In a recent move to tighten regulations around agricultural and food commodities export from Nigeria, the National Agency for Food and Drug Administration and Control (NAFDAC) has tendered a proposed regulation bill to the federal government suggesting significant changes to several export-related activities.
Although aimed at further solidifying efforts to guarantee the quality and safety of export goods, the bill has sparked major reactions, particularly from members of various cocoa exporters associations in Nigeria, most of whom oppose it. So, what is the content of the proposed NAFDAC export regulation bill? What are its potential implications for exporters? Why are the stakeholders in the cocoa industry calling for its rejection? Let’s find out.
Understanding the Proposed NAFDAC Export Regulation Bill.
The proposed NAFDAC export bill seeks to introduce stringent regulatory measures on all export activities involving several product categories within its operational purview. The provisions of the regulation will apply to commodities and items classified as;
Regulated products, food, drugs, cosmetics, medical devices, packaged water, chemicals, and related matter.
As such, stakeholders in the exportation of the listed products will be subject to the bill’s provisions should it be passed into law.
The key elements of the bill can be summarized in the following points.
- Authorization and Mandatory Certification: The proposed bill would require all exporters to obtain NAFDAC certification for all products intended for export. This process will entail the submission of relevant documents and an application form administered by NAFDAC. It also involves rigorous testing procedures to ensure products meet international quality and safety standards.
- Increased Inspection and Monitoring: The Bill also proposed additional inspections and monitoring to be conducted by NAFDAC’s designated personnel or agencies on export goods. The inspections will not only be at the production and storage facilities, NAFDAC would also reserve the right to conduct pre-shipment inspection of consignments before export.
- Traceability Requirements: The bill would also require the exporters to implement robust traceability and documentation systems to track the origin and movements of their products as well as the information of the producers, suppliers, and other key actors involved in the supply chain.
- Export Fees and Levies: The regulatory activities proposed in the bill will attract commiserate fees and levies. These charges will be incurred by the exporters who must remit the dues on their export consignments.
Implications for Cocoa Bean Suppliers and Exporters
Cocoa is one of the commodities captured within the regulated products category, as such, the proposed bill has significant implications for cocoa bean suppliers in Nigeria. Below are some of the likely impacts on the exporters’ operations:
Increased Operational Cost: From a financial perspective, several conditions cited in the proposed bill mean more taxes and tariffs on exporters. For example, the mandatory certification process with additional fees and levies during the pre-shipment inspection would increase the cost of exporting cocoa. Moreover, exporters may also have to install new infrastructure, create new processes/policies, and employ additional manpower to comply with stringent regulatory requirements during the cocoa export procedures.
Export Delays: Existing cocoa export procedures are already susceptible to getting protracted and taking time – adding the new NAFDAC regulations into the mix will make matters worse. The increased inspection and monitoring will likely lead to further delays in the export process. This is particularly concerning for the average cocoa bean supplier, as it might result in international contract default with off-takers which may lead to heavy penalties.
Compliance Challenges: Again, the requirements of the bill will likely force exporters to put new infrastructure and policies in place to ensure compliance. However, this will not be an easy change for most affected parties. For example, several cocoa exporters are already hard-pressed in meeting up with the EUDR traceability requirements, and implementing additional systems to accommodate NAFDAC’s requirements would be too demanding for many.
The Rationale Behind Cocoa Exporters’ Call for the Bill’s Rejection
Considering the implications of the proposed bill, it is easy to understand why members of the affected parties would be opposed to the proposition. Expectedly, several actors in the Nigerian cocoa industry have vocalized their concerns with the proposed bill.
The most popular sentiment revolves around how some of the propositions in the bill would result in a duplication of the responsibilities and functions of other government agencies. For example, the pre-shipment inspection cited in the bill is already within the purview of NEROLI technologies which issues a clean report of inspections (CCI) to exporters after every inspection.
Similarly, the export application administration and certification are already part of the Nigerian Export Promotion Council’s (NEPC) responsibilities. Currently, no individual or corporation can legally export items outside Nigeria without obtaining the necessary certificate from the NEPC.
As such, NAFDAC incorporating such measures in their processes would likely be a redundant development. Plus, it will result in the exporters accruing double the cost of obtaining certifications for the same activity from two separate bodies.
In addition, a section in the bill seeks to authorize NAFDAC to seal any premises without lawful order. Without appropriate checking measures in place, this policy could be susceptible to abuse and use as a manipulative tool.
The intentions might be great, but the implications aren’t pleasant.
While the proposed NAFDAC export regulation bill aims to enhance the quality and safety of Nigerian agricultural exports, several of the proposed conditions in the bill present significant challenges that could impact the operations of cocoa exporters.
The rejection calls stem from concerns about increased costs, redundancy, bureaucratic hurdles, and the potential susceptibility to abuse of the proposed policies. As the debate continues, stakeholders must find a balanced approach that ensures product quality without stifling the growth of Nigeria’s vital cocoa export industry.
