charcoal export in Nigeria
The unavailability of foreign exchange, coupled with an unprecedented hike in exchange rate has resulted in increased costs across organizations. In reaction to this, there have been massive sacks in various sectors such as oil and gas, banking and business conglomerates; the naira has fallen over 80%. Oil revenues, the mainstay of Nigeria’s foreign earnings is at its lowest in the last two decades, which has partly led to recession.
One of the personal recession exit (reccexit) strategy for cooperation and private individuals is diversification into agro produce export. This has brought a wave of new players to the agro produce export business, particularly charcoal, cashew nut, cocoa among other.
This development is a much needed step towards reviving the economy. Produce export is one of our saving grace. This will give rise to large numbers of entrepreneurs, increase employment, improve our GDP, and present a life line to dying companies while offering the much needed opportunity for a favorable balance of payment.
Africa has an official charcoal production of 30.6 million tons in 2012, worth approximately USD 9.2–24.5 billion annually at the point of sale (UNEP,2014). A tonne of charcoal range from 250 dollars to 450 dollars, depending on the types of wood, sizes and other specifications by the importer. Nigeria is Europe’s biggest charcoal supplier, with Namibia, South Africa, Egypt, and Ivory Coast also exporting to Europe. In total, Africa is responsible for 40% of all European charcoal imports (ITF,2013) and 66% of Global charcoal imports is from Africa.
Brazil produces 11% of the world's wood charcoal, the world's largest single contributing country by far, Nigeria produces 8% which makes it second largest exporter of charcoal in the world.
In 2004, a total sum of N9.889 billion in form of Negotiable credit certificate (NCCS) was disbursed to 115 exporters from January to September (The Punch, Thursday, April 8, 2004. page 22). More than 10 years ago! That before the tremendous rise in charcoal trade, it is safe to assume the charcoal export industry of today is multi billion dollars industry. However, it will be hypocritical to discuss the scale of exporting success and revenue without addressing the issue of deforestation.
A considerable part of African forests have already been lost due to its charcoal export to Europe and the Middle East, thousands of acres is been lost annually to this booming trade. The government have designed numerous policies to address the issue of deforestation, but many still strongly feel the same problem with most government policy is, its disconnection from reality. The policy designers never had a reason to burn single log of wood into charcoal, it becomes complex to write a policy that will adequately affect a sector you know little about. In order to make policies work and sustainable in Nigeria, it is imperative to consider domestic socio-economic and political conditions while integrating lessons drawn from successful policy systems with home grown solutions. In my subsequent article, I’ll discuss the strategy to building a sustainable charcoal sector that support communities in generating new jobs, enhancing income generation that in turn helps to create platforms for social development, slow deforestation and climate efforts integration through exploring community-based forest management options and implementing guidelines on sustainable harvesting and production.
This uprising have actually brought out the best in us, by encouraging export and developing new business. For many companies and individuals, this charcoal venture is their first foray into the great unknown. Unfortunately, many will make the same mistakes and suffer the same consequences as those who have gone before. International markets are strewn with the carcasses of global adventurers who have ventured and failed. Millions of dollars lost in investment from fraudulent foreign buyers to cunning local dealers or just lack of experience and technical know-how. The reality is , there are hurdles, pitfalls and challenges like any other business. What are entrepreneurs to do to seize the lucrative opportunities before them while avoiding these pitfalls?
LEARN: Learn the trade or consult the right people. Avoid mistakes by acquiring vital information and knowledge through learning and consulting, having trusted advisers, who have experiences you can learn from to prevent making the same mistakes beginners make. Your knowledge of the business you are getting into is the substance and the foundation of the business. You will build your business on that knowledge you have. Many failed in the business because they start on wrong or insufficient knowledge.
Get DIRTY: Many charcoal exporters who are urban dwellers have little time to spend on their farms to monitor any new development. There are people who hardly visit their production site in a week and even when they do, it will be too late to scrutinize anything in the production. Charcoal export is an international trade with strong emphasis on specifications. Leaving this job to village women and others without proper supervision is a good recipe for failure. Someone must get dirty. You or on your behalf.
Start SMALL: Charcoal is a business where demand is not the problem, it is the supply. There are juicy contract here and there from Europe to Middle East. 10 containers a week, 20 containers a month. In a bid to make it big and fast, many exporters will take on more than they can handle financially and technically. They bite more than they can chew. And of course they will crash!
In conclusion, as I initially pointed out, this uprising will bring out the best in us. The next set of millionaires will arise from this recession. Money doesn’t leave the earth it only changes hands. In my subsequent articles, I will discuss many topics including the modus, charcoal economics and other allied matters.
Biola Bhadmus is an agro produce export professional at Librazain enterprises, an agro produce export, services and consulting firm. He graduated with honors in finance, and holds MBA from university of Lagos.
Librazain enterprises is a charcoal , cashew, and cocoa exporting venture, we also offer related services such as logistics and inspection agent.
28,0dewale street,alausa ikeja Lagos state.Nigeria
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