EXPORT MANUFACTURING- a strategic imperative for Nigeria.pptx

Manufacturing For Export.
A Strategic Imperative
6/15/2016
1
DA/ICAN 2016

Objectives
 Discuss the opportunities and economics of Export Manufacturing
 Explain the regulatory requirements for Export Manufacturing
 Identify the strategies for success and compliance
 Discuss the challenges and possible solutions
 Evaluate available incentives for Export Manufacturing
At the end of this presentation, participants will be able to:-
6/15/2016
2
DA/ICAN 2016

Contents
 Overview of Nigerian Export Manufacturing
 Opportunities in Export Manufacturing
 Incentives and Economic Benefits
 Managing the Challenges of Export Manufacturing
 Practical Strategies for Success and Compliance
 Best Practices – Using Resources Available for Exporters
 Case Study/Conclusions
6/15/2016
3
DA/ICAN 2016

4
What is
Hippopotomonstrosesquippedaliophobia
the fear of…………?
“fear of long words”
Phobia the fear of
something.

Participation
What you put in is what you get out
5
 "Tell me, I will forget.
 Show me, I may remember.
 Involve me, I will understand."
~Chinese Proverb

Contents
6/15/2016
6
DA/ICAN 2016

Overview of Nigerian Export
Manufacturing.
• Class Quiz
• Definitions
• Overview
6/15/2016
7
DA/ICAN 2016

TRUE OR FALSE!
• Economic growth =
Gross Domestic Product
(GDP) in one year
GDP = total amount of final
goods and services
produced in one year.
Higher GDP = Better the
quality of life
Human Capital = the
Value that humans
bring to the
marketplace
The more capital goods
a country has = the
more money they can
make!
The more entrepreneurs a
country has, the higher the
country’s GDP will be?
1
2
34
5
6
• TRUE
• TRUE
• TRUE
• TRUE
• TRUE
• TRUE

Capital Goods :-
All of the factories, machines, technologies, building
and Property needed by businesses to operate.
Every Investments in Capital Goods
impacts the Country GDP.
The More Capital Goods a Country has = The More
goods they can produce= the more money is
made.

Basic Definitions:
• What is an Export ?
 An export is a function of international trade whereby goods produced
in one country are shipped to another country for future sale or trade.
6/15/2016
10
 The ability to export goods helps an economy to grow by selling
more overall goods and services.
 The sale of such goods adds to the producing nation's gross output.
 Exports are one of the oldest forms of economic transfer, and occur
on a large scale between nations that have fewer restrictions on trade,
such as tariffs or subsidies.

Basic Definitions:
• What is Manufacturing?
 Any Operation that uses components, parts or raw materials to
make a finished good. These finished goods can be sold directly
to consumers or to other manufacturing businesses that use them
for making a different product.
6/15/2016
11
DA/ICAN 2016
 Manufacturing businesses in today's world are normally
comprised of machines, robots, computers and humans that
all work in a specific manner to create a product.
 Manufacturing plants often use an assembly line, which is a
process where a product is put together in sequence from one
work station to the next. By moving the product down a production
line.

Basic Definitions:
• Export Manufacturing?
 Is the production of Goods for Export to earn Value for the
Economy of a nation.
6/15/2016
12
DA/ICAN 2016
 Using majorly, locally sourced resources./ (Gift of Nature)
 Resources described in 5M’s mainly as:
 Materials
 Value’s are described in
 Manpower
 Money
 Machines
 Methods.
 Gross outputs/GDP

Basic Definitions:
• Gift of Nature?
6/15/2016
13
DA/ICAN 2016
 Natural Resources important to Country
 This Resources are transformed to produce
Goods and services at cheaper cost.
 Countries with more resources can trade them
with other country to make more money for the
economy

Nigeria's Gift of Nature?
6/15/2016
14
DA/ICAN 2016
Cement production
Limestones- Ogun state has the largest
deposit, others are Kogi state, Edo
state, Cross River state Enugu state and
Ashaka in Gombe state
Tomato production
Kano, Jigawa, Katsina,
Zamfara, Sokoto, Kaduna,
Bauchi, Gombe, Taraba.

Nigeria's Gift of Nature?15
Oil Palm production
The main oil palm producing states
are: Cross River, Akwa Ibom, Ekiti,
Delta, Bayelsa, Ogun, Rivers,
Anambra, Ondo, Enugu, Imo, Oyo,
Abia, Edo, Ogun, with Cross River,
Delta, Ondo and Edo
Highest producing states in the country
are : Ondo, Osun, Cross River, Ekiti,
Oyo, Edo, Ogun
Cocoa production

Nigeria's Gift of Nature?16
Bitumen / Oil Sand reserves
Bitumen deposits are found
in Lagos State, Ogun State,
Ondo State, and Edo State.
Groundnut production
Niger, Kano, Jigawa,
Zamfara,Kebbi, Sokoto,
Katsina, Kaduna, Adamawa,
Yobe, Borno, Taraba, Plateau,
Nasarawa, Bauchi, and
Gombe States

Basic Definitions:
A company which apart from manufacturing certain
products is also exporting the product.
This company might sell the same product for local
consumption but also sells the same in other
countries too for profit.
Examples: Dangote , Unilever, 7UP, PZ etc.
• Manufacturing Exporter ?
6/15/2016
17
DA/ICAN 2016

Facts : Nigeria’s non-oil export up by 50% –
NEPC
Product FOB Value
1. Cocoa & Cocoa Preparations $417,900,987
2. Processed Leather $333,011,697
3. Rubber $143,871,586
4. Cashew Nuts & Edible Fruits $55,363,190
5. Plastics, Polybags $53,491,233
6. Sesame Seeds & Oil $104,054,165
7. Aluminum & Articles $64,022,090
8. Sea Foods $48,141,669
9. Cotton Yarns & Woven Fabrics $31,754,740
10. Gum Arabic $37,154,951
11. Others $539,934,012
 Nigeria earned a staggering $3 Billion from
non-oil exports in 2011. About N468 Billion.
6/15/2016
18
DA/ICAN 2016

Facts: NBS Reported - 2015 Wasn't Bad for
Manufacturers
 Sector contributed N8.97 trillion to the nation's economy in 2015,
 Up by N28 billion compared to the N8.69 trillion in in 2014 (GDP).
6/15/2016
19
DA/ICAN 2016
Oil refining dropped N248.02B in 2015 vs N385.82B in 2014.
Cement production N749.93B in 2015 vs N604.61B in 2014.
Food, beverages and tobacco N4.29 trillion in 2015 vs N4.24 trillion in 2014.
Textile, apparel, and footwear N1.87 trillion in 2015 vs N1.82 trillion in 2014.

Facts:
• Nigeria Manufacturing Activities ..!
Have significant impact on the economy of a nation.
Accounts for a substantial proportion of total economic activities.
Accounts for about 10% of the national GDP annually
Creates employment about 12% of the labour force in the formal sector of
the nation’s economy. 6/15/2016
20
DA/ICAN 2016

Export Manufacturing – A strategic Imperative?
The ‘zero oil’ plan and
an export revolution
6/15/2016
21
DA/ICAN 2016
The Nigerian Case.!

Nigerian Case Story - An export revolution and the Zero Oil Plan.
• Oil is down! Pressure on the Naira! Slowing growth! What will Nigeria’s response be?
• This is the chatter all across the country on shop floors, in markets, within business
circles, and in classrooms.
• A close look reveals we may be focusing on the symptoms and not the cause.
• Nigeria does not have an oil price problem, Nigeria has a “failure to export” problem!
• We have little control over the ups and downs in global crude oil markets
• What we do control however is what Nigeria chooses to export, and where we choose to
make money internationally.
Export Manufacturing – A strategic Imperative?
6/15/2016
22
DA/ICAN 2016

“Nigeria must begin to behave as if we have no more oil”. –PMB 2015
• Hence the need for a Zero Oil economic agenda, essential to build a strong Nigerian
economy for the future.
• For years Nigeria has imported thousands of goods worth over US$50 billion a year,
which we pay for mainly with crude oil proceeds of over US$70 billion each year.
• In the past two years crude oil prices have fallen 60% and Nigeria’s earnings have
likewise fallen by at least US$35 billion, inevitably leaving a financial hole in the
economy.
Export Manufacturing – A strategic Need?
6/15/2016
23
DA/ICAN 2016

• The pressing question now is how to fill this funding gap- and the answer is simple:
• Nigeria must find new things to export quickly, in large commercial scale.
 If Nigeria broadens and grows its export basket, a positive chain reaction ricochets throughout
the economy.
 The logic follows – when you grow exports, national output (agriculture, industry, solid
minerals) will also grow; local businesses will grow; supporting infrastructure will expand; and
jobs and investments will definitely follow.
 The overall macro impacts result in growing foreign reserves (from export forex) and a more
resilient economy is assured.
6/15/2016
24
DA/ICAN 2016

• Our country for decades has primarily exported one product, crude oil, which really is
a perishing asset.
• It is for this reason that the government prioritizes Nigeria’s economic diversification.
• – the Zero Oil plan.
• What else could we export? Who would buy? How much could we make?
• These are the questions to be answered under any roadmap to change this
age-old dependence on one single export commodity.
6/15/2016
25
DA/ICAN 2016

Export Manufacturing:
- How are we focusing local efforts with
Industrialization.?
The NIRP is promoting Nigeria's industrialization:
Focusing on labor intensive low and medium technology manufacturing
Building up core base industries that are essential for advanced industries.
Using the large Nigerian market demand to deepen industrial capacity of local
firms.
 Strategically using key manufacturing sectors as technology drivers of the
economy 6/15/2016
26
DA/ICAN 2016

6/15/2016DA/ICAN 2016
27 #Budget 2016- Current Nigeria Plan

Exporting- What are the Basic Requirement.?
1. Registered Business name and Office
2. Registration with the NEXP
3. Registration of Form NXP
4. Special licenses and permits-Local
5. Licenses from target foreign country
6. Tax certificates
7. Insurance covers 6/15/2016
28
DA/ICAN 2016

6/15/2016DA/ICAN 2016
29
“The best way to predict the future is to
invent it.”
- Alan Kay, father of the personal computer

6/15/2016DA/ICAN 2016
30
- Vince Lombardi
“Dictionary is the only place
that success comes before
work.”
Where Can you find success
before work.????

Contents
 Best Practices – Using Resources Available for
Exporters
 Case Study/Conclusions 6/15/2016
31
DA/ICAN 2016

6/15/2016DA/ICAN 2016
32
Men cannot not live by exchanging articles, but
producing them. They live by work not trade.
- John Ruskin
 WEF- Productivity and Prosperity Report
SWOT
SECTORIAL OPPORTUNITY
CURRENT FOCUS
HOME MADE CONSUMPTIONS
Opportunities in Export Manufacturing:

Global Competitiveness Index:
Top 9 in Africa
9243
58
71 99
96
Tunisia
South Africa
Ivory Coast Kenya
Rwanda
Botswana
Morroco
Algeria Zambia
91
72
87

Global Competitiveness.
- the 10 Golden Rules..!
Provide a stable and
predictable legislative
environment
Maintain linkage between wage
levels and productivity
Create a flexible and
resilient economic
structure
Ensure quality, speed and
transparency of governance
Make investments in traditional
and technological infrastructure
Make the country an attractive
place for Foreign Direct
Investment
Encourage private savings
and domestic investment
Make the country an
aggressive exporter
34
Invest heavily in
education and regular
training of workforce.
Maintain a balance
between local and
global activities.
Source:www.imd.ch

35
•Abundant raw materials , ~ 44 solid minerals in commercial quantity
•Large market, ~ 170m,
 7th most populated in the world , /#4 by 2050,
 USD100bn consumer spend pa
•Strategic location (Gulf of Guinea)
•Abundant labour, ~ 69m, largest in Africa
•International /regional political clout
Opportunities in Export Manufacturing: Analysis
 Current STRENGTHS
6/15/2016DA/ICAN 2016

36
•Infrastructure deficit/high cost of doing business
•High interest rates/ cost of capital
•Policy inconsistency
•Few/No institutions to drive industrialization
•Low industrial skills and innovation
•Low consumer purchasing power
•Low patronage of ‘Made in Nigeria’ goods
Opportunities in Export Manufacturing: Analysis
 Current WEAKNESSES
6/15/2016DA/ICAN 2016

37
•Potential to be #1 in Africa
•Build up labour-intensive sectors.
•Produce locally for domestic consumer market
•Become the manufacturing hub for Ecowas & Africa
•Attraction of Investments
•Diversified Exports
Opportunities in Export Manufacturing:Analysis
 Current OPPORTUNITIES
6/15/2016DA/ICAN 2016

38 Opportunities in Export Manufacturing: Analysis
 Current THREATS
•Recent large oil/gas discoveries globally
•Increased competition on industrialization
•Trends in trade policies – globalization & regionalization
•Insecurity
6/15/2016DA/ICAN 2016

Agriculture
 Agro Allied
 Agro Processing
 Raw materials
Processed and Packed Foods
 Live stocks
 Beverages
 Food and Drugs
Metals and Solid Minerals
 Iron ore
 Coal
 Bitumen
Petro Chemicals( oil and Gas Related.)
Light Manufacturing and Constructions
We abandoned agriculture, for petroleum;
Now, we have to go back – Buhari
6/15/2016
39
DA/ICAN 2016

Development and Growth Opportunity
 Micro/Small/Medium Enterprise.
Nigeria Current Focus
 Solid minerals
 Agriculture.
NEPC Researched and confirmed Nigeria has
Over 5000 Exportable Products.
6/15/2016
40
DA/ICAN 2016

Nigeria Focus- Solid minerals and Agriculture.
 Nigeria can generate N5trn annually from solid minerals
— Ass of Metal exporters/ Vangaurd News 2016
 Nigeria’s global agriculture exports could take-off at a rate
similar to Brazil’s, with $59 billion in export revenues by 2030.
- PwC report.
 If we take agriculture seriously and deliberately build our
capacity in production, processing and marketing of
agricultural products, we can generate and earn $40bn
annually as revenue.”
-Experts
We abandoned agriculture, for petroleum;
Now, we have to go back – Buhari
6/15/2016
41
DA/ICAN 2016

 Nigeria exports primarily crude oil and gas.
Importing value-added petroleum based
products.
Therefore, enormous opportunities exist for the Oil &
Gas sector Export Manufacturing. Investing heavily in
Petrochemicals, Methanol, Fertilizers, Refineries, and
other Gas based processing activities is Imperative.
Nigeria Oil and Gas.
6/15/2016
42
DA/ICAN 2016

Will you buy
Made in Nigeria Goods?
6/15/2016
43
DA/ICAN 2016

#Charity Begins @ Home…!
Do we want made in Nigerian Goods.?
NOI recent public poll suggest YES…!
About 97 per cent of Nigerians
have said they would buy locally
made products in order to
strengthen the country's
economy.
6/15/2016
44
DA/ICAN 2016

NOI recent public poll suggest YES…!
6/15/2016
45
DA/ICAN 2016

In conclusion,
 This poll has clearly revealed some cheering findings indicating the willingness of
Nigerians to buy made in Nigeria products.
 Economic climate for local manufacturers needs focused Improvements.
 Power and support Infrastructures.
 Limited access to credit
 High cost of funds.
 However, with concerted efforts on policies targeted towards the power sector,
access to finance and currency stability, the manufacturing sector may be able to
bounce back from the woods.
6/15/2016
46
DA/ICAN 2016

Contents
Exporters
48
DA/ICAN 2016

What are the Incentives and Economic Benefits
of Exporting Nigerian Manufactured Goods.?
Macro Economic Goals.
Employment Generations
Infrastructural Expansion and development
Technology Development
Tax Incentives
Export grants ie Export Expansion Grant
6/15/2016
49
DA/ICAN 2016

Export Expansion Grant:
 Created to complement export promotion drive.
 Supported by an ACT of Law since 1986. -Export Incentives and Miscellaneous
Provisions Act detailed as
•Export Development Fund
•Export Expansion Grant
•Export Adjustment Scheme Fund
 Export Expansion Grant (EEG) is still Operational and administered by the Nigerian
Customs Service (NCS).
 EEG is issued to non-oil exporters to reduce production, distribution and logistics
(Production) costs which will enable them compete effectively in the international
market.
6/15/2016
50
A/ICAN 2016

Export Expansion Grant:
 The grant ranges from 10 per cent to 30 per cent of the Freight On Board value of the
products being exported with a confirmation that the export proceeds have been
repatriated.
 The amount received by the exporter also depends on the categorization of the
exporter among others.
 EEG was paid to beneficiaries in cash.
 From 1999, the grant came in form of Negotiable Duty Credit Certificates (NDCCs)
issued by the NCS.
 The NDCC is a negotiable instrument that can be used to settle or reduce import and
Excise Duties. 6/15/2016
51
DA/ICAN 2016

Contents
Exporters
52
DA/ICAN 2016

The Challenges of Export Manufacturing
Includes:
 Capital
 High cost of fund
 Lack of long term facility
 Government Policy.
 Enabling Environment
 Investment Promotions and Incentives
 Product Standards and Local Patronage.
 Processing and Packaging
 Safety and Quality standards.
6/15/2016
53
DA/ICAN 2016

 Skills and Technology
 Industrial Skills
 Machinery and Technology acquisitions and exploits
 Infrastructural Deficit
 Power, Power and Power.
 Transport- Rail, Road and Sea.
 Export Rules and Regulations
 Business rules and regulations
 Legal requirements
The Challenges of Export Manufacturing
Includes:
6/15/2016
54
DA/ICAN 2016

Contents
6/15/2016
55
DA/ICAN 2016

Export Manufacturing- Practical Strategies
for Success and Compliance
Establish Manufacturing Centers
• Focus Small-Medium-Large Industries
• Focus on simple to complex products
• Satisfy local markets before others.
• Exploit Export processing platforms.
6/15/2016
56
DA/ICAN 2016

Exploit Trade Shows and Manufacturers forums
• Platform to brings together All stake holders
• Producers platforms for best practice and common
challenges.
Expand Research and Focus Product Presentations
• Designs and Packaging
• Safety and Quality Standards
6/15/2016
57
DA/ICAN 2016

Exploit and Follow Governance Requirements.
• Export Documentations and Regulatory compliance (eg SON)
• Export Promotions
Explore and Exploit Globalizations and Technology
• Adopt Global Best practices
• Use and Exploit Technology
• Deploy Representations and administrations in Foreign markets.
• Education, Research and Training for Highly Skilled Labor
6/15/2016
58
DA/ICAN 2016

The SON Certifications:
Before a product is certified for local consumption or for export, it is
required that such product should pass through what we call
 Mandatory Conformity Assessment Programm, MANCAP (Local
product),
 Standard Organization of Nigeria Conformity Assessment
Programm, SONCAP, (Importing and Exporting standards).”
To assure credibility and values for
acceptance in the global market
6/15/2016
59
DA/ICAN 2016

The SON Certifications
 The Conformity exercise combines document verification, sample collection for lab
analysis, and physical inspection to assess the conformity of each shipment. If
conformity is established, a mandatory Certificate of Conformity (COC)
 The certificate prevents the shipment from being rejected and allows importers to
clear their goods efficiently.
To assure credibility and values for
acceptance in the global market
6/15/2016
60
DA/ICAN 2016

The SON Certifications
Conformity assessment programs provide
numerous advantages for both Governments as
well as exporters and importers.
 For Governments
Eliminates customs bottlenecks in importing country
 Reduces storage issues at ports
 Guarantees all imported products are compliant with international & local standards
 Reinforces consumer safety
 Builds local customs competencies through training and capacity building programs
 Ensures conformity with WTO Technical Barriers to Trade agreement
 For Exporters / Importers
Faster Customs clearance
•Reduces need for local laboratory analysis or additional testing
•Offers better consumer protection against dangerous, substandard or counterfeit products
•Protects local industry from unfair competition due to poor quality imports
6/15/2016
61
DA/ICAN 2016

Contents
6/15/2016
62
DA/ICAN 2016

Best Practices – Using Resources Available for
Exporters-On hand help from NEPC
1. Provide a list of Exportable Products
2. Provides technical support to exporters in the following areas
•Ensure proper documentation of export transactions
•Business Registration and inclusion in data base.
•Quality and Standards- monitors the quality and standards of products.
•Payment-: helps suggest the best and most secure payment methods.
•3. Organize Trade Fairs and Exhibitions
.
6/15/2016
63
DA/ICAN 2016

Exporters- On hand help from NEPC
4. Bring Exporters together
5. Provides information on product sourcing
- information on where to find exportable products in Nigeria.
6. Administer Grants and Incentives
- Registered Exporters can easily access grants
-Exporters of agricultural products receive a lot of incentives regularly.
7. Help to simplify the export procedure
- Mostly for starters.
.
6/15/2016
64
DA/ICAN 2016

Exporters- On hand help from NEPC
.8. Carry out research and studies
- regular studies and research.
9. Help to solve problems
-go-to agency for complaints and solutions.
10. Create awareness and publicity
- local and international advertisements.
11. Provide Financial Support
- useful information on where to get loans easily.
-May also give guarantee on loans. 6/15/2016
65
DA/ICAN 2016

Contents
6/15/2016
66
DA/ICAN 2016

The Ghana Case Of Cocoa
The cocoa industry has been the mainstay of the Ghanaian economy and provides the second
largest source of export earnings representing about 30 percent of Ghana's total export earnings.
Ghana is presently the world’s second largest producer of cocoa beans, after the Ivory Coast.
According to the Bank of Ghana, cocoa bean and products export receipts for the first quarter of
2011 is $859.4 million, accounting for about 61 percent of total export earnings as compared with
$682.5 million at 48.8percent in 2010.
Source: Annual Cocoa Report 2012.
6/15/2016
67
DA/ICAN 2016

Manufacturing will remain the strongest
differential when countries are rated on their
competitiveness.
Trend In Global Manufacturing.
“Manufacturing competitiveness, increasingly propelled by advanced
technologies, is converging the digital and physical worlds, within and beyond
the factory to both customers and suppliers, creating a highly responsive,
innovative, and competitive global manufacturing landscape,”
--Craig Giffi, Deloitte US Consumer & Industrial Products Industry group
6/15/2016
68
DA/ICAN 2016

 The Manufacturing sector contributes over 17% of the world’s US$ 70 tr
economy, & accounts for over 70% of global trade.
 Poor countries start off by employing the bulk of their population in agric.
 To transition into middle income/developed markets, there is need to
create a robust industrial & services sectors, which are the drivers of
mass employment, improved skills, & better wages, providing the
foundations for long run sustainable economic growth & advancement
 Increasingly the manufacturing sector drives the creation of service sector
jobs. In advanced markets, 30% to 55% of service jobs are related to the
manufacturing sector. 6/15/2016
69
DA/ICAN 2016

The 2016 Global Manufacturing Competitiveness Index forecasts that the top eleven countries
will remain consistent between now and 2020, with some exchange of rankings.
6/15/2016
70
DA/ICAN 2016

Summing Up:
Strategically, Export Manufacturing has more sustainable
Potential to Grow the Nations Economy.
Grow and Sustain the nations GDP
Create sustainable Employments
Create relative Currency Strength(Value).
Foster Developed Infrastructure.
Stop Rural –Urban Migration and create even development
Foster Human Capital Development to match needs
Promote acquisition and expansion of Skills and Technology
FocusingonExportManufacturing
willCreateIndustries……!
6/15/2016
71
DA/ICAN 2016

Summing Up:
Strategically, Export Manufacturing has more sustainable
Potential to Grow the Nations Economy.
Industry Multiplies Nations
6/15/2016
72
DA/ICAN 2016

73
What..When..Why..?#WWW??
“If you’re not confused, you’re not paying attention.”
-Tom Peters

END:
Thank You.
Engr Dele Abioye MNSE
6/15/2016
74
DA/ICAN 2016

Data and References Acknowledgements.
 NEXIM- Nigerian Import and Export Bank
 BOI- Bank Of Industry
 SON- Standard Organizations of Nigeria.
 MAN- Manufacturing Associations of Nigeria.
 NAFDAC-National Food and Drug Admin. Control
 NEPC-Nigerian Export Promotion Council
 NBS- Nigerian Bureau of Statistics.
 NIRP- Nigerian Industrial Revolution Plan
6/15/2016
75
DA/ICAN 2016

EXPORT MANUFACTURING- a strategic imperative for Nigeria.pptx

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie EXPORT MANUFACTURING- a strategic imperative for Nigeria.pptx

Ähnlich wie EXPORT MANUFACTURING- a strategic imperative for Nigeria.pptx (20)

EXPORT MANUFACTURING- a strategic imperative for Nigeria.pptx