BUSINESS

Stakeholders seek intervention fund

May 5, 2020

Worried by the increase in foreign exchange (forex) rate paid as customs duty on imports by the Central Bank of Nigeria (CBN), stakeholders in the industry have urged the Federal Government to formulate an holistic policy that will enable the country maximise the benefits of its oceans, and seas after the coronavirus (COVID-19) pandemic.

The Association of Nigerian Licensed Customs Agents (ANLCA) Vice President Dr Kayode Farinto said the sector needs the fund to boost maritime trade after the lockdown.

The CBN, he said, needs to lead the government in coming up with a better intervention fund like they have done in the aviation, manufacturing and agriculture sectors to reposition the industry after the dust surrounding the Coronavirus pandemic must have settled down.

“Nigeria must emulate countries like Britain, Rome, America, Australia, Canada, Turkey, Norway, Belgium, Greece, Singapore and India on how best to use the sea to boost the economy.

“Seventy-six per cent of shipping business that takes place in West Africa is done in Nigeria, which means that the country is very important in the continent sea ladder. Maritime trade must, therefore, be of great interest to President Buhari and the Federal Executive Council (FEC) to boost economy. If we get intervention fund from the government and make it available to the people, millions of Nigerians would have gainful employment and that would solve a lot of problem the country would be facing after the world must have defeated the Coronavirus pandemic,” Farinto said.

The CBN policy, other stakeholders said, would have a negative effect on the economy in the post-COVID-19 months ahead if not addressed by the government.

A university don and maritime lawyer who spoke with The Nation said on the upward review of the forex rate by the CBN, Dr Dipo Alaka, said the new adjustment from N326 to N361 constituted a financial burden to them and therefore should be reviewed by the Federal Executive Council (FEC) as part of the efforts to boost the economy after the lockdown.

To boost the economy, Alaka said other maritime agencies must collaborate with the Nigerian Ports Authourity (NPA) and the Nigerian Shippers Council (NSC) and Nigeria Sovereign Investment Authority to develop the framework for establishing the National Single Window, Ports Community System and Scanning services to address the chaotic clearance of cargoes from the port. The collaboration, the lawyer said, must be put into use by the NPA and the Shippers Council in harmonising formalities that impede trade before the COVID-19 struck the world and its economy in the face.

Findings revealed that import and export of goods would suffer a setback if the Federal Government does not address the intervention fund and scarcity of forex that has confronted importers.

It was gathered that export of goods was almost collapsing while fresh imports and other financial obligations of shipping firms and terminal operators that require forex have been stalled, as banks continue to operate skeletal services, which exclude forex trading.

“Without foreign exchange, people cannot place Form M and without Form M, they cannot place orders and this will have a ripple effect on the economy,’’ he said.

Some bank officials confirmed that their operations do not cover forex transactions, as they only deal in deposits, withdrawals, and transfers, among others.

In an interview with The Nation, NSC Executive Secretary, Mr Hassan Bello, said shippers do not have access to forex for imports and exports, urging the the apex bank to address the issue.

He berated a situation where the shipping firms and terminal operators were also unable to meet their financial obligations to the Nigerian Ports Authority (NPA) and the Nigeria Maritime Administration and Safety Agency (NIMASA) due to their inability to access forex.

To boost trade, port operations and ensure unhindered port services, Bello urged the CBN to direct banks to provide forex to shipping firms to enable them fulfill their financial obligations to the Federal Government .

Speaking on the monetary policy measure, the President of ANLCA, Mr Tony Iju Nwabu-nike, said the adjustment by the CBN would have a negative effect on the economy in the post-COVID-19 months ahead.

Nwabunike, who expressed shock at the speed with which the Nigeria Customs Service (NCS) implemented the new rate, said the service should have waited till after the traumatic effect of COVID-19 on the economy had subsided before effecting the new regime.

“I appreciate the fact that the price of crude oil has gone down. I also appreciate the fact that COVID-19 pandemic has grounded the economy of the world and oil-rich countries like ours have been drastically affected.

“But while all other nations that are dependent on oil are giving palliatives to organisations and companies, Nigeria is busy devaluing her currency. This is wrong.

“The effect of the government’s action is going to be enormous on the economy. It is about inflation, unemployment and remarkable increase in crime.”

He said initially, the Federal Government gave the NCS a N1.5 trillion revenue target but was later reduced to about N800 billion because of the effect of COVID-19, noting that with the hike, the Customs would not meet the Federal Government’s adjusted target of N800 billion.

Nwabunike added: “Manufacturers will no longer import raw materials, while importers will not work. This will have a ripple effect on the economy.

“It will bring about $46 differentials. Who will take care of this? The manufacturers would transfer this to the consumers.”

An importer, Mr Festus Solomon said: “One of the two approaches adopted by the NPA to make the port attractive is to have a competitive pricing and tariff regime.

“The agency has conducted a study to determine tariffs and pricing regimes across the region.

“Also, the authority also set in motion last year, the machinery to review the concession agreements after the initial 10 years. We believe the effort is to reposition the ports by ensuring that critical issues around equipment deployment and infrastructure deployment are carried out by all parties, as entrenched in the agreement,” Solomon said.