Worried by the increasing volume of non-oil export in the informal sector, the Chief Executive Officer of the Nigerian Export Promotion Council (NEPC), Mr. Olusegun Awolowo has enjoined players in the informal export trade to embrace formal export which would be beneficial to the national economy and bring development to border communities.
Awolowo, made this appeal at the Stakeholders’ sensitisation program for non-oil informal cross border traders along the Seme and Okerete International Border Markets held in Saki, Oyo State on Thursday.
Represented by an officer of the Council, Mr. Olu Ikulajolu, Awolowo said, informal export out of Nigeria on a daily basis is an hindrance to the Nigerian economy because such trades are not documented and the government makes no earning from the high volume of trade.
“When there is no record of exports, there would be no proof of origin of the goods being moved across the borders, some laws would be contravened and the economy would be hindered,” he said.
Addressing exporters at the event, Awolowo said, “We have just three months to the commencement of the African intercontinental Free Trade Agreement which Nigeria is a signatory to and if we don’t formalise our export, we may be at the receiving end.”
He also said the NEPC has put in place arrangements for non-oil exporters to transact their businesses with ease once they acquire the necessary documents.
Talking about the various programs of the NEPC, Awolowo said, “NEPC has made different arrangements on how non-oil exporters can benefit from the government’s efforts. We have noticed that women are more in the informal sector and because of this, we have put a program down called ‘She Trade’ to benefit them.
“We also have the Youths Export Development Programme for the youths because they too are part of the informal cross border trade.”
Speaking further, Ikulajolu mentioned that, the Council has put in place a program called Zero-To-Export to educate people on formal export from Nigeria.
“Our Zero-To-Export program is for those who have no knowledge on how formal export operates. Zero-To-Export gives you training for about two to six months on all you need to know at different stages. It is a gradual process for you to understand formal export,” he enlightened.
He however told participants to embrace formal trade in order to escape the myriads of challenges and danger traders expose themselves to on informal cross border exports.
“The challenges of informal trade are more than those in the formal export. Once you have your documents and you are doing formal export, no border agent can harass you but when you don’t have any document to back up your business, you expose yourself to risks,” he said.
In his presentation, main facilitator at the event, Barrister Kola Awe highlighted the benefits of formal trade and disadvantages of informal export business.
According to Awe, CEO of XPT Logistics Limited, informal export comes with a lot of losses. “Those doing informal exports are the ones losing; they lose a lot because there is no bank that wants to give them loan. This is because all the trading they are doing informally have no record. If you do formal trading, the Federal Government has what we call export expansion grant that covers for your inconveniences including bad roads and other inconveniences you face while doing your formal export.
“Once you register with the NEPC as an exporter with N13,500 it will save you from a lot of problems from the Nigerian Customs, the Immigration and the Police. But when you don’t have the necessary documents, even border touts and those who are not supposed to ask you questions will extort you because they know you don’t have necessary documents.”
The consultant however noted that many exporters are in informal export because they don’t want to pay tax to the government. They do so also because of the ignorance of what they stand to benefit while transacting their business formally.
“A lot of things scare us, some people don’t want to register their companies because of tax, there is now ease of doing business, companies that don’t have turnover of N25m do not need to pay some taxes. Informal trade is risky and not good for the economy,” he said.
The Barrister however told participants who are from border communities where cross border exports take place about the benefit of formal export to their communities.
“According to records, 90 percent of trades in Saki, Nikki, Chikanda, Yaskira are informal trade. These communities are underdeveloped today because of informal export trade. If their trades are documented and the country makes money, that is when the government will be forced to develop these places.
“I want to admonish us all the informal trade we are doing are not bringing revenue to the government this is what is giving us setback as far as development is concerned. Selfishness is what is causing setbacks; it is time to do formal export.”
He however noted that even big companies are culpable in the informal export trade. “It is not only individual traders, small companies, or youths doing informal exports, big companies are also doing it,” he said, concluding that, “If we stop it, things will change because informal trade has caused a lot of havoc to the Nigeria economy.
Another facilitator at the event, Alhaji Nasir Salami noted the strategic location of Saki/Okerete border corridor and the need for government presence in the area in terms of development.
According to Salami who noted that the Saki/Okerete cross border trade route had existed since 1800 but lacks adequate development, the development of the area will bring more revenue to the Federal Government.
“The majority of the people in the area earn their living from informal trade/smuggling and are ready to formalise their trading activities if the government can provide the necessary amenities and reduce the number of check points along the axis,” Salami said.
Also at the event, Oyo State Commissioner for Trade and Investment, Hon. Adebisi Adeniyi highlighted efforts of the state in developing communities along the Saki/Okerete border communities.
According to Adeniyi who was represented by Mr. Yinka AbdulRaheem at the event, the majority of the exportable products from Oyo State are found from Saki area hence the need to develop the area.
At the end of the program, as part of NEPC’s commitment to formalise trade in the Saki and Seme export axis, the organisation presented data books, laptops and motorcycles to ease operations of the various cross border trade associations.
Also at the event were the Trade Promotion Advisor, NEPC Ibadan Export Assistance Office, Mrs. Bolanle Emmanuel, the Olokerete of Okerete, Alhaji Bashiru Adekunle, Mr. James A. Atilola, representative of the Shippers Council and members of Saki City Chambers of Commerce.