NIGERIA S STRATEGIC INTEREST ON TRADE IN SERVICES: ROLE OF THE NEPC Being a Paper Presented At National Stakeholders Workshop on Advancing Services Sector Development and Reforms in Nigeria Organised by NANTS With the support of ILEAP By Lawal S. Dalhat, NEPC 10 th -12 th November, 2009 11/27/2009 1
Vision Make the non-oil export sector a significant contributor to Nigeria s GDP. Mission We facilitate opportunities for exporters & promote sustainable economic development. 9/23/2009 2
The Role of NEPC NEPC s role is 4-pronged in nature: 9/23/2009 3
Services Market in Nigeria Most Nigerian service firms have low level of awareness about the meaning of trade in services. Nigerian service firms have limited knowledge of the export potential using all modes of supply. Successful Nigerian service exports in GDP percentage are in finance & insurance (21.53%), transport (9.89%) and B2B (7.75%). There are 71 service associations in Nigeria. There is a business case for positioning Nigeria in the global services market; and effectively stimulate public-private collaboration in GATSrelated negotiations. Great export potential exist in conference services and others. Continues on the next slide
Cont d Most Nigerian service firms are small in size with less than 10 employees. Nigerian firms supply services largely by mode 1 (cross-border trade) and mode 2 (consumption abroad). Most clients of Nigerian service firms originate from ECOWAS, India, US and UK. Services regulatory bodies exist and are active. Obtaining adequate financing is a significant challenge for Nigerian service firms, together with acquiring trade contacts. High cost and erratic nature of energy services impedes Nigerian firms to conduct business and serve clients.
Economic Strength of Service Exporting in Nigeria STRENGTH Freedom of people traveling abroad Air infrastructure Improvement in telecommunication services Market orientation of Nigerian economy Existence of a strong professional class Entrepreneurial spirit of Nigerians English as language of international business Demographic advantage Existence of policies of transparency, due process and accountability Existence of strong regulatory environment 11/27/2009 6
Weakness of Exporting Services in Nigeria Stress and delay in visa permit at foreign Embassies Constant power outage Lack of access to bank credit to establish services export infrastructures Low awareness of services exporting Low skill in services exporting Access to affordable ICT equipment needed for services exporting Slow public sector payment practice to services companies Non-recognition of professional credentials in most foreign markets 11/27/2009 7
16 Services with Export Potential in African Countries 14 12 Frequency of services 10 8 6 4 2 0 B2B and Professional services Tourism and Travel Educational services Health-related services Engineering and Constructionrelated Computerrelated services & IT Transportation services Recreational, cultural & sporting services Real estate services & property Consultancy services Types of Services Notes 1. The chart shows the top ten services with export potential identified by ITC, in African countries. 2. The countries included are: Botswana, Cameroon,Ghana, Kenya, Mozambique, Malawi, Mauritius, Morocco, Namibia, Nigeria, Swaziland, Tanzania, Tunisia, Uganda, Zambia. Source ITC
FINANCIAL SERVICES EXPORTERS S/No Name of Financial Organisation Country Presence, Outside Nigeria 1 Zenith International Bank Ghana, with eight branches 2 GT Bank Ghana, Sierra Leone, Gambia It s the fastest growing bank in Sierra Leone 3 Union Bank of Nigeria Ghana, through Shareholding in HFC Bank; Republic of Benin through 56% shareholding inbanque International Du Benin 4 Diamond Bank Plc Republic of Benin 5 Access Bank Plc Sierra Leone and Gambia 6 Intercontinental Bank Plc. Ghana 7 United Bank for Africa Ghana 8 First Bank of Nigeria Plc. United Kingdom 11/27/2009 9. Nicon Insurance United Kingdom 9
Role of the NEPC 11/27/2009 10
What NEPC is doing Creation of the Trade in Services Unit Zonal Service Export Desk Officers Services exporters survey/studies Partnering with Development Partners ITC, ComSec, Matrade, Training programmes and workshops on services export for the Government Officials and the OPS Joined the ServicesExporterNetwork Administrative access to the serviceexporternetwork.com country portal. AOPN and ODIN 11/27/2009 11 Continues on the next slide
cont d Services sector Survey (ITC and Financial sector) BPO pilot project Capacity building (seminars and workshops) Nigerian Network of Women Exporters of Services. Facilitated the sponsorship and participation of Drassolingua Nigeria Ltd at the international trade mission for women in Canada Bridges Across Borders Networking (2006-2008) National Services Sector Export Strategy 11/27/2009 12
What will be done Continuous awareness creation and capacity building Seminars/workshops Training/train-the-trainer Production of product catalogue on services Formation of Coalition of Services Industry Formation of African Outsourcing Association Services Trade Mission Incentives for exporters of services Domestic Services Expo Continue to work with Development partners 11/27/2009 13
Services Sector Export Strategy Development First attempt - International Trade Centre Second attempt - Commonwealth Secretariat Project Consultants Nathan.EME, London 11/27/2009 14
Purpose of the Services Sector Export Strategy The Sector strategy seeks to provide the framework for guiding all sector stakeholders and directing action towards the realization of the vision of export growth in the sector. The strategy will focus on needs and capacity analysis, and the critical actions needed to drive the export readiness of the sector for the attainment of the economic benefits. 11/27/2009 15
Priority Services Sectors Financial Services Banking and Insurance Entertainment Movies and Music ICT BPO and Software Development Professional Legal and Medical Educational Knowledge based activities 11/27/2009 16 Continues on the next slide
Cont d ICT: 62% of SSA market, growing at 30% p.a.. Attracted over $12billion in investment mainly in communications. - hardware and software applications; regional exports - The World Bank has recently committed $50m for investment into Nigeria s ICT enabled services and BPO industry - Nigerian diaspora can provide market outlets, skills 11/27/2009 17 Continues on the next slide
Cont d The telecom sector recorded a growth rate of 535% Nigerian telecom industry the fastest growing in sub- Saharan Africa. Globacom has established its presence in Ghana and Benin RepublicFinancial services: Nigerian banks have established presence in SSA and other parts of the world, mainly retail banking 20 out of 25 Nigerian banks in top 100 banks in Africa, and indeed, 13 in top 40; and 5 in top 20 About 17 out of 25 Nigerian banks in top 1000 banks in the world by end of 2006 (there was none in 2003) 11/27/2009 18
Services Sector Export Strategy Development Nollywood: largest volume of product in world but only $ 250m in value. Africa wide presence but large loss of revenue to piracy. Nigerian & African diasporas are valuable markets. Music: largely domestic market suffering huge piracy. Education: huge public sector neglect but new private institutions. African diaspora presents strong resource base. 11/27/2009 19 Continues on the next slide
Cont d Nigerian Professional Service Export Committee, (NIPSEC) A task force comprising representatives from key agencies in the public and private sector, See to the implementation of the project at the national level. Oversee and direct the sector strategy formulation process; Oversee the implementation of the sector strategy; Advise government on services export matters; Account for implementation and fulfillment of services export goals. 11/27/2009 20
BRIDGES ACROSS BORDERS 2008 11/27/2009 21
Services exporter network 11/27/2009 22
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Q&A 11/27/2009 24
www.nepcng.com www.nepcng.com info@nepcng.com 11/27/2009 25