•Clearing agents decry multiple duty between Nigeria, Benin
By Steve Agbota,[email protected] 08033302331
Two years after reopening Nigeria’s land borders over alleged security breaches and abuse of international trade facilitation procedures, the economy of border communities appears to have taken a worse turn as business activities remain a mirage across the border corridors.
The Muhammadu Buhari administration had introduced a joint military operation codenamed “Ex-Swift Response” on August 20, 2019 across the nation’s borders, which in its wake crippled the economy of most border communities.
The border closure policy forced so many people formerly engaged in legitimate businesses losing their jobs with about 90 per cent of Small and Medium Enterprises (SMEs) either grounded or relocated up till now.
The closure of the border was greeted with backlash as economists and experts faulted the policy and tagged it “Robbing Peter to pay Paul.” But more than two and half years later, the government has not been able to articulate what the country gained from the border closure.
However, the Buhari administration announced the closure of the border when the Nigeria recorded huge success in terms of exports to other West African countries. Analysis of official trade data confirmed this. But so unfortunate, the same year that Nigeria shut its land borders and closed trade with neighbours for almost one and half year.
At the same time, imports from Togo, Benin, Ghana and Cameroun to Nigeria were also on the rise, as trading activities were booming across border communities especially Seme border, which arguably the most busiest border in West Africa.
During the period, analysis of different data showed that Nigeria not only lost out in making money from trade within the region, but insecurity also worsened.
In trade, then data from the National Bureau of Statistics (NBS) showed that Nigeria’s exports to the Economic Community of West African States (ECOWAS) region declined from N2.24 trillion in 2019 to N841 billion in 2020 and N1.24 trillion in 2021.
In December 2020, one month to the commencement of the Africa Continental Free Trade Area (AfCFTA), Nigeria reopened four out of eight major land borders closed; Seme, Illela, Maigatari and Mfun. In April 2022, it re-opened the Idi iroko, Jibiya, Kamba, and Ikom land borders, after 32 months. Since these borders were reopened, revenue from importation has largely reduced due to lack of business activities or relocation of business while some importers are out of business.
In order to facilitate trade, the Federal Government lifted the ban on export of goods imported into Nigeria hitherto prohibited under item 8 Schedule 6 of the Common External Tariff to optimise the opportunities offered by the policy, importers have refused to take the advantage and return to the borders.
Up till now, the situation has not improved as businesses activities across the land borders are averagely still at the low ebb, as shippers abandoned land borders over harsh trading policies between Nigeria and Benin Republic government.
In 2021, Daily Sun reported that the Benin Government has imposed a new import duty payment of 9million CFA, per every transit truck laden with Nigeria-bound goods, an equivalent of about N6.5 million which, are exempted from all forms of duty under ECOWAS protocols on transit goods.
Recently, Controller, Seme Area Command, Comptroller Dera Nnadi said the dearth of import was as a result of the trade policy introduced by Republic of Benin, which traders and indeed the Service consider as hostile to Nigeria.
According to him, as a result of the hostile trade policy, the command recorded only five declarations of import with a total of N13,383,104 paid as duty within a period of 13 days.
He said though the command is still recovering from the effect of border closure as traders are yet to return after the reopening to begin their businesses.
However, he urged traders to take full advantage of the 2022 Fiscal Policy measures by the Federal Ministry of Finance, which lifted the ban on export of goods imported into Nigeria hitherto prohibited under item 8 Schedule 6 of the Common External Tariff to optimise the opportunities offered by the policy.
“However, this is subject to the exporters obtaining approval from the Federal Ministry of Finance, Budget and National Planning and payment of 2.5 per cent export surcharge of the present value of the goods,” he said.
“It is worthy of note that the major source of revenue of the Command (import/export) have not been enhanced since the opening of the land borders as directed by the Federal Government of Nigeria as the traders are still bracing with the challenges of having been out of business for over two years,” he said.
Speaking with Daily Sun, the a Chieftain in the Association of Nigeria Licensed Customs Agents (ANCLA) Seme border chapter, Bisiriyu Fanu said: “We have one house in Nigeria that give assessment on the goods we cleared in Port Harcourt, Apapa, Tin Can and everywhere. They have HScode for these goods. What they pay in Tin Can is what they will pay in Apapa, we should also pay in Seme. And without considering that we are coming through third party country, land border whereby we must have paid some dues in Cotonou.
“We pay money in Cotonou, which people in Lagos don’t pay, other logistics they pay in Lagos, that is how we also pay at Seme border here after payment of duty. And Cotonou duty, the transit administrative charges they supposed to charge from us in Cotonou is not what they charge. We pay almost full duty to them at Cotonou,” he said. He said a 40ft, people pay N1.8 million with transport to Seme while a 20ft, they pay N1.3 million, adding that that money being paid is not inclusive in Lagos clearing and If it is not inclusive in Lagos clearing that means it is already extra expenses.
“So when you go through Cotonou and you landed in Lagos market such as trade fair with 40ft less say N6.5 million or N7 million and you come through Lagos port and you landed in Lagos with N6 million, will you prefer N7.5 to N6 million? That is the reason importers cannot risk of going through Cotonou to Seme border,” he said.
He said they prefer to go through Lagos ports and make their profit and go because most of them that pass through Cotonou cannot compete with anybody that pass through Lagos.
He added that Benin Republic government still levies charges on Nigerian transit cargoes passing through their corridor but have reduced the charges just a little from what they use to charge before.
“We still pay them nothing less than 1.5 million to 2 million cefas. They have not abolished the charges. They still levy the charges on ETLS goods.
He said clearing agents do have work to do since the border reopened two years ago, saying people are falling sick and dieing.
“We lost a member last week Thursday. Government never turn any listening ears to us. We have been shouting and crying. In those days, if we are having challenges in Cotonou like this, the Nigerian government will invite President of Benin and the two presidents will sit down for discussion.
“The president will go back and dissolve the administrative charges because we have treaties that say whatever that is passing through your country and you are not using within, you can only collect transit charge on it.
“But still, they collect more or less duty on it. I think the president of Nigeria and Benin Republic are not in good terms because we try all our efforts to make sure that it is done.
The Chairman of the Association of Nigeria Licensed Customs Agents (ANCLA), Onyekachi Ojinma, said the problem of border is man-made.
“What I mean by man-made, the Comptroller General of Customs asked the government to close the land borders with bad policies. How can you come and start containerising goods meant for ECOWAS countries? Normally, we use to have ETLS not ECOWAS goods, which is made in ECOWAS countries that is moveable from Ghana, Togo and Côte d’Ivoire to Nigeria. Nigeria does not containerise their own goods but you are forcing them to containerise their own goods to Nigeria,” he lamented. According to him, now, the country of origin and the buyers cannot afford to move containerised goods, the cost of containerising it is high and they back off.
“Most of them are out of business. That is the policy of Comptroller General. You are forcing another country on what to do but your own, you want to move them there. Before now, people use to move goods with trailers into Nigeria, which won’t take much time. Now, you want them to containerised every goods from ECOWAS countries to Nigeria. Now people move goods with ship and the ship will first go to other countries before coming to Nigeria, which takes months before its arrival here.
“Whereas, thereby taking how many months and this is something we will load in Ghana or Togo in a day to border, you clear and go to its final destination. This is the problem. So most of them are out of the business. Government forced them out of business due to bad policy, importation, which has been booming around the border before, government came with exorbitant price where importers pay multiple duty.
“Importers pay duty in Cotonou, when they come to Nigeria, they heavy duty. You force us to carry containers from Cotonou to Nigeria and what we are paying is high triple what Nigeria is collecting. You deposit like N15 million there before you make a move with the container.
“How can you use N15 million to continue there? Cotonou’s money is bigger than our money now because of bad policy. You use the money for container to move goods and if you don’t return the containers within 15 days, the money is gone. It is due to bad policy. It is the consumers that suffer this at end of the day because importers must make their money back.
“They banned cars and they can’t tell us why they ban cars. Cars are being smuggled in without paying duty. I heard the CG of Customs Ali said they couldn’t meet their target. How can you meeet your target with the bad policy? There is no jobs at the border again,” he explained.