internet are that you product sells itself 24 hours daily even while you are asleep. This is the best way to begin selling your products and services on the Internet instead of spending large amounts of money to set-up your own website. The difference is that when you set-up a website, you will need to wherever in the world some is searching for the type of products or services you deal in, your websites will automatically be displayed. Otherwise, your website will be unpopular or unknown and you may not sell anything. The benefit of using free advertising websites is that there are already connected to thousands of search engines worldwide. The sites are, therefore, very popular and browsed daily for products and services around the world. Best of all, it is free for anyone to try out before investing in building one’s own website.
CONCLUSION: THE COMMITMENT
Winning business from overseas requires skills and persistent work. And work, to produce financial results, needs to be thought through, planned and organized. The important economic decisions today are mainly made by executives- managers employed by companies who work within and through such business organizations. The entrepreneur- an individual operating independently for himself and by himself is only a part of the team. Organized business has become the entrepreneurial center of modern enterprises. The economic decisions it makes largely determine the direction and level of success of the company.
For every international trade company therefore, systematic, purposeful work on the economic tasks and decisions has to become a way of life. What these tasks are and how they might be organized has been the concern of this book.
In the modern business in which knowledge is the central resource, one man at the top cannot by himself assure success. As the business grows, more knowledgeable workers will be required whose contributions have impact on the overall financial results of the organization.
The knowledgeable workers in a business- whether executive, manager or individual professional contributor, has to impose on himself the executive’s four fold commitment.
1. A commitment to constantly update his knowledge and make it contribute to the economic performance and results of the organization.
2. A commitment to identify and concentrate resources on the few core products and services in which the business can excel and attain a leadership position.
3. A commitment to the systematic, purposeful and organized discharge of the economic tasks in the business.
4. A commitment finally, to succeed, to persist and never to quit in spite of difficulties.
The economic tasks of an import and export companies, if done purposefully, responsibly, with knowledge and forethought, can indeed, be very rewarding as, I hope, this book has conveyed.
E-mail your Comments to geniusstrikesluv@yahoo.com
APPENDIX 1: LIST OF GATT (now WTO) MEMBERS
Angola Germany New Zealand
Antigua & Barbuda Ghana Nicaragua
Argentina Guatemala Niger
Australia Guatemala Nigeria
Austria Guinea Norway
Bahrain Guinea Bissau Pakistan
Bangladesh Guyana Papua New Guinea
Barbados Haiti Paraguay
Belgium Honduras Peru
Belize Hong Kong Philippines
Benin Hungary Poland
Bolivia Iceland Portugal
Botswana India Qatar
Brazil Indonesia Romania
Brunei Darussalam Ireland Rwanda
Burkina Faso Israel Senegal
Burundi Italy Sierra Leone
Cameroon Jamaica Singapore
Canada Japan Slovak Republic
Central Africa Republic Kenya Slovenia
Chad Korea, Rep. Of Solomon Islands
Chile Kuwait South Africa
Colombia Lesotho Spain
Congo Liechtenstein Srilanka
Costa Rica Luxembourg St Kitts & Nevis
Cote d’Ivoire Macau St Lucia
Cuba Madagascar Surinam
Cyprus Malawi Swaziland
Czech Republic Malaysia Sweden
Remark Maldives Switzerland
Djibouti Mali Tanzania
Dominica Malta Thailand
Dominican Republic Mauritania Togo
Egypt Mauritius Trinidad & Tobago
Elsavador Mexico Tunisia
Fiji Morocco Turkey
Finland Mozambique Uganda
France Myanmar United Arab Emirates
Gabon Namibia United Kingdom
Gambia Netherlands USA
Uruguay
Venezuela
Yugoslavia
Zaire
Zambia
Zimbabwe.
APPENDIX 2:TRADE TERMS INCURRENT USE
Below is the list of some of the INCOTERMS in current use:
GROUP E Departure of goods
EXW EX works (named place)
GROUP F -Main Carriage Unpaired
FCA free carrier (named place)
FSA free alongside ship(Named Port Of Shipment)
FOB Free on Board(Named Port Of Shipment)
GROUP C -Main Carriage Paid
CFR Cost & Freight (Named Port of Destination)
CIF Cost Insurance & Freight (named Port Of Destination)
CPT Cost Paid (to named Destination)
CIP Carriage & Insurance Paid (Named Port of Destination)
GROUP D -Arrival of Goods
DAF Delivered At Front (Named Port)
DES Delivered Ex Ship (Named Port of Destination)
DEQ Delivered Ex Quay (Named Port of Destination)
DDP Delivered Duty Unpaid (Named Port of D estimation)
APPENDIX 3: INDIVIDUAL IN COTERMS EXPLAINED
EXW-Ex Works: This is the most favorable delivery term for the seller, as it means his only obligation is to make goods available at his premises. He has no responsibility for loading the goods into any vehicle. it is buyer who bears the full cost and risk involve in bringing the goods from there to the vend destination.
FCA- Free Carrier (Named point): This delivery term was design to meet murder needs relating to multimode transport. The seller of the goods has ''Roll -Off ''traffic on trailers and ferries- now extend to cover all types of transport. The seller of goods has fulfilled his obligation when he delivers the goods to the custody of the nominated Carrier a at a named point .The risk of lost or damage to the goods transfer from seller to buyer at that point.
FAS-Free Alongside Ship: Under FAS contract, the obligation of the seller are fulfill when the goods has been placed alongside the ship on the quay, or in lighter. This means the buyer will bear the cost and all risk of loss or damage the goods from that point .it differs from FOB in the latter, the buyer is required to clear the goods for export.
FOB-Free On Board "Here, the goods are placed on board a ship by the seller at the port of shipment in the sales contract. Risks are transferred from the seller to the buyer when the goods pass over the ship's rail port of loading.
CFR-Cost & Freight: Under this term, the seller must pay the cost and freight necessary to bring the goods to the named destination, but the risk of loss of, or any damage to, goods is transferred to the buyer when the goods pass the ship's rail at the port of shipment. Insurance fore the goods is the responsibility of the buyer.
CIF - Cost, Insurance & Freight: Basically, CIF is similar to CFR but the seller is required to arrange all the necessary insurance on behalf of the buyer, and it is he (seller), who will contract with the insurer and pay the premium.
CPT - Carriage Paid To (Named Destination): This means that the seller pays the freight for the carriage of the goods to the named destination. The risk of loss or damage to the goods transfers from the seller to the buyer when the goods are delivered into the custody of the first carrier.
CIP - carriage & Insurance Paid to (Named Destinations): This is the same as the above but with the seller having to obtain insurance (on behalf of the buyer) against the risk of loss or damage to the goods in transit. The seller will contract with the insurer and pays the insurance premium.
DAF - Delivered At Frontier (To Named place): Here, the seller's obligations are at an end when the goods have arrived at the frontier but before entering the customs process at the country named in the contract of sale. You would normally encounter this in connection with road or rail transport but this does not mean it's use is limited only to those methods as it can, in fact, be used with any mode of transport.
DEQ - Delivered Ex Quay: The seller will make the goods available to the buyer on the quay at whichever destination is named in the sales contract. The seller will bear the full risks involved in bringing the goods to the named port of destination and discharging the goods on the quay. The buyer then clears the goods for import and pays all applicable taxes.
DES - Delivered Ex Ship: This means the seller makes the goods available to the buyer on board the ship at the destination named in the sales contract, and it is the seller who has to bear the full cost and risk involved in bringing the goods there.
DDU - Delivered Duty Unpaid: The seller is required to pay all costs involve in delivering the goods to the buyer, with the exception of import duty, taxes and other official charges levied on importation.
DDP - Delivered Duty Paid: If ex-works represent minimum obligation of the seller, DDP (Buyer's Premises) takes us to the other extreme. Here is the seller's maximum obligation because he is required to pay all the charges incurred in delivering the goods to the buyer's premises. If the parties wish the seller to clear the goods from customs, but that some of the costs involved should be excluded (for example, value added tax or other similar taxes) then that should be made perfectly clear in the sales contract. A clause such as "Delivered duty paid exclusive of VAT and/or taxes" will suffice.
NEWS
1. Ekondo Micro-finance bank bagged the world bank proved industrial rating
2. The first inter states micro-finance bank to operates anywhere in the country is integrated micro-finance bank.
3. The micro-finance with ATM card. UBA micro-finance
APPLICATIONS ON MICROFINANCE
Micro-finance forum in Asia http/www.bwtp.org
Applied micro-finance institute
Region sub-saharan African
www.appliedmicro-financeinstitute.org
e-mail: info@microsave.org
www.microfinance.org
E-mail: editor@themirofinance.org
THE LIST OF WHERE YOU CAN GET LOANS WITHOUT COLLATERAL
Ten Top Banks with Zero Equity
Accion Bank Micro-Finance Ltd Freedom Micro-finance Bank
Fabac Centre 3, Ligali Ayorinde 445, agege moto road, Boland, Avenue Victoria Island, Lagos Oshodi, Lagos
Tel: +2341279325 Tel: 017916266
Fax: +23412719327 E-mail: freedommf@yahoo.com.uk
Web. www.accionmfb.com
Integrated Micro-finance Bank MFB Plc.
64, Aveniyi, jones avenue, Ikeja Lagos
Tel: 012716530-9
Fax: 2717392
Web. www.imfb-bank.com
Life Gate Micro-finance Bank
497 Ikorodu Road, Lagos
Tel: 017364698
Web. www.lifegatemfb.com
Crest micro-finance U
4305 femi Awolowo way
opp regional building okebola
Ibadan
Tel: 02871479
Web. www.crestmfb.com
Newlife micro-finance bank ltd
For Churches, Missions, Individual and Cooperates
Plot 342 lateef jakande road,
Ajidingbi, Ikeja Lagos.
Tel: 017744442, 017913856
Fax: 017913855, 018976177
Ramilowo bank Ltd
Aprinnite Area Saki Oyo State
Tel: 08027270345
E-mail: ranmilowomfb@yahoo.com
Citi serve micro-finance bank
368, Ikorodu road, Mary land
Lagos.
Tel: 012704371, 012798370, 012798371
Web. http://www.citiservemfbank.com
Camp bridge micro-finance bank
15A Oko Awo streel, Victoria Island
Lagos.
Tel: 234-1-279393926, 2342793928
Fax: 012793926
Web. www.gapbridgemfb.com
Disney treasure Club Nigeria
Tel: +23418926660, 08052906725
E-mail: info@ptcnigeria.org
MEDICAL EQUIPMET CONTACT ON IMPORT\
Nigeria Instrument shanghia Ltd
F15, No 2 shan road shanghan 200040, PR. China
Tel: +862162728646
E-mail: export@hf.healoo.com
Narang Medical Limited
Narang Tower, 46 community center, Naraina phase 1
New Delhi- 28 India
Tel: +911141495070
Fax. +911141495076
E-mail: net@narang.com
Hospital Assist Africa
Thonhill office park lekker road,
Midrand South Africa.
Tel: +11273158040
Fax: +11273158060
E-mail: keith@hospitalassist.co.za
Oil Services Company of Vietnam
Avo 02 le loi street
Tel: 84648293468
Fax: 84648290165
E-mail: huuliem@hcm.vnniu
Contact: Mr. Nguyea Huu liem
Commodities, wooden gifts.
Cashew Nut
Company Name: AGRICULTURAL PRODUCTS
ESPORT-IMPORT CO.NO.3
Email: agrexport-tphcm@hcm.vn
Office address: 27-28 Ton Duc. Thang, Dist.1,HCMC Vietnam
Tel -84-8-8298332 Fax: 84-8-8225877
Cashew Nut
Company Name: AGRICULTURAL PRODUCTSTUFF
EXPORT CO.HMC CITY
Email: agr-ckc@hmc.vnn.vn
Office address: 58 Vo van Tan, Dist. 3.HCMC-Vietnam
TEL:84-8-9303451
cashew Nut
3 Company Name CASHEW NUTS PROCESSING
EXPORT FACTORY
Office address:20\28National Highway 1,Linh Xuan Ward, Hochiminh-Vietnam
Tel:84-8-8225308 Fax :84-8-8297791
Cashew Nut
4 cmpany Name: TAY NINH CASHEW NUTS PROCESSSING ENTERPRISE
Email: imestan@hcm.vnn.vn
Office address: Tan being Town let, Tan bite Dst., Tay Ninh POVINCE Vietnam
Tel: 84-66-823999 Fax:84-66-827303
Cashew Nut
Company name: 30\4 TAY NINH IMPORT EXPORT &GENERAL TRADING CO.
Email tagimesco@hcm.vnn.vn
Office address 30 le loi, Ward 2, Tay ninth province-Vietnam
Tel: 84-66-822532
Fax: 84-66-822532.
