By Joshua Yousouph
Stakeholders in the industry have expressed divergent views over the rumoured removal of some maritime agencies such as the Nigeria Maritime Administration and Safety Agency (NIMASA), Nigeria Ports Authority (NPA) and the Nigerian Shippers’ Council (NSC) from the 2023 national budget.
This is even as they have alleged that such a decision is a ploy by the Federal government to make regulatory agencies tax collectors.
Last week, Shipping Position Daily had reported that according to the Ministry of Transportation’s overall 2023 budget proposal presented to the National Assembly for approval, the appropriation bill only captures the proposal of five agencies which include: the Nigerian Institute of Transport (NITT), Nigerian Railway Corporation (NRC) National Inland Waterways Authority (NIWA), Maritime Academy of Nigeria (Oron) and the Council for the Regulations of Freight Forwarding in Nigeria (CRFFN).
In the document that was sighted by our correspondent, there was no mention of agencies like NPA, NIMASA, NSC, hence no provision for them.
Although there is no official statement to affirm the removal of these agencies from budgetary allocations yet, stakeholders have kicked against the move.
In a chat with an Economist and CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, he noted that the removal of these agencies might put more pressure on the private sector. He informed that the decision may not work for some agencies, because the Internal Generating Revenue (IGR) of some agencies might not be able to meet up with the cost of running such agencies.
Dr. Yusuf however advised that the decision should be based on a case-by-case basis where the core functions and capacity of such institutions to raise such funds should be looked at.
He explained that, “it depends on the record of their revenue performance over time. Unlike institutions like FIRS and Customs that are basically revenue generating institutions. We have some of these agencies that are not purely revenue generating although sometimes they charge some administrative fees. They charge some fees for their services, but they are not main revenue-generating institutions. For such institutions, it may create a lot of pressure or constraint for them if their revenue is not able to cover their cost. That may be a problem.
“Another danger is that it may compel some of these institutions to tax the private sector more. This is because if they are not being funded anymore, they have to rely on IGR and they are overseeing the private sector. So they may be charging more for all the things they have been doing for the private sector. That may be putting additional pressure on the private sector”.
On the contrary, the Deputy President of Calabar Chamber of Commerce, Industry, Mines and Agriculture, Mr. David Etim, told Shipping Position Daily that there will be no significant change if the decision to remove these agencies from budgetary provisions is implemented.
Etim informed that the Federal Government is in a financial crisis, hence it is looking for ways to cut down its cost by mounting pressure on regulatory agencies to generate revenue for the government.
He however stressed that these regulatory agencies will have a first charge on every revenue they generate and remit the balance to the National treasury of the Federal Government.
“The fact is that the government is in an equity crisis. So the government is looking at how it would cut its cost. That is the main reason they are doing that. Speaking from the global best practice, these agencies are not even supposed to be revenue-generating agencies, but they have become so in Nigeria. So because they are revenue generating agencies, they should have first charge over their revenue. When they have first charge over their revenue, then they will take out a proportion from whatever they collect and remit the balance to the national treasury as revenue” he said.
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Speaking also the acting General Secretary of the National Association of Government Approved Freight Forwarders (NAGAFF), Mr. Francis Omotosho described the decision as a failure and lackadaisical attitude of the government. He noted that the Federal government is only trying to officially convert regulatory agencies to tax collectors. Omotosho decried that such a decision will have an adverse effect on the masses and the economy at large.
“There is nowhere in the world where agencies that are meant to regulate and guide policies will be turned to tax collectors. The only two agencies that are tax collectors are the Federal Inland Revenue Service and the Nigeria Customs Service. Why on earth should NIMASA which is on safety be taxing us, collecting three per cent and now that they have been removed from the budget, we should be expecting more tax because they would want to continue to fulfil their exorbitant lifestyle” he opined.
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