Questionable Cargoes Boost Manufactured Goods Exports By N909bn
Exports of locally manufactured goods went up as high as 839.44 per cent between second and third quarter of 2019, aided by what the National Bureau of Statistics classified as re-exported goods worth N909bn, which may have been transit cargo.
The value of manufactured goods exports increased by 839.44 per cent in the third quarter of 2019 when compared with the value recorded in Q2, and over 1,000 per cent when compared to Q3 2018.
This was the highest increase in the value of manufactured goods exports in the year under review.
The notable increase recorded was due to the re-exports of high value cable sheaths of iron as well as submersible drilling platforms, vessels and other floating structures, data from the National Bureau of Statistics showed.
A further breakdown of the data indicates that the value of manufactured goods trade in Q3 2019 stood at N3.8tn or 41.1 per cent of total trade.
Of this, the export component accounted for N996.8bn, an increase of 839.44 per cent over the value recorded in Q2 2019.
The increase, according to the NBS, was driven by exports of cable sheaths of iron and steel valued at N750.3bn to Ghana.
The NBS stated, “Another product that drove up manufactured export was floating and submersible drilling platforms also exported to Ghana and valued at N117.4bn.
“In addition, vessels and other floating structures for breaking up worth N41.7bn were exported to Cameroon.”
In a footnote following the data analysis, NBS defined re-export as “exports of foreign goods in the same state as previously imported.”
It added, “They are to be included in the country’s exports.
“It is recommended that they be recorded separately for analytical purposes.”
However, findings by our correspondent showed that Nigeria’s trade law does not permit export of goods in the same format they were imported into the country.
This was confirmed by the Nigeria Customs Service.
“You cannot import goods into Nigeria and re-export to another country without adding value to the import,” the spokesman, NCS, Mr Joseph Attah, told our correspondent.
He explained further that when goods are exported for home use, they cannot be re-exported, saying that in situations where people bring goods like machines and mobile platforms to use for exhibition purpose, they can obtain ‘temporary importation’ permit.
“The temporary import licence allows them to return the goods as soon as they have finished using the items,” he stated.
Goods that are mostly imported for temporary use include raised platforms used for musical concerts and other instruments of entertainment, he explained further.
On a visit to Apapa Port where the exports were conducted between July and September of 2019, our correspondent gathered that the goods could not have been imported and re-exported from Nigeria.
A source at the Apapa Command of the NCS, who pleaded anonymity because they had no authority to speak on the matter, argued that the goods were too heavy to qualify as imports that were later re-exported.
The source said it was against the law to re-export imports without adding value to them and that floating and submersible drilling platforms and vessels were items that could not be moved around for the purpose of adding value.
Our correspondent also got further clarification from a source at the NBS that the goods had no value addition.
This means that when analysed further, Nigeria’s real export for the third quarter of 2019 would be N996.8bn less N909bn (the ‘re-exported’ or transit component). Nigeria’s real export when calculated thus would be N87.8bn.
Reacting to the figure, the Director General, Lagos Chamber of Commerce and Industry, Mr Muda Yusuf, described as ‘misleading’ the addition of the re-exported goods to show that Nigeria’s local manufacturing export increased by 839.44 per cent in the third quarter of 2019.
He said, “Re-export as described in the NBS data is not valuable export. It is what we create from Nigeria and add value that should be regarded as Nigeria’s local export and therefore added to boost our overall export figure.”
Yusuf noted that the goods might have been on transit because some countries found it cheaper to route their cargo through Nigerian ports instead of sending them straight from the destination ports to their countries.
He attributed this to the value of the naira.
According to him, the currency is overvalued because the exchange rate has been stagnant for three years and inflation rate is going high.
“It means somebody is subsidising,” he said, adding, “It is likely that we have a strong currency, for imports to be cheaper and exports to be expensive.
“We need to check the legality of that because Customs say it is not legal to import something and then re-export it in the same format.”
This is not the only time re-export would boost export of locally manufactured goods.
In Q1 2019, for instance, the NBS said, “The value of manufactured goods exports rose by 511.19 per cent when compared with the value recorded in Q4 2018 and 6.43 per cent compared to the corresponding quarter in 2018.”
It attributed the increase to the re-export of high value manufactured goods, notably vessels and other floating structures (valued at N202.6bn) to Angola.
It added that refrigerated vessels worth N69.6bn were re-exported to Ghana, while other light vessels valued at N12.6bn were also re-exported to the United States.