Dr Kayode Farinto is the immediate past Acting National President of the Association of Nigerian Licensed Customs Agents. In this interview with Oluyinka Onigbinde, he speaks about sundry issues, including the Ministry of Marine and Blue Economy, freight forwarding, and the Nigerian Shippers Council
How do you the current economic meltdown in the maritime industry and the nation at large can be addressed?
The present government is trying its best to put the economy in order, but we have not felt their impact in the maritime industry positively and this is courtesy of the fluctuating exchange rates. The government has not come out categorically to address this issue as it affects cargo clearance and that is why we have different exchange rates. And that’s not too good for the economy. That’s why the economy is not moving. I have suggested several needs for the government to look inward and let us have a predictive exchange rate and this has not really been addressed.
So the maritime industry is actually stagnant. The volume of import is drastically dropping on a daily basis and this is courtesy of the fact that the government is not looking inwardly or addressing the issue of the maritime industry.
Talking about the economy, I know the government is trying its best to look at how to fix the economy. But you cannot fix the economy in the absence of the maritime industry. Everywhere in the world, there is no country that plays with the maritime industry. Where are the policies? There is no policy in place for now. There is nothing to work with. In addition to the fact that we have a somersaulting foreign exchange rate on a daily basis. It’s even hourly now, we have a very stubborn CBN governor and that is not going to help the economy.
Recently, there was a poll online on ‘X’, where the performance of the Minister of Marine and Blue Economy was assessed, about 69% of the people voted for his sack while 15% said he should be replaced and moved to another ministry. Would you want to agree with those who have voted for a sack?
The word sack is too heavy. We should use a mild word which is “replacement”. We need a young, vibrant person that will rejuvenate the maritime industry.
When the Blue Economy Ministry was created, we all said, it is good for the country. We recommended it. But it’s almost one year and nothing is in place. I am one of the people who have been defending it, that there has not been delineation. Up to now, the ministry of marine and blue economy has not really delineated some of the various departments from that of the ministry of transportation. So where are we? Everything is stagnated and we are not more moving forward. The ministry ought to be generating money for federal government now. But they lack ideas. That is why I want to concur with whoever is saying that we need a replacement. We need a young, vibrant person to manage our ministry who will seek for advice, bring in experts and collate ideas and we will move forward. Honestly, we are stagnated. It’s very disappointing.
Some experts have been saying that the Federal Government should reverse the floating exchange rate. Are you in support of that?
I never supported that. And that was why I said let us have a predictive exchange rate. Maybe I should reiterate. What do I mean by a predictive exchange rate? We all know now that the dollar is fluctuating. We are in June now. That is the second quarter. All government needs to do is that for customs clearance purposes and custom operations, between now and the fourth quarter of this year, all custom exchanges should be done with N1,200 per dollar. It’s going to do one thing. The importer now knows that if my goods are coming in the next one or two months, I already know the exchange rate. It’s going to make the importers who are actually on the fence to go and now import. Because we have about 47.5% of importers who are sitting on the fence because they are afraid. And we cannot really blame them. If I go to China now, I buy any product thinking that the exchange rate by the time it comes will be N1,200, before the vessel comes, maybe midway, it has skyrocketed to N1,400. Maybe when the vessel now arrives, it will say it’s N1,300. So it’s not really predictive you cannot really predict, you cannot really have assurance. So nobody is ready to take that risk. So if I am working on bank loan and if there is a predictive exchange rate, I will be able to maximize my profit, know what I think I can do or maybe collate it and say this is what I am likely to make the gain and this is the duty I am paying to the federal government. But where everything is started in secrecy, you cannot really say until when the vessel arrives. That’s why I still want to give the few importers that are bringing cargo kudos. They deserve national awards because it’s not a healthy environment. It’s not healthy and it’s very unfortunate. I’m sorry I’m saying it like this. I’m a member of this party but we have a very stubborn CBN governor.
Recently in a stakeholder meeting, the Nigerian Port Authority accused CBN that it’s policies are driving investors away from the maritime industry. What is your take on this?
That is the truth and that is why I said we have a CBN governor who is very heady and stubborn. For you to be a leader you must be liberal and when it comes to about being the CBN governor you don’t just dictate by the book. The Nigerian economy has defied all economic theories. So we need somebody who is very sound, very pragmatic and innovative to be able to fit in. But when you are bringing in archaic or analog idea, it will not help us.
You want to save Naira, how are you saving Naira? Even the exports that are supposed to assist to empower Naira, the exports are not moving the way they are supposed to move. So that’s why I said it’s unfortunate that when the CBN Act was amended, it made CBN to be too powerful and uncontrollable; that even the Commander in Chief can only advise and that’s not the kind of economy we can run in this country. So the CBN governor’s policy is anti-progressive because it’s not really moving the economy forward. If you look at our rating; talking about logistic performance index from World Bank, between now and September we are likely to see that we are going to fall again because the policies are not friendlier. The policies are not attractive to investors. How can it be attractive to investors when an investor yesterday is hearing that dollar is a particular figure for exchange rate for custom duty, this morning when they wake up they tell him that it has changed. That’s not too good. That does not show that we know what we’re doing. So the policy of this CBN governor is actually driving away foreign investors and that’s why we have not had foreign direct investment in the last eight months that this government has been in place. That’s why the President should look inwardly, rejig the economic team if we must go forward.
By June or July, the governing council of CRFFN will be two years. Recently the panel of inquiry was set up to investigate some issues at CRFFN particularly as regards the Registrar and some other alleged wrong doing that have really affected the council. How will you react to this?
I wouldn’t want to react to it, because there is an investigative panel on board. Let that panel do its job and that panel is not to investigate the governing council. It is to investigate the management team as a result of perhaps write-ups or petitions here and there. So I am not aware or privy to that petition, so I wouldn’t want to comment. But the only thing I want to address the government is that we may not likely to move forward if the governing council is not brought back. We were duly-elected, we bought forms, campaigned for the elections. All government needed to do was that we had a 31-member council, 17 to be appointed by government, all government needed to do is to appoint another 17 members to come and meet us and we conclude our term. If not, it is not possible because we are going to be having a stalemate. You can’t tell me now that government will appoint another set of people tomorrow and you want to conduct another election when we are not even concluded our term. A lot of people are in Court because of that. We have written personally to the Attorney-General to look at the fact that the Board for the Council for the Regulation of Freight Forwarding is a peculiar board to other board. It is a different board. It is peculiar to our nature that is the operation we do and not like any other board where you just hire and sack. Because out of the 31 members, 15 are professionals and practicing freight forwarders. So government must think of that and that is why we are stagnated. The freight forwarding industry itself is not moving. The issue of monitoring is not there. The issue of sensitization is not there; the issue of empowerment is not there because there is no governing board. There is little or nothing that the management team can do. It is the governing board that will bring the idea for the management team to drive. But it has been stagnated. I am not even sure the Minister for Marine and Blue Economy is even aware. That is why I said we need a rejig in that ministry.
What is your take on the introduction of the 1% freight stabilization fee on shippers by the Nigerian Shippers’ Council?
It is important for us to be able to synchronize and synergize. Like this new law that they brought out, it’s not even a law, they call it users guide. If a freight forwarder had been a member of their board, that person would have advised them that this negates Act 17 of 2007. It will amount to double taxation. But no freight forwarder is a member of either the management team or their board. That is why Shippers Council in order to generate money, they are still including freight forwarders. This is what they want the National Assembly to give consent to. How can you really scrape our heads in our absence? When you talk about Shippers Council, its responsibility is to protect Nigerian shippers. We are all after is the cargo and who does the clearing? It is the freight forwarders. Where there are issues to be discussed, you need a seasoned freight forwarder’s experience to advise Shippers Council so that you can move forward. That is why somebody who is a seasoned freight forwarder must be a member of the board of Shippers Council. That is how it should be. There are other issues that I expect the Shippers Council to talk about. We have the Saturday and Sunday services they are not talking about. We have the issue of container deposit which is lying fallow and nobody is talking about that as well; there are too many issues that affect the cargo.
There have been issues with the container deposit where the shippers took the Nigerian Shippers Council to court at one time.
There will always be issues and because, there is no legal framework. That is why we need a legal framework. If this bill is passed to the law, nobody will go to court because if we go to court now, it will exact to futility. Once the Shippers Council is pronounced as the port economic regulator that means there is a legal backing.
But your call is not for them to be Port economic regulator?
No not at all. Let’s separate the shafts from the grain. That will be delving into the issue of port concession. What is your interest? What will NPA be doing? Handle your responsibilities. What is your business with concession of the ports? It’s not your business.
They are fighting for concession of the ports and the implementation of single window.
They can’t do that. Nobody can handle the single window except Customs.
I heard the NSC is empowered by their Act to also regulate the freight forwarders?
The freight forwarders are to be regulated by Council for the Regulation of Freight Forwarders and that is the only law that has spoken about regulation of freight forwarders. It was enacted in 2007. There is no section of Shippers Council Act that empowers them to do that. You can’t be in the room you want to see what is happening in the park. What is your business? Even the Nigerian shippers you have not protected them enough from double taxation. If you write to Shippers council now, they will say they have received your letter, they will inform you duly. They talked about arbitration and I told them that because in that bill I said we cannot achieve arbitration without bringing arbitration clause. If we want to do it, let’s do it well. If you say you want to go for arbitration and I say I don’t want, will you force me? There must be room for arbitration clauses. They just muddled everything because they want to generate revenue.
The NIMASA floating dock has remained moribund. What do you think the government can do to rejig it?
What the government needs to do is to bring in private investors where the government can take 30 percent of the share. So it will rejig it and encourage private participation where private investors will bring in their ideas. It’s unfortunate talking about NIMASA, we have a particular money called the Cabotage Vessel Financing Fund (CVFF) which has been lying in an escrow account, unattended to. It’s unfortunate the government has dipped their hands into that money and spent it, which is making our indigenous shippers to going into extinction. Nothing has been done about it. We have Master Mariners who are Nigerians, who can add value. All they want is empowerment. Even all these ones, you can call our master mariners, to give us idea on how to make this thing viable and you will see that many ideas will come up. But it’s unfortunate anything about the federal government is always like this. That is why we need private participation. That is the only thing that can drive and advance it. If not, it will be a white elephant project. It will be lying fallow with no value added.
