Dr Eugene Nweke is the Secretary of the Customs Consultative Committee and also the Head Researcher for Sea Empowerment Research Center (SEREC). In this interview with Joshua Yousouph, he bares it all on the controversies surrounding the fluctuating exchange rate for Customs duty. He speaks on other sundry industry issues too.
What do you believe is the underlying motive behind a series of incremental changes in the Customs exchange duty rate since June 2023?
What you see happening is to let you know that the last administration ran this country aground. We were only sitting on a time bomb. This administration only made us see that it was a far cry from what we are seeing from the outside and the President who has the intention to revamp this system has to fall into this very pitfall. It’s about pitfalls. You were here in Nigeria when the CBN Governor Emefiele was punishing us by just borrowing money and squandering it and now we are made to suffer for it. We were thinking we would get it back from foreign exchange when we export our crude oil. So if you watch an economy, you will notice that the balance of trade has always been down. We have been attempting for it to come up, there was no time it was at equilibrium. So what do you expect? Emefiele used so many dollars to print Naira; he hoarded it and gave it to his group. How do you reconcile the fact that in your foreign exchange, the CEO of Banks will come to you and you give this money to them instead of letting the trading public have access to it? Rather they use Bureau De Change agents to make money and return back the Foreign Currency to CBN after settling them. The next thing he did was to convince the government to go ahead to deny the 41 items from Forex. You ask them to source for Forex themselves and when they do so, they come back to the bank to open Form M.
How do you envision these fluctuations affecting the stability and growth of Nigeria’s international trade sector in the long term?
See, the problem we have now is that it is difficult for the government right now to heed to the call and directive of World Trade Organization’s Director General; Ngozi Okonjo-Iweala who has insisted on telling the whole world that global international trade is declining. The government should give support to the international traders, so that trading in each country will go up and stabilize. If international trade goes up and stabilizes a bit, then global currency exchange will improve. It’s not as if other countries don’t also have their own part of the global economy challenges. But we were worse hit because of bad management and high tolerance to corruption over time. So what I will advise is how do we help the international trader? How does the government show them support? Do we now run to African Development Bank or any institution in order to encourage those shippers, especially those within the manufacturing industry? The government should help them; it’s not easy. Some of them are running in the country at a very high cost because of the high cost of production. We are making noise about the African Continental Free Trade Agreement (AfCFTA). Can we produce goods that can be exported to other African countries with competitive prices? No! Nigerian goods are not competitive. There is a need for a revamp.
Your organisation’s bulletin suggests that the CBN may be experimenting with the Nigeria Customs portal as an alternate transactional portal for the Nigerian Stock Exchange market. Can you elaborate on this assertion and its implications for trade transparency and regulation?
In the past 30 years, have you ever heard that any government, even the military, just woke up without giving prior notice to the commercial trading community and just changed the Customs duty? Have you ever heard about this? Never. In international trade you give traders prior notice or send a circular. The problem we’re having is that when we tell our client that the Customs duty has been changed, some of our clients are accusing us that we the freight forwarders are the ones manipulating it because there was no circular to that effect. Now every midnight we see that the duty has gone from N1,400 to N1,500. The next day, it was gone again and it was only midnight. Who and who is trading at that midnight? By the provisions of International Chamber of Commerce for the documentation of Customs procedure, which is the Unified Customs Procedure 600, even the CBN has a document called Form M. In this Form M the lifespan is 90 days, that is, three months. That means within three months, if I go and import, I am privileged to take my business based on the value I opened the Form M.
But if I go to import, I haven’t opened my form M at N800 to $1, then the goods now come back to Nigeria and I want to go and clear the dues. They tell me now tell me that it has gone high and will not use that form M value. What they are going to use for me is what is in the system and what is in the system now is N1,400; from N800 to N1,400. That means they don’t even have respect for that value form M, which is an internationally recognized document as far as international trade is concerned in Nigeria. No, nobody does things like that. The understanding of the World Trade Organization under the business implication is that once a contract has been established at a particular amount and money has been moved. When that amount has been moved and the shipper, that is the exporter of the product, receives it and ships it, you open an invoice that stands at that exchange rate. You are not helping trade, predictability, stability, fairness in trade, and competitiveness. It is not the fault of Customs because their duty is to enforce the policies. So the finance ministry and the CBN is our issue here. Maybe there is a need for us to actually move the Customs from the Finance ministry and take it back to Trade so that issues on monetary policies and fiscal policies will stand on their own separately. Customs deals with trade. So putting it under finance is confusing the whole idea of having fiscal policy differentiating it from monetary policy when it comes to administration. It’s causing a whole lot of confusion.
You also proposed revisiting the adoption of the Chinese Yuan as an alternate foreign exchange currency for international trades of Chinese origin. How do you anticipate this policy shift would address the challenges posed by the continuous increments in the customs exchange duty rate and the scarcity of USD dollars?
Today, if the Federal Government wants to send shock or fear waves into the international trading environment let it make a pronouncement that henceforth every trade depending on the country you are trading, their currency should be the foreign exchange trading currency. Minimum of 80% of international trade that comes into Nigeria either raw materials or finished product is from China. I don’t need to tell you this. If we say today that every product coming from China should be traded with Yuan, those who are hoarding dollars will quickly release them because they have one or two goods to import or do with Chinese products in China. Virtually all of them have business with China. They will bring out the dollar and the dollar will come down on its own. We should stop patronizing this Dollarization as opposed to our own Naira. That is our problem. Is it possible to go to America and they issue you a contract in Naira? Every local contract should be ‘Nairalised’. Instead of allowing us to become slaves to the use of dollars, we can exchange the use of dollars to the Chinese Yuan. We cannot control living under the monopoly of dollars. Dollarization has been an issue in Nigeria, in fact, to the extent that even locally here, a certain contract procurement process is being done in dollars. Why should it be in our own country? Why do we prefer dollars over our own, even in local contract execution? Whether you are Chinese or what, we should give you contracts in our country in Naira. These are some of the issues. This is why I said that the National Assembly also failed in their duty. Government should be bold to make certain pronouncements. Send the shock waves into the trade environment and let them sit up. If we want to go to the UK, let’s use the Euro. We are a sovereign nation and should not be controlled by other people’s currency.
How user-friendly do you find the Customs e-auction portal for auctions? Are there any challenges or improvements you would suggest to enhance its usability and efficiency?
The idea of automating the auction process is for transparency, security, and ease of clearance. But that does not remove the fact that computers are about garbage in and garbage out. The e-auction portal appears very beautiful, but if I go by the number of petitions from different bodies, individuals and organizations, to my office as the Secretary of Customs Consultative Committee, I believe that something is wrong. And from CCC’s point of view, we have also made an effort to ask the authorities to look at what is happening in that place. I read the Customs PRO saying there is no issue, but I can tell you that we have also been able to really investigate and they’ve come up with their own investigation. So, nobody should deceive anybody. There is this need for improvement. Somebody should supervise effectively, and monitor effectively what is happening in that place. Our advice to the CG is to please put an eye of supervisory attention in that place and treat that issue. As a secretary of the CCC, there are things I should not say openly about a body I am consulting for. But in the eyes of truth, we will go inside and address some of these issues. The digital platform is a laudable idea and it has improved from what it was under the former CG (Alli), but there are still some things that need to be called to order. That is just what I will say.
What are the roles of the Customs Consultative Committee and its significance in facilitating trade?
The CCC is a creation of the World Customs Organization that deems it necessary that, for us to have a global custom administration, there is need to engage people, then government partnership and pursue political support. That is what’s called the 3Ps. The question here is, who are customs global partners? Who are their trading partners? Then the Customs should start a private sector consultative group. So CCC falls under the private sector consultative group created by the WCO. So the name CCC now came up, which is called the Customs Consultative Committee. We are not consulting for any other person. Our duty is to stand in between Customs and its stakeholders like this issue of policies and auctions; people report to us. We look at it critically and put advice to Customs because in the CCC administration, the C.G. of Custom is the grand chairman. Just like Dikko when he created the CCC under my supervision, I can assure you that we don’t do anything without giving information. Most times there are issues that will be thrown back to us to review because in CCC all the arms of business interests are represented from manufacturing to trucking, those involved in service provision and what have you and individuals that imports volume.
It is not the duty of Custom to attend everything by way of the letter. This is the job of CCC to do. So that Custom will have enough time to plan its anti-smuggling operation and revenue collection. Any issue that has to do with trade policy issues that will impede on trade, we will discuss it, agree in one mind and get back to Customs for Customs to act on and make corrections.
What strategies is the committee employing to ensure effective communication and cooperation between the committee and customs authorities to streamline trade processes?
The chairman has been away for lesser Hajj, but he is back. In the next few weeks, we will be having our breakfast meeting bringing all the people together that will eventually form the larger membership. The CCC comprises 32 members from across the nation in all business interests especially those that have one or two things to do with Customs in Nigeria. So the grand chairman of the CCC (that is the CGC Adewale Adeniyi); by the time he appoints some other people that will apply to him or people believes that we need their input to work with us in the CCC. Then that appointment will be effected and then we will take it up from there. This is it, ours is to recommend. Before Easter, I believe that will be wider. CCC will be set up to work as a committee while the Board will stay aside to allow the CCC to hold its quarterly joint meeting and monthly executive meeting.
