“Our trading conditions here in Nigeria are very abnormal, when government is insisting that before you ship in a second hand vehicle, you have to pay 70% duty, how much did you buy the vehicle”
Reverend Jonathan Nicole is President of the Shippers Association Lagos State (SALS). He spoke with Shipping Position Daily correspondent; Dapo Olawuni on the implication of the recent ban on some items through the land borders and other sundry issues.
As a shipper, what are your projections for year 2017?
It is too early for shippers to make projections because the 2017 budget has not been passed, as a shipper, by the time you get the budget you have to study it, look at the areas you can fit in, but now the budget is not passed, it's a far deviation from what we used to have in the early 70s and 80s where government reads budget at the beginning of the year, it takes about three months after that for you to settle down as a shipper and think how to import.
Ahead of the 2017 budget now, we have some items that have been placed under lower duty, we are studying it and we pray that the government does not renege on them suddenly, we also have 151 items that the duty has been raised up, this again would reduce import, because if you have to pay higher duty on a product, then how do you sell it? It is not only the duty, you also pay shipping and terminal charges, you pay transportation, cost of clearing and processing fees, all of these are increasing daily, it's like nothing has changed, instead, things are really going out of hand. In the midst of all these, we are still looking at where we can fit in, we would still appeal to the government to control the cost of doing business at our ports because terminal charges is going up, shipping company charges have just been increased and nobody is talking about it. ANLCA raised the whistle recently that Grimaldi has just increased their charges and it is very unfortunate that nobody can talk to these people and they listen, the Ministry of Finance is not talking, the Ministry of Transportation is not even talking at all, and if the minister of transportation does not talk at all, what do you want the Shippers Council to do? We are worried about these, it's not just about our business, the beneficiary of all these things is the government, we as shippers don't make much profit at the open market, we are battling with smugglers, the same goods you import have over-flood the market through these unapproved routes, we don't blame the smugglers because even if you pay the duty, you don't make life easy. So we feel that for us to make projections, we must first have the facility to get foreign exchange, for now, if you have to source for forex through bureau-de-change, it is a disaster, a lot of shippers are now wait
The Senate has directed Customs to withdraw the ban on vehicles through land borders, what does it portend?
There should be a synergy between the Senate and the Presidency when it comes to the Nigerian people; they are supposed to serve the people of this country we don't expect anything lesser than quality leadership. Right now, there are too many uncertainties in our environment, the CG of Customs said some goods should not come through land borders; specifically, cars and rice, and now the Senate is calling for the withdrawal of that ban. We are waiting and watching, as a shipper, if you horribly say now that you are not bringing in cargo, you will get yourself stuck, and if they don't release the ban, there are so many cargoes in Cotonou that has to come to Nigeria, so how do we get our capital? The market is in Nigeria, what I expect the government to do is to say, as long as you pay the duty you can come in, the bottom line is duty, but people are avoiding payment because the duty is too high, the shipper is always boxed up.
ing to for budget to be passed, but I don't think this would happen soon because already, there is a problem at the Senate.
What is the implication of government's ban on land border importation of vehicles?
The first implication is that the revenue of the Seme Customs Command will go down because it is when you have the goods that you will have revenue. Presently, some shippers are already moving outside the Nigerian market for other countries to sell their goods, our trading conditions here in Nigeria are very abnormal, when government is insisting that before you ship in a second hand vehicle, you have to pay 70% duty, how much did you buy the vehicle. There are lots of goods trapped at the borders, government should relax the ban and get this revenue, what some of the importers are doing now is to sell the cars at Cotonou, how you move it to Nigeria now is your own headache. The Federal Government is providing smugglers an opportunity to thrive; the ban through land borders might not necessarily increase activities at the seaports because the cost of clearing at our seaports is higher.
What significance does the slashing of duty have on some 115 items announced recently?
Every shipper is known for what they import, if it is not your field and you venture into it, you might lose, you might not make profit at the first three attempts, and it is not easy to recover loses in this country. So shippers would be careful how they pick some of these items because there is no guarantee that the duty would not be raised again within three months, Customs Adjustment Tariffs supposed to have a lifespan of about 10 years. In the time of (Former President) Babangida, the customs tariff progressed yearly, but this days, banks don't even want to lend the shippers money at all, shippers are strong people, it is possible to make revenue because we don't deprive the government from making their revenue, we are self-made individuals.
There is the fast track scheme which has been violated by some shippers
Nigerians don't usually make false declarations but when they now saw that if 50 containers are imported, you have to settle customs on these containers, by the time you pay your duty you still have to settle, coupled with all other charges, you cannot make profit on these 50 boxes. So, the next time they import 80 containers, they use the 30 containers to offset settlements, this was how it started, who caused it? If they don't have their way with customs, nobody can try that, our customs sometimes should not even be talking on this- that importer are not doing the right thing, the situation they met on ground made them to do that, if there is no corruption at the port, nobody would try that. The people that actually destroyed our economy are the Asians and government is not even doing anything about it. If an Asian has N20miilion duty to pay, he will bring cash in his boot and go to the area where his goods is and pay one third of the actually duty, the poverty rate in this country would make our people collect this money.
What is your advice to the government on trade facilitation this year?
Back in the days when NPA was in charge of our cargoes, we had a better deal; public holidays we don't pay charges because it is beyond the shipper, if there is any problem with documentation which is not the fault of the shipper, for example when there are system breakdowns, we don't pay because it's not our fault, but today terminal operators collect money for all these, yet they cannot do that in their own country, the more your goods stay in their terminal, the more money they make, everything still bores down to getting the right people to tell them what we want in our country; it should be about trade facilitation. We are calling on the government to try and talk to the terminal operators and shipping companies to be law-abiding. What are terminal handling charges? Ghana challenged it and the government says, if you know you cannot stop it, pack and go, they stopped it and they are still surviving, we can also do it here, but we are just syphoning money from the shippers, why can't all the stakeholders here come together and agree.
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