Cocoa processors under the aegis of Cocoa Processors Association of Nigeria (COPAN), have lamented that operational costs have become a major problem militating the growth of the business in recent years.
The association stated that the Bill on Export Regulations before the National Assembly by the National Agency for Food and Drug Administration and Control (NAFDAC) will impact their businesses negatively as exporters of cocoa beans.
Chairman of COPAN, a body of manufacturers involved in processing raw cocoa beans into Cocoa cake, Cocoa Powder, Cocoa liquor, and Cocoa butter for both local and international markets, Chief Felix Oladunjoye, while speaking on behalf of others, said Nigeria has been relegated to sixth position in Cocoa production in the world and third in Africa behind Cote d’Ivoire and Ghana.
“Nigeria has been relegated to sixth position in cocoa production because of government policies. Today, we are struggling to produce 200,000 tons per annum, Ghana is doing 5.5 tons and Ivory Coast is doing 2.5 per ton.”
He attributed Nigeria’s position to how cocoa beans produced are not consumed here but exported after being processed into Cocoa cake, Cocoa powder, Cocoa liquor and Cocoa butter.
But Oladunjoye said the sector, being in the non-oil sector, is already hard hit by a combination of factors among which are poor infrastructure, rising production costs, the continued fall in the value of the naira, and the Central Bank of Nigeria’s policy on the utilisation of foreign exchange.
The COPAN Chairman said that setting up a cocoa processing factory in Nigeria today will not be less than N60 billion and that those presently operating are doing less than 30 percent of their capacities, “because of the harsh business environment in Nigeria.
“It may be of interest to you to know that out of the 15 established functional cocoa processing factories, only 4 are operating with less than 30 percent capacity.”
He added that multiple taxations are also impacting negatively on their business as it costs about N1.5 million to ship a container of cocoa beans and about N3.5 million for cocoa butter/liquor apart from the shipping companies’ charges.
“Many of our members are battling huge debts from bank loans, which is forcing them to either substantially reduce staff strength or shut down operations, the effect of which is the reduction in the foreign currency being generated through semi-processed export commodities.”
Oladunjoye said to compound the problem of stakeholders in the sector the National Agency for Food and Drug Administration and Control (NAFDAC) is coming up with what he called another ‘Toll Gate.’
Oladunjoye explained that NAFDAC’s proposed Export Regulations 2024 would kill their businesses because the agency lacks both the infrastructure and human capabilities to regulate numerous export transactions in the Nigerian sea and airports. “Nigeria’s current foreign exchange inadequacy will suffer more under the new NAFDAC export regulations.”
He added that: “NAFDAC’s proposed export regulations 2024 are a sheer duplication of efforts and functions of other government agencies. If the National Assembly passes the proposed export regulations 2024, the resultant effects would be multiple taxation, delayed shipments resulting in international contract default, heavy penalties on Nigerian exporters, loss of employment, and worsening company profitability.”
He cited Sections 3, 4, and 17 of the proposed NAFDAC’s Export Regulations 2024 as not being business-friendly.
He noted that section 17 says (a) Where the Agency considers the application for export to be satisfactory and having met all the requirements prescribed by the Agency for exportation, the applicant shall be issued with the appropriate certificate.
(b) Where the application for export is unsatisfactory, the applicant shall be informed in writing and stating the reasons for non-issuance of the applicable certificate.
Oladujoye explained that these sections deal with regulated exports, which are within the purview of the Nigeria Export Promotion Council which regulates all exports as a Federal Government Agency.
“No business person can export any commodity outside Nigeria without obtaining an export certificate or license.
“NAFDAC taking up this responsibility is a duplication of duty, which is already in existence, and double payments for the same service being rendered by NEPC. These particular sections are for revenue generation, which would affect our operations financially and economically and delays in shipments.”
He added that section 7 of the proposed Export Regulations 2024 which provides for inspection says NAFDAC shall (a) inspect facilities for products to be exported where applicable. (b) conduct a pre-shipment examination of consignments intended for export.
(2) The Agency shall review documents specified in regulation 3 of these Regulations for conformance.
Oladujoye said: “By this section, NAFDAC seeks to carry out the function of NEROLI, the pre-shipment agent appointed by the Federal Government to conduct a pre-shipment of consignments intended for export. “NEROLI also issues a clean report of inspections (CCI).
“So, our clients would be saddled with the responsibility of engaging two pre-shipment agencies on the same transaction before it would be able to export, thus leading to duplication of efforts, time-wasting, loss of revenue to the exporters and delay in shipment.
While noting that the provision for a pre-shipment examination is uncalled for, he said Section 18 of the proposed Export Regulations 2024, gives NAFDAC the power to seal any premises without a lawful order.
“This section is too draconian and could be abused. It is also inconsistent with the provision of section 44 of the 1999 Constitution (as amended).”
Oladujoye, therefore, called on the members of the National Assembly to take a second look at the proposed bill for the growth of the non-oil sector in the country.
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