By Steve Agbota
The fluctuations of exchange rate has really dealt with clearing agents operating in the nation’s maritime industry, as the majority of them are out of jobs due to low cargo throughput into the ports.
As a result of the floating of foreign exchange rate, importation generally has nosedived drastically as importers are finding it difficult to bring in goods.
For instance, the level of importation on bulk cargo has dropped by 20 per cent, vehicles dropped by 25 per cent while containers dropped by 30 per cent respectively.
Due to the sharp drop in importation, clearing agents and Customs brokers have been out of jobs and remained idle while some of them are said to have lost their lives.
Sunday Sun learnt that in the last one year, the Central Bank of Nigeria (CBN) has adjusted the Customs import duty more than 40 times, which has forced some importers to abandon the nation’s ports, preferring to import through along the West coast (Benin Republic, Togo and Ghana) in search of stable and cheap exchange rate to do business.
As a result of harsh business operating environment coupled with the challenges of high cost of doing business at the ports, freight forwarders are finding it difficult to cope, businesses are shutting down while people are losing jobs.
Clearing agents who spoke with Sunday Sun said that a large chunk of Nigerian cargo are being diverted to neighbouring countries such as Ghana, Togo, Benin Republic and Cameroon due to the current economic situation in the country.
Speaking with Sunday Sun, the former acting National President of Association National Licensed Customs Agents (ANLCA), Dr Farinto Kayode, said that the fluctuations of exchange rate has really affected the clearing agents, adding that it has not been very good for people in the industry, particularly freight forwarders.
“I have categorized it in three segments for the freight forwarders. We have some people who have actually left the job. We have some who have actually stayed on the job thinking that tomorrow will be a better way. We have people who have died because of this job.
“I can tell you we lost a lot of members this year. We have lost a lot of members and high-quality members. It has not been very rosy.
That is why I am one of those who have been shouting on the issue of fluctuations of exchange rates,” he added.
He said the exchange rate fluctuation has actually reduced the level of importation into the nation’s ports.
“We have three categories of imports. We have bulk cargo, containerized goods and vehicles. The level of import on vehicles has dropped by about 25 per cent, while the level of import on containers has dropped by about 30 per cent, the level of import on bulk cargo, also dropped by about 20 per cent, so we are not really winning the war,” he stated.
He said that the government has not come out categorically to address this issue as it relates to cargo clearance.
“And that is why within four days in a week, we have more than five different exchange rates and that is not too good for the economy, and that is why the economy is not moving. I have stated severally that there is need for government to look inward and let us have predictive exchange rate and these are not really being addressed,” he added.
According to him, the maritime industry is actually dead and stagnant. It is not moving while the volume of import is drastically dropping on a daily basis. The is because of the fact that government is not really looking inward or addressing the issues of the maritime industry.
“When I saw the CBN’s letter yesterday suspending the price verification, I laughed. Because I am one of those who wrote to the National Assembly that it is not their responsibility. I have the letter here. I can give it to you. In line with the Valuation Act, it is the responsibility of the Nigeria Customs Service.
“But because we don’t have people who are advocates, and that is why the CBN thinks whatever they are doing, they have been helping us. We have a CBN governor that is very, very heady. I remember I used that word. Very heady and stubborn. He doesn’t listen to our advice. And this has not really helped the economy.
“And I keep wondering who are the economic policy formulators of this country. The only beautiful thing about this country that I noticed, that our economy has defiled all economic theories. I remember my little economics in the secondary school.
“It has defiled all the economic theory. That is why we are still good to go. But that’s why we should not celebrate too much because everything has its level of elasticity. There is a level where it will reach, it will collapse,” he lamented.
He said the only solution is to have predictive exchange rate for Customs purposes alone, saying it’s not out of place and it is not something that Nigeria cannot do.
“What do I mean by that? If they have pegged our exchange rate for import purposes alone at N1,000 since January; number one, importers will be able to predict. They know that even if I’m bringing my cargo by July or August, the exchange rate will be 1,000 naira. They will still want to import,” he explained.
He hinted that there is a lot of importers that are not importing now because they cannot predict it.
“Yesterday, I was seeing it was N1174, this morning I think it has changed again by about a few cents. A cent is important to every businessman. Because if you are using bank loan, you have to put all this into consideration. We had a week where we have more than five exchange rates. That’s not too good for the economy. So, freight forwarders are not doing well in this era. We are not happy,” he added.
Meanwhile, the National President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said that the maritime industry is an industry that has to do with import and export, shipping and all the rest, adding that import and export is time because of the exchange rate.
He added that due to floating of exchange rate and the rest, a lot of people are losing their jobs in the maritime industry even outside the maritime industry.
“So the maritime industry is not moving the way we expected it to move. People are losing their jobs and cargo throughput is going down, exchange rate is not stable. So there is nothing to show for the maritime industry under this current administration.
“I don’t know what I can say about the maritime industry where exchange rate is high and people cannot import, people cannot buy fuel and they cannot lay hands on money. The poverty rate is moving high all the time. There is nothing in the maritime industry. The industry is going down instead of going up.
“Importation has dropped drastically. You cannot import when your exchange rate is not stable. Look at the price of commodity in the market is escalating. Something you buy today and tomorrow the price has changed. So how do you expect the country to be better? One year is gone. And we have the blue economy ministry that is there and not doing enough. Many things are not going well,” he explained.
The Managing Director of Sula Marine Global Limited and foremost freight forwarder, Sulaiman Ayokunle, said that there is not much activities at the ports now, adding that clearing agents are just going to their various offices to sit down without jobs to do.
“Importation is very low because you can imagine the effect of the floating exchange rate. This is not something we should find ourselves in. Floating exchange rate at this time of the economy, in fact, it is one of the minus and negativity of what we are witnessing now.
He said that the floating exchange rate is not ideal because it does not create room for predictability, saying one can’t predict as a businessman.
“As a businessman, forecasting and budgeting is one of cardinal points in order to determine your profit or survival level but because of that floating exchange rate the reverse is the case. On Customs, we really felt the impact of the Comptroller General of Customs, Wale Adeniyi but there is room to do more because we are not finding it easy.
“But we know that some of these are fiscal policies from the Ministry of Finance and the other one is monetary policy from Central Bank of Nigeria. Both of them should not look at the maritime and aviation sectors as cash cow. We should use that medium to develop the interest of foreign investors to come in more into the country by making taxes, duties and levies to be human friendly. But the way we do it now is about revenue, it shouldn’t be about revenue only because that is not the cardinal, the core value and responsibility of Nigeria Customs Service,” he said.
