… as SAHCO urges govt. to encourage export in Nigeria aviation
Nigeria is backward despite the accrued benefits inherent in cargo export to the development and growth of the economy, hence a recent gathering of titans in the industry to address challenges confronting this subsector of the country.
According to the publisher of AtqNews, organisers of the recent aviation and cargo conference (CHINET 21), Ambassador Ikechi Uko, of great concern and regret is that foreign airlines operate into Nigeria with large volumes of cargo and fly back empty with Nigeria losing enormous opportunity to create revenue through cargo export.
A major area of export in aviation is ground handling; however, this subsector is encumbered with a lot of challenges in the country, ranging from shortage of electricity, high cost of forex, charges and double taxation among others.
Presenting a paper on ‘The Process and Challenges of Warehousing Your Goods for Export,’ the Managing Director/CEO of Skyway Aviation Handling Company (SAHCO) Plc, Mr. Basil Agboarumi, highlighted some of the challenges as shortage of electricity which has been a major challenge in warehousing in ground handling, high cost of forex to acquire facilities for the running of successful export warehouse, low tariff, too many government agencies doing the same thing, double taxation, limited space for expansion and cargo procession.
“The importance of warehousing in export cannot be overemphasized; warehousing allows for timely delivery and optimised distribution, leading to increased labour productivity and greater customer satisfaction.
“It also helps reduce errors and damage in the order fulfilment process while preventing your goods from getting lost or pilfering during handling,” he stated.
He said: “Some of the challenges of warehousing goods for export include:
“Electricity: Shortage of electricity has been a major challenge in warehousing in Ground Handling, for example, the machines must be powered, there are some perishable goods that need to be in certain temperatures before they are loaded in the aircraft and the only way to achieve this is through electricity. At SAHCO, we need uninterrupted power supply especially to power our freezers and cold rooms; hence we are constantly on generator;
“High cost of forex to acquire facilities for the running of successful export warehouse;
“Tariff/charges: Despite the fact that ground handling is an expensive investment, ground handling cost in Nigeria is very cheap, and the payment for services rendered is not commensurate with investment;
“Duplications of duties by government agencies: There are too many Government agencies doing the same thing .For example, we have Quarantine, Bomb squad, NDLEA, DSS, etc, these agencies can be unified to curb bureaucracies.
“Double taxation: For example, Plant quarantine and Produce quarantine clearance has to be procured with a bill despite the fact that they do the same thing;
“Limited space for expansion and cargo procession.”
According to him, exports play a lot of positive roles in a country’s economy contributing immensely to a country’s GDP in various ways.
Agboarumi said export strengthens currency because when goods are exported to another country, forex is earned and these earnings strengthen local currencies.
He said that it establishes relationships pointing out that one of the best ways to cement relationships between countries is through trade and this is achieved through exports of goods.
The CEO further said that exports create employment opportunities as many people earn through the export value chain ranging from transport companies, ground handling companies, airlines to packaging companies among others.
He also noted that export encourages farming, explaining that exports open new market frontiers to farmers to increase their profits and encourage them to produce more.
Agboarumi noted that export, (especially agro and manufactured products) is the new oil, “hence it should be encouraged and supported.”
The ground handler therefore, urged that export in Nigeria aviation should be encouraged by the elimination of bureaucracy.
“Bureaucratic bottlenecks associated with government inspection agencies often result in delays in the export of goods, if this is curbed, it will encourage more exports,” he pointed out.
He also called on the government to encourage ground handling companies by making forex available for the purchase of Ground Support Equipment; “these equipment are manufactured abroad, ground handling companies have to source for forex through the unofficial market at exorbitant rates just to pay for equipment.
The managing director further called for an increase in the availability of credit, stating that the availability of short and long term capital/credit is crucial to exporters.
He also pointed out that ground handling companies have limited space to expand their warehouse due to the nature of the environment they operate from which is very controlled, so it is cumbersome to have access to land.
“Therefore if the authority could provide more space for warehouses, it will go a long way to encourage exports,” he appealed.