This Position paper is submitted by the Nigerian Network of Women Exporters of Services (NNWES). NNWES is a Service Export focused Organization, therefore, most of the propositions herein, shall be centered on issues and incentives that will give a huge boost to Services Export in Nigeria, and which will in turn, lead to the attainment of most of the 17 Goals of the world’s 2030 Agenda, and Nigeria’s quest for diversification of the Economy as well as boosting the non-oil exports for economic growth and national development.
The Service Sector, like we all know, deals mostly with intangible products within the economy, yet, it represents the fastest growing sector of the global economy, and the greatest contributor to job creation. Data based evidence had shown it constitutes over 75% of the GDPs of the fast growing and developed economies of the world, and over 65% of those of the low income countries and the Sub-Saharan Africa. It is one the major sectors that generate credible employments for all categories and age groups of the employable population. Above all, efficient service sector is critical for optimizing performance and competitiveness of the manufacturing, agricultural, mining and all other sectors of the economy.
This analogy is made, sequel to the fact that if the service sector is properly understood by the relevant authorities and policy makers, and if given the necessary push and incentives, the problems of Nigerian economy and quest for export expansion would have been more than 75% solved.
NNWES wishes to remind NEPC that the NETWORK, NNWES was established in Nigeria in the year 2006, as a result of the Technical Assistance program of the United Kingdom’s Department for International Development DFID, which was implemented by the International Trade Center, Geneva. At the lunch of the Network were the Honourable Minister of Commerce then, now Trade and Investment, the Honourable Minister of Women Affairs, and the Executive Director of Nigerian Export Promotion Council (NEPC). NEPC was mandated to be its supervisory body and to work closely with the Network as a focal point for the development of Women in Services Trade and Export.
It is worthy of note that, there is no woman who bears a child and watches it stagger, or fail unaided, where the woman stands on a very good footing to be of immense assistance to that baby. NEPC we wish to stress, should not forget that NNWES is its child, and we implore NEPC as a Parent body to NNWES, never to neglect its growing baby NNWES. NEPC should always bear NNWES at the foremost of its activities and ensure adequate support is rendered to it in other to be certain of its survival and growth.
The Service Sector is so huge, and according to the WTO-GATS, it comprises of 12 main sectors, 160 sub-sectors and other emerging sectors. On this note, therefore, we wish to propose for the following incentives for SERVICES EXPORT GROWTH, WITH MAJOR CONCENTRATION OR INTEREST ON THE WOMEN as our primary Constituency:
- BUSINESS DEVELOPMENT INCENTIVES/FUNDING OF EXPOSURE TO INTERNATIONAL SERVICES EXPOSITIONS
An incentive that offers business assistance in identifying and pursuing global market opportunities is paramount for any growth in the service sector. It is imperative for government to assists local service businesses, particularly women in services, with the cost incurred when they conduct businesses outside the country. This will help to increase their competitiveness abroad. It develops export markets services, and even recruits new foreign direct investment into the country.
The incentive could be drafted to include Individual Exhibition Participations, joining the National Trades Delegations, Groups, Organization Networks or Corporate Participation. Being visible in international trade events is typically essential in services export. The grant should be made to target businesses which need to showcase their services in global exhibitions but don’t have the funding to do so. This incentives could include a return economy-class air ticket, transportation of samples, banners of services and promotional materials, exhibition space rentals, stands erection/construction, language interpretation fees, internet connection/assess, telephone usage, daily subsistence allowance and exhibition registration fees.
There is no doubt that the Service Sector needs building a lot of Confidence between the provider and the consumer, and ensuring inter-personal connectivity in most cases. Thus, this support can help in fostering credibility in foreign market, and make service exporters familiar with potential customers.
- RESEARCH AND DEVELOPMENT INCENTIVES:
Setting out incentives for research and development in the service sector can aid growth in innovation and development in Services Export, as well as help initiate good policy drafting for the growth of the sector. Further to that, the incentive should equally support Standardization and continuous research on improvement in quality management systems in order to increase competitiveness. It should support the acquisition of International Organization for Standardization’s registration (particularly ISO 9001:2000 for effectiveness) and other necessary standardization certificates which will help increase customer confidence, enhance market image, meet bidding requirements internationally, attract viable clientele, as well as reduce customer complaints on dissatisfaction.
All these will provide adequate competitive edge to the service provider. The incentive here too, should be made to support other quality related processes in the service sector, like: Continuous Quality Improvement (CQI), Business Process Re-engineering (BPR), and Total Quality Management (TQM). All these can help keep the service exporter focused, as well as be radically positioned for improvements and growth. ISO 9001 will always give the service provider international recognition, thus, the need for adequate incentives in this area.
- BANDWITH/BROADBAND/HOTSPOT PROVISION INCENTIVES:
If we remember the words of Doreen Conrad, one of the foremost resource persons who came with the Executive Director of ITC Geneva and the other members of the team to educate Nigerian Women on services export, she said; “If you are not on the internet, you do not exist as long as service export is concerned.” Establishing solid electronic links with customers through emails, online interactions, social medial, and web pages constitute major drivers to service export growth.
Indeed, there is no how one can sustain services export without being seen around the world on the net. Supporting hosting of web pages and sites, maintaining or paying for yearly use of bandwidths, or hotspots is imperative in this divide. We, therefore, advocate for an incentive to cater for this crucial need, which is very difficult for women in service trade and export to maintain. ICT has large spillover effects on service export, and can serve as a major catalyst in transforming non tradable services into tradable and exportable services. Incentives to aid reduce cost on telecommunications and internet access is a key context for support in this area.
- CAPACITY BUILDING/TRAINING/HUMAN RESOURCE DEVELOPMENT INCENTIVES:
There is still inadequate understanding of what trade in services and services export are all over Nigeria. This flaw has been a major wage to its rapid growth and development. NNWES has on its own, tried severally to educate Nigerians both in public and private sectors on what constitutes such, and how to tap into the numerous benefits and opportunities that abound in the sector. Yet, the cost imperatives of building the capacity of participants is too huge and difficult to settle.
Increase in awareness of what trade in services is, what service export is, how to export, and how to source for markets as well as the numerous opportunities that abound in the sector is highly essential. This will no doubt, help service exporters possess ownership-specific assets in knowledge, technology, organization management and marketing skills. We, herein, too, advocate extensively, for a broad based incentive for Capacity Building of Women, Youths and SME Operators particularly in this sector. The incentive will help broaden their horizon on the field, equip them with the necessary resources that will strengthen their knowledge and skills which are required for success in international markets on services. The capacity building can amongst the suggested areas above, also involve group and individualized counseling and advocacy; training programs on subjects such as modes of service exports, service export documentations, service export controls, the basic exporting regulations, et cetera.
- DRAW-BACK FOR EXPORT EXPANSION PURPOSES/EXEMPTION OF INCOME TAX IN RESPECT OF VALUE OF INCREASED SERVICES EXPORTS AND IN RESPECT OF MACHINERIES AND PROPERTIES:
There should be an exemption incentive which should be made available for persons who export services. Service exporters who export to foreign clients should be exempted from the payment of income tax in respect of a particular percentage of the export value of increased exports. In this case, the difference of the value of the qualifying services exported in the basic period and that of the immediately preceding basic period could be calculated and tax exemption granted on a determined percentage of the increased value. This can grow international services trade.
Further to the above, there should be incentives in the form of duty free importation of machinery, equipment (Computers and accessories), spare-parts and materials to aid services trade. In other words, tax credits for investment in the service sector, property tax exemptions, sales tax rebates, and exemptions from excise taxes (like VAT), and customs duty on import are important.
In general, if all these are critically considered for inclusion in the Basket of Incentives by the Technical Committee, and if they are subsequently approved and included in the Nigeria’s Basket of Incentives, we shall be certain that the benefits will not only be for the Women in Services Export, but equally for the generality of Nigerians engaging in trade in services and export. In turn, there will be ample job creation, poverty reduction and possible eradication, and huge economic growth for all, leaving no one behind.
Submissions made by:
BARR. NKIRU JOY OKPALA,
Nigerian Network of Women Exporters of Services (NNWES).