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‘Enhancing competitiveness of Nigerian exporters is our commitment’

Mohammed Balarabe is the Deputy Managing Director (DMD) of Fidelity Bank Plc
Mohammed Balarabe is the Deputy Managing Director (DMD) of Fidelity Bank Plc

Mohammed Balarabe is the Deputy Managing Director (DMD) of Fidelity Bank Plc. In this interview, he identifies fresh business opportunities for Small and Medium-scale Enterprises (SMEs) in the non-oil export space.

What is Export Management Programme (EMP)?

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EMP is a strategic collaborative capacity development initiative between Fidelity Bank, Lagos Business School (LBS) and the Nigeria Export Promotion Council (NEPC). The strategic objective of the programme is to help Nigerian exporters build business management capacity to become more competitive in the global marketplace.

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The programme is in its third year and going on its eight stream, and has graduated over 400 people who have transitioned from base level export experience to becoming established exporters.

In Lagos, EMP is run in the LBS facility along Lekki-Epe Expressway. The programme is directed and managed by one of the key LBS faculty members. For the first time, we are taking the EMP outside Lagos. The eight edition of EMP (EMP 8) is scheduled to hold in Kano from 15th -19th July, 2019, at the Grand Central Hotel.

Why Kano?

Our choice of Kano for the EMP 8 was borne out of market concentration and needs consideration. Kano is the hub of agro commodity exports in Nigeria. Some of these transactions are done informally. There’s need to mainstream this class of exporters to the formal export space for the incremental benefits and upsides it presents to them. These benefits include access to the export expansion grant scheme, financing opportunities and enhanced market penetration opportunities.

There are also plans in the very near future to take EMP to other parts of Nigeria where there are critical mass market opportunities for non-oil exports. We are contemplating the following locations in that regard. Abuja; for its proximity to key export commodity producing areas in the North Central: agro commodities in Kaduna and Benue, and solid minerals in Jos. Benin, for its proximity to key natural rubber producing belts in Nigeria and its positioning as the hub of oil palm productions in Nigeria. Enugu, for its centrality to the key export commodity producing areas in the South East: solid minerals and agro commodities in Ebonyi State, shoe and leather goods in Aba and manufactured goods in Nnewi and Onitsha.

Why is Fidelity Bank so interested in the non-oil export space?

Nigeria’s economy is hyper sensitive to shifts and movements in crude oil prices primarily because of the complexion of our trade profile which is heavily skewed towards crude oil exports; a commodity with pricing drivers and consumption levers outside our control.

Our Gross Domestic Product (GDP) is composed of three key variables: consumer spending, government spending and balance of trade. The peculiar thing about the Nigerian economy is that because our balance of trade is driven by oil exports which account for over 90 per cent of our export receipts, a dip in crude oil prices does not only affect the balance of trade component of the GDP, it also affects the other variable components of the GDP and the macro and micro elements, example, exchange rate. This is because we are largely an import-dependent economy. Government spending because oil revenues account for over 60 per cent of our national income, and what you and I spend and general output because of the chain effects of the macro elements.

The way to fix this problem is to grow non-oil exports, not just to expand balance of trade, but to also create a bluffer for oil price shocks. And the way to do this is not by exporting more primary commodities but by adding more value to what we export. Having provided this context, it is clear that we need to, as a matter of urgency, begin to prime our economy as if there were no revenues from crude oil and channel more efforts towards growing the non-oil sector. This is why we are very much interested in helping Nigerian exporters build capacity to be more competitive in the global marketplace.

What are some of the key subject areas covered by the programme?

The programme opens with an overview of Nigeria’s export market and subsequently sets up and leads the discussion to the critical subject areas, e.g. assessment of export knowledge gaps and intervening steps to reposition for export readiness, regulatory requirements for export businesses, market access, modeling and implementation of effective and de-risked product supply chain management systems for exports, modeling and implementation of effective financial management systems and processes, product packaging, branding and marketing, etc.

From this teaser, you can see that not only does the programme make one a better exporter, it also makes participants more bankable; which is why it is a most attend for anyone looking to get into the export business or scale existing capacity.

How has EMP added value to past participants?

Typically, what happens is that after the programme, the class members organise themselves into cooperatives along areas of common interest and pool funds together to undertake a test export transaction. Subsequent to this, most of them have gone on to do several export transactions and have developed extensive export market footprints. Some of the benefits and upsides include enhanced profit margins, exchange rate upside, e.g. more naira for their dollar receipts and stable source of Foreign Exchange (FOREX) to finance their own import transactions.

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