Amidst the hustle and bustle of Nigeria’s ports, a concerning trend is emerging, with many ports standing deserted, devoid of their usual activity. Investigations conducted by Saturday Tribune have shed light on the underlying cause of this phenomenon: the Forex crisis, which has rendered importation an exceedingly expensive endeavour. Customs brokers and other stakeholders within the port ecosystem have raised alarm bells, warning of the potential paralysis of port activities in response to the frequent upward adjustments of the exchange rate for cargo clearance. At the forefront of this outcry is Mr. Frank Ogunojemite, the National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON).
Ogunojemite has called upon freight forwarders to join forces with Civil Society groups, the Nigeria Labour Congress (NLC), and Trade unions to address the prevailing economic challenges plaguing the nation. Expressing his dismay, Ogunojemite attributed the current state of affairs to the Ministry of Finance and the Central Bank of Nigeria (CBN), lambasting them for their failure to maintain control over the nation’s currency, the naira. He underscored the dire consequences of the continuous upward revision of Customs duty exchange rates, warning that it would exacerbate the already severe hardships faced by Nigerians, particularly the masses who bear the brunt of such economic policies.
Economic experts decry Nigeria’s import policies.
Echoing these sentiments, Mr. Chukwudi Onofile, a prominent clearing agent, likened the management of Nigeria’s Economy by the CBN to that of a Banana Republic, characterizing the exorbitant hike in Import Duty as detrimental to import businesses. Onofile highlighted the repercussions of such policies, citing the mass exodus of importers from Nigerian ports as evidence of the adverse effects on the economy. He emphasized the loss of jobs for clearing agents and the subsequent economic downturn, warning of dire consequences if corrective measures are not promptly implemented.
Similarly, Mr. Lucky Amiwero, the president of the National Council of Managing Director of Licensed Customs Agents (NCMDLCA), decried the rising levels of Poverty resulting from the instability in the exchange rate. He underscored the importance of a stable exchange rate in fostering predictability and transparency in import transactions, lamenting the current unpredictability that has left many individuals grappling with financial uncertainties. Adding to the chorus of grievances, Mr. Eugene Nweke, a former National President of the National Association of Government Approved Freight Forwarders (NAGAFF), shed light on the challenges faced by importers in meeting their financial obligations amidst the fluctuating foreign exchange regime.
Import tariffs soar, strain economy and consumers.
Nweke highlighted the Erosion of trust between Nigerian importers and their foreign partners, attributing it to the inability of importers to honour their financial commitments due to currency fluctuations. Against this backdrop of economic turmoil, the cost of clearing goods at Nigerian ports has soared to unprecedented levels, with importers bearing the brunt of exorbitant tariffs. A cursory examination reveals the staggering cost implications, with the clearance fees for various vehicles reaching astronomical figures. For instance, the cost of clearing a 2019 Toyota RAV4 at Apapa Port stands at a staggering ₦9,570,000, a sharp contrast to the ₦4,050,000 required for a 2004 or 2014 model of the same vehicle.
The repercussions of these exorbitant Tariffs extend far beyond the realm of importation, permeating every facet of Nigerian society. The increased cost of goods trickles down to consumers, exacerbating the already precarious financial situation faced by many. Furthermore, the dwindling activity at Nigerian ports threatens to disrupt supply chains, hampering Economic Growth and development. In light of these challenges, urgent interventions are needed to address the root causes of the Forex crisis and mitigate its adverse effects on the economy. The government must take decisive action to stabilize the exchange rate, restore confidence in the economy, and create an enabling environment for businesses to thrive.
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Additionally, measures should be put in place to support importers and mitigate the burden of high customs duties, thereby alleviating the strain on consumers and fostering sustainable economic growth. As stakeholders within the port ecosystem continue to sound the alarm, it is imperative that concerted efforts are made to address the underlying issues plaguing Nigeria’s ports and economy. Failure to take prompt action risks exacerbating the already dire economic situation, with far-reaching implications for the nation’s prosperity and well-being.