In the concluding part of this interview with Oluyinka Onigbinde, a former acting National President of Association of Nigerian Licensed Customs Agents, Kayode Farinto speaks on sundry maritime industry issues.
Looking at the current situation at some terminals, we see a high influx of ‘accidented’ vehicles. Why is this becoming a trend and why are good vehicles no longer being imported?
There’s just one point. The only answer I will give you is the fact that the government policy on revenue collection for Vehicles is too harsh. Let’s look at used vehicles. We are already collecting duty on used vehicles—what’s the need for the 15% levy? I’ve said this at several forums that government must look at this. But you know, every government has its own policy. The policy of Bola Tinubu is to make sure that we have new vehicles in place—whether electric or any of these newer models. Maybe that’s the position of the government. But if you are now bringing in new or non-accidented vehicles, the procedure and duties you’re going to pay will be too astronomical. That’s why people are bringing in the accidental ones and applying for ‘840’. The 840 process involves inspection by the Controller to verify the vehicle is truly accidented. If the duty on a normal vehicle is $4,000, because it’s accidental, they’ll give you rebate and say go and pay $2,000. So the owner goes and pays $2,000 and goes to repair the vehicle. It’s all because of government policy. If government will remove the 50% levy and will look at the other issues and other taxes on used vehicles, you will see that in Nigeria nobody wants to ride in an accidented vehicle. This is because it always has its disadvantages. Out of all the 100% accidents on the road, 35% is contributed as a result of accidented vehicles. This is because most of the accidental vehicles have actually had their chassis affected. When an accidental vehicle is moving on the road, the moment that vehicle is on the speed limit of 100, it starts vibrating and it can cause commotion, particularly these ones that are commercial. Before you know it, if there is any little impact, everything will just scatter. Government should review that 50% levy.
Are you saying the 50% levy introduced under the President Jonathan administration to discourage the importation of used vehicles should be scrapped?
Government should review that 50% levy. I feel that the 50% levy was done under Jonathan to discourage the importation of used vehicles and encourage new ones. But whoever is telling you that a used vehicle does not have value is wrong. That is why legal notices give room for what is called wear and tear. And by virtue of the wear and tear, by the year of manufacture, it starts progressing by 10% devaluation; that is wear and tear. So if it is not valuable, what do you mean it does not have value? If a new vehicle is $25,000 and you are bringing in the vehicle, it will just apply the legal notices. But if a vehicle is $5,000, then do the calculation. Does it still not have value? Do you know that the lowest target of any vehicle you bring in you are going to pay duty of 20% minimum duty? That is about N7million to N8 million. There are some technical issues that we should be very careful about. What we should be saying is that government, please bring down or cancel the levy on used vehicles. Let us reduce the rate of duty on used vehicles because fingers are not equal. Before now, Nigerian graduates could afford used vehicles; convert them to Bolt or Uber, and make a living. But now, it’s very difficult. That’s why government must listen in this area. This is the only area that we are pushing that the Government of Asiwaju Bola Ahmed Tinubu should listen to. We even learned that most of the banks are now going for Nigerian used vehicles. Even the House of Assembly is going for Nigerian used vehicles because it is very expensive.
President Tinubu just marked two years in office. How would you assess his policies in the maritime industry so far?
The first thing I will tell him is that, I am one of those who read him wrong. But when he started implementing policies, things became difficult. But even at that, by the end of his tenure, Nigerians will appreciate what he’s doing. Because what he is building is an institution. Yes, there is poverty. There is hunger in the land, there are difficulties. But we’ve been living in borrowed hopes. Most times, under Buhari, dollars were given to people going to Saudi Arabia and Jerusalem, while importers didn’t have access to dollars. When the economy crashes, let market forces determine the dollar. There’s no preferential treatment to whoever is going to Saudi Arabia or Jerusalem. That’s why the economy is stabilizing. People will always have their opinions. But so far so good, the President is implementing policies that will give us a very robust maritime economy. It now depends on the various heads of agencies.—how well they read his body language. Take the rice policy, for instance. There were serious difficulties with the availability of rice. By the time the various agencies will now implement these policies, they will set in booby traps there to the extent that how many containers of rice were eventually imported. They start bringing in measure of do you t have the milling machine, and this was not the directive of Mr. President. The directive of Mr. President was to bring in your rice and flood the market. By the time we have enough rice in the market, it will crash the market. But unfortunately, bureaucracy set in and the people who are actually making money still use their influence to make sure that they are set for this policy. So far, so good, the man is doing well. Now that he has clocked two years in office, he should look at it and review his policies. And if I were him, I would change all the Ministers.
He recently appointed a Managing Director for the Regional Maritime Bank. What are your thoughts?
This is a bank that has been in place for the past 16 years and that bank now has about $500 million for take-off. And that bank, if you study the principles, they are going to be involved in infrastructure, fleet buying and all. So everybody that is a stakeholder in the maritime industry can have access to that kind of fund. That is another Cabotage fund in disguise.
Do you see anything good coming out of the bank being a bank not just for Nigeria but for MOWCA member-states?
Our problem is that when there is a change or a new policy, people are always pessimistic. Let it start first. Whether MOWCA will influence it or Nigeria, let us let the bank kick-off; let it start. By the time the bank stabilizes, you can now assess it and tell the man that is in charge that you are not adding value and this is not the intention of Mr. President. I’m one of those that believe that this is a very lofty idea. For Mr. President to even approve it, I give him kudos for that. We had issues of infrastructure here and there, which this maritime bank can look into and finance. So it’s okay by me.
You’ve made a strong case for the disbursement of the CVFF. The Minister recently assured disbursement before August. Do freight forwarders deserve a share?
That is where we are making a mistake. The CVFF is not for indigenous ship owners alone. Freight forwarders too can access it. It’s just that, have you applied? The answer is no.
But no freight forwarder has contributed to it?
If it is an issue of contribution, you can’t say that. How was the money generated? 2% levy from ship owners. So can there be anything shipped when there is no cargo? So you can’t say directly or indirectly that we have never contributed. We have contributed. It may not be a direct contribution. It’s an indirect contribution. Whether you like it or not, assess the years which money has been going to that account and look at how much cargo has come to Nigeria. Because if there is no cargo, what is the vessels coming to do? So freight forwarders too can access it, but we have not really applied. I will only say that if the government is now serious to disburse it by August, as they have said, I will clap for them and I will be delighted, because it is very unfortunate that our indigenous ship owners have gone into extinction. Even the people that may be beneficiaries of this money now will be new generation, not the old ones that started it. So it’s good to be disbursed. But that’s one thing about life. Some people will always be pathfinders, while others will follow that route. So I hope and I pray that government in magnanimity will disburse that money on time. So that by this time of next year, we will start reviewing the indigenous ship owners asking what value have they added?
Some people say the CVFF conditions—like the two-year moratorium and eight-year repayment period—are too strict. What’s your take?
No, it’s okay. Two years moratorium means you’re not paying anything in that period. That’s good. Whatever you accrue within the two years, then the third year you should be able to start paying. And we are talking about vessel, not the car. So it depends on how you do your own business. So eight years is not too much. It’s a very good one. You will spread the money within that period.
Do you think it is appropriate to extend this support to boat operators?
Of course, it’s under Cabotage it is just that the boat operators usually they are carrying passengers. And these are the people that are still working in the maritime industry. It’s good for boat operators to be included and that is even when the NIWA will be able to monitor our boat operators. Most of the boats are outdated. They are boats that are manufactured during the medieval period. The new boats now should be able to have lights when they want to work at night. Have you ever been on these boats at night? They use torchlights. It’s as bad as that. Have you ever seen their life jacket? They are long expired 10 years ago. And they are still being used on our waterways. So, if they are given this facility, they will be able to bring new boats with life jackets and know that they must add value. So, it’s good. I support it.
I’d like you to touch on the issue of the Cargo Tracking Note. There seems to be a delay in its implementation. What’s your current position on that?
I’m one of those that said that we do not need cargo tracking note. Because we need to sit down at the table and define who pays for the cargo tracking note. What is freight? And what are the components of freight? We are bringing cargo tracking note now, it will be additional money on the cargo. And it looks as if it was a period where Buhari was looking for a job for the boys. Shippers’ Council need to do a very thorough job, because their responsibility is to protect Nigerian shippers. You are bringing cargo tracking note now. It’s going to be additional money on the importer. We should define who pays for the cargo tracking note. Or, let us look for a legal framework to make our cargo tracking note not to be another money or cost. But let it be incorporated in freight charges. This has been my advocacy. If it’s not incorporated in freight charges, that will mean that another department will be created. They will say cargo tracking, blah, blah, blah. Somebody will now head it and they will start collecting money on the same cargo. It is wrong. And I always advise Mr. President not to append his signature to it.
Recently, we heard that CMA CGM has removed container deposits. What’s your take on that?
I’m not surprised. In the last four years, we’ve been battling with the Nigerian Shippers’ Council on the issue of Container deposit. What is going to replace the container deposit is insurance certificate or insurance premium. CMA CGM is just working ahead and I like that. By the time the policy is implemented, the Shippers Council’s Act is reviewed and signed now. And Shippers Council now brings in that law, no Nigerian shipper or owner should charge a Nigerian container deposit. By then, CMA CGM is already sitting comfortably. I commend them for that because that is where we’re going. It is a charge that they have been using to exploit Nigerians. Some people have made billions of Naira from it, and they have even not worked. And they are just going to the bank to take the interest on the container deposit. If you have consignment now, there is no shipping company that will give you your container deposit back under one month. Meaning they are trading with your money. You must be able to give me this percentage of whatever you have made on that one. But because they see Nigeria as a country where there is no law that is hindering them. So if CMA CGM has done that, I doff my hat for them.
What do you say about the argument that container deposits are the only reason freight forwarders return containers?
No. There will be insurance. A container company that if you want to clarify, they will say go and bring GIT insurance that is Goods in Transit insurance. This may replace container deposit. All the shipping company will have to do is that, okay, Lekan Nigeria Limited, or Yinka Nigeria Limited is going to operate, go and give us a GIT that covers a period of one year. And when I now approach an insurance company, give me a GIT, they will say for what? We will discuss it. Once I have that GIT insurance, I give it to Lekan Nigeria Limited. So any cargo or any consignment that I take there and the empty container, I do not return it, they hold my insurance company. My insurance company knows how to get back to me. That’s how it’s supposed to be. And you, that takes that cargo the responsibility lies on you to return back somebody else’s empty container.
