The Effects of Charcoal Export Ban on the Nigerian Economy

NACPDEAN gives reasons to the government why there is a need to lift the ban based on the following effects on the economy

1. Loss in FOREX: A huge drop in Foreign exchange earnings for Nigeria because the Charcoal commodity is not yielding forex as expected due to the ban;

2. Loss of Investment: With the ban in place, we cannot export our goods which leads us to a loss of capital and revenue;

3. Demurrage: Right now there are several containers accumulating demurrages at the port;

4. Loss of Goods/Investments: Most of our containers have been destroyed, vandalized and lost because the truck owners/drivers discharge/drop off our containers/investments due to the fact they are tired of waiting with the containers on their trucks, leading to the loss of their truck tyres, while they also need to continue doing other business with their trucks;

5. Soured Off-Takers Partnership/Agreement: We have lost capital and revenue due to the lack of exportation of our products and the local producers whom we have empowered financially to produce goods for those of us who are exporters end up selling them to the local dealers because they need money to survive which leads to a lot of problems, challenges and cases;

6. Lack of Buyers and Importers Confidence in Nigerian Market: We have lost foreign clients and will continue to experience a lack of confidence with Nigerian exporters by foreign clients (Importers) due to the immediate ban, inconsistency and policy somersault;

i. Some foreign clients have paid advance fees to exporters in Nigeria, hoping to get their charcoal on board the ship within three (3) or a maximum of four (4) weeks but are yet to receive their goods after several months of financial advance commitments due to the ban leading to the loss of these advanced funds because they are hardly refundable/recoverable;

ii. Nigerian exporters lose foreign clients and their recommendation to other foreign buyers/importers for other agro products in Nigeria;

iii. The ban has pushed a lot of foreign buyers/importers away from patronizing Nigerian exporters (Nigerian market) to other countries that are also producing the same commodity such as Egypt, Ghana and other African and Asian countries;

7. Indebtedness: Several exporters have run into debts, with the banks/financiers chasing and embarrassing them with police and also confiscating their collateral/properties because in some scenarios an exporter either collects a 70% advance fee from their foreign clients or the exporter finances the whole project 100% by sourcing for the funding 100% or the part funding locally by borrowing from financial institutions like banks etc. or friends, family members and individual investors/financiers;

8. Loss of Investors: Investors are losing hope in the charcoal business because of the level of invested funds that they have lost and incurred due to the effects of the ban;

9. Unemployment and Empowerment: The women and youths have lost their employment and empowerment due to the effects of the ban which has caused a lack of production and non-availability of work for the 95% workforce of the charcoal sector in various rural areas where charcoal is being produced in the country;

10. Insecurity: The effects of the ban on charcoal which are too numerous to mention all, but a loss in FOREX earnings, loss of investments, high demurrage cost, loss of goods/investments, soured off-takers agreements, lack of buyers and importers confidence in the Nigerian market, indebtedness, loss of investors, unemployment and loss of empowerment will lead to insecurity in diverse ways in the country.