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•Stakeholders decry 45% reduction in cargoes import volume
By Steve Agbota [email protected] 08033302331
AS net importer of goods and services raging from food, raw materials, automobile among others from US, Europe and Asia Nigeria is currently going through some challenging times transacting with other countries in global commerce.
Presently, stakeholders in the maritime sector, especially shippers (importers), are beginning to show some concerns over a 45 per cent drop in cargo throughput into Nigeria due to the rising and unstable foreign exchange (forex), the free fall of Naira and among others.
For instance, on Monday, June 26, 2023, as the new exchange rate came into effect, importers began to pay more duties for the clearance of their cargoes at the nation’s seaports after the Central Bank of Nigeria (CBN) increased the official exchange rate used by the Nigeria Customs Service (NCS) for calculating import duties and levies from N422.30/$1 to N589/$1.
This is coming after President Bola Tinubu in his inaugural speech on May 29 2023 declared his government’s decision to unify the exchange rate, replacing the previous multiple exchange rate regime implemented during the administration of former President Buhari.
President Tinubu highlighted the importance of a unified exchange rate and emphasised the need to redirect funds from arbitrage toward meaningful investments.
However, following the increment, the widening exchange rate between the official and parallel market has not gone down well with importers as they lamented that the situation was going to further affect importation, which will definitely affect the purchasing power of many importers.
The increment recorded was as a result of the floating of naira that allowed market forces determine the exchange rate of its currency. When the CBN dictated the rates, cargo clearance exchange rate on the Customs single window was N422.30/$.
But experts in the maritime industry have lamented that the new Customs exchange rate effectively means that consumers will pay more for imported goods because importers will add the additional charges to recoup their money meaning there would be an increase in import duty payable by clearing agents to the Customs service.
Daily Sun learnt that importers will now pay more to bring in cargoes due to the rise in dollars and freight charges. Already, the level of importation at the ports has slumped drastically, which has reflected in the very low volume of work for haulage companies and clearing agents at the ports.
Speaking with Daily Sun, the National coordinator Save Nigeria Freight Forwarders Importers and Exporters Coalition (SNFFIEC) Chief Osita Chukwu, confirmed that the volume of importation into the country dropped by 40 per cent since the domino effect of the policy kicked off.
According to him, Nigerian government should be able to engage with the Bureau of Statistics to to find a solution where they can be able harmonise the system on exchange rate in order to build revenue.
He said that the exchange will be discover that low importation will be coming, which will endanger revenue building because payment of salary might be difficult since the oil revenue is not working out.
Confirming the increment to newsmen, the public relations officer, Association of Nigerian Licenced Customs Agents (ANLCA), Comrade Omone Monije, rued the increment in exchange rate, saying from Monday 26, 2023, clearing agents will pay more for cargo clearance.
She said the increment will affect vehicle clearance, adding that clearing agents should engage their clients to forestall disagreement.
“The Federal Government has increased the Dollar exchange rate, from N422.30 to N589.45 to a dollar. What it implies in simple terms is that, if clearing agents have a Debit Note as at Friday that has not been paid on the system or Pre-Arrival Assessment Results (PAAR) or they have given you the value and you have not captured, it has affected you directly on Monday.”
“Once there is a change in the portal, there is nothing anybody can do about it. But if you have captured or access your work, you are good to go and your consignment would be released for you if you don’t have any infraction,” she said.
She explained further that clearing agents that hasn’t done capturing of their consignment even if they have captured their consignment would have to pay with the old price.
“Whether you have collected your value, whether you have a PAAR, if you have not done your assessment as of now, you can’t capture with that old rate. Especially for the Roll On Roll Off (RORO) or those that are doing PARR door to door. It’s a Federal government policy. We stakeholders can’t do anything for now, saying it’s the prerogative of FG to intervene and stabilize the foreign exchange market,” she said.
A Licensed Customs Agent, Remilekun Sikiru, confirmed that the new rate has been effected on the Nigeria Customs Service portal, adding that the Customs duty payable on vehicles have increased astronomically.
“For instance, the total duty payable on a Toyota Camry was N901 million before now, but it has now increased to N1,270 million. Duty payable on Venza was N1.632 million before, but it is now increased to N2.278 million. In the same vein, Toyota Corolla total duty payable was N786,000 before, but it has now increased to N1.097 million,” he said.
Also speaking with Daily Sun, the National President of Association of motor dealers of Nigeria (AMDON) Prince Ajibola Adedoyin said that the new exchange rate will certainly affect automobile business in the country.
“Because you know that as long as the rate of exhange has gone up and we have to use the dollars to do our purchases. Definitely, you should expect rise in it. However, they are things we are expecting maybe the Government would have done, which would have been able to help out in this area because we all understand the fact that as long as there are some commodities that are not readily available within the country that will still need to bring in and vehicle is one of them. “No matter how you say you want to bring in the local content to make us to be assemblers or manufacturers, we still know that we have a very long way to go and anything that affects vehicles affect transportation.
So we are still saying the same thing and we are still in the same period we would have been able to do something about it,” he added.
Howbiet, he hopeful that maybe by the time this new government is able to to take off properly, they should be able to do something about it, adding that certainly, the new exchange rate would definitely affect the prices of cars and anything affects the prices of cars will definitely affect the price of transportation.
“Now, you can put it vis avis the cost of petroleum product, you can see the kind of things ahead for Nigerians. Even before, automobile business in the country is not that good considering all the policies that the previous government has to introduced, which include the closure of land borders.
“To be sincere with you, there are lot of our members that prefer bringing in vehicles through the neighbouring countries due to one reason or the other. But even then is not that easy, with this new introduction again that is to say and additional to what is on ground now,” he said.
He said one thing they should understand that this thing will affect is that it would continue to affect the kind of vehicles on the nation’s roads, saying instead of someone trying to buy a new car now in quote “Tokunbo” to change the former one, they will now trying to be managing old one they have, which of course at stage it will become a threat on the nation’s roads.
“This thing has a twin of reactions that the thing bring to the whole system, which of course the government needs to look at while making decisions because at the end of the day even making whatever you say you want to get from implementing it, it will now make it to be a minor at end of the day because of you look at that one can do on the safety of our road,” he explained.
He said the truth of the matter there is nothing the government say they want to make it by taking away those vehicles that are rickety of the road where people cannot afford new one, adding that transportation is a thing that people cannot do without because it is a necessity.
“Transport is a necessity not a luxury. You cannot say you want to go to the one place or the other, this is luxury let me treck it. You must go through the transport. These are the necessities people will definitely do no matter what the government say it wants to enforce.
Transport is like food, people have to look for it. It is like that.
“And don’t forget transportation is the economy of the country because what are we talking about the economy is the movement of goods and services and people from one place to the other. Those are both that the new exchange will definitely affect and add more cost to what’s already on the ground. Already now people are buying Nigerian used cars because of the prices. The Tokunbo that has been used in Nigeria, people are trying to get that one because they could not afford Tokunbo cars,” he added.
Meanwhile, President General, United Berger Motor Dealers Association (UBMDA), Metche Nnadiekwe, said the situation is tiring and everybody are tired of the rise in CBN and Customs exhange rate on imported goods and vehicles. He lamented that the thing is discouraging because there is no time for calling the stakeholders for meeting to deliberate.
“All of a sudden, you wake up and increase the exhange rate. It is not good and very wrong. This thing is killing automobile business. People are not longer buying cars from us. My brother you need to come here and see things for yourself. People are no longer buying. You will buying a vehicle to sell but the vehicle will be with you for two years.
“Our members are unable to buy and these are the people that have family. With this kind of a thing and you are making things hard for people. There is no way people will not look for other ways to survive, which will drive some people into crime. If you come to our market, it looks like a mourning place where people are mourning. In fact, we are mourning,” he lamented.
He begged Federal Government to look for ways to reverse the exchange rate in such a way it will attract business commity , saying the present situation in the country is so hard on the people and government policy is not friendly.
