Barring the unforeseen, the enforcement of the ban on the importation of vehicles through the land borders will begin next month. The measure is to shore up revenue, curb smuggling and keep the ports busy. But, stakeholders in the maritime industry and members of the House of Representatives feel the implementation of the prohibition would be counterproductive, reports OLUWAKEMI DAUDA.
WILL the ban on the importation of vehicles through the land borders translate to remittances of more revenue by the Nigerian Customs Service (NCS) to the Federal Government? Will the new policy keep idle officials at the terminals handling imported vehicles busy?
The Association of Nigerian Licensed Customs Agents (ANLCA) believes the authorities should go beyond the implementation of the proposed policy and make the ports friendly for importers for the regime to achieve the desired result.
Through its spokesman, Wale Adeniyi, the NCS announced the prohibition last week Monday.
In a statement, the NCS said: “The ban is sequel to a Presidential directive restricting all vehicle imports to Nigerian seaports only. “The order takes effect from January 1, 2017.
“The restriction on importation of vehicles follows that of rice, whose imports have been banned through the land borders since April 2016.
“Importers of vehicles through the land borders are requested to utilise the grace period up till December 31, 2016 to clear their vehicle imports landed in neighbouring ports.’’
The Nation learnt that the Federal Government placed the ban to stop the loss of over N250 billion yearly in duties and levies that would have been collected by the NCS and other government agencies at the various ports.
A Federal Ministry of Finance official, who pleaded for anonymity, said that the Service alone had been losing N150 billion yearly to the importation of vehicles and other items, including rice, through the land borders.
According to the official, no Customs command at any of the border stations has collected N3 billion in the last four years. Whereas, the Customs at Tin Can and Apapa ports have been generating N1 billion daily. The official said the Tin Can and Apapa commands achieved the feat despite the prevailing recession.
He backed the prohibition of importation of vehicles through the land borders to curb revenue leakages, boost the economy, create employment and make the ports the hub of maritime activities in West Africa.
Though he described the step taken by the government as a welcome development, ANCLA President Olayiwola Shittu cautioned that the ban may be counter-productive.
Shittu said the high import duty on vehicles, which has scared importers away from the ports, may cost the government additional N800 million loss.
According to him, the country suffers economic losses because of the obstacles against trade facilitation at the sea ports.
He identified extortion, poor access roads, high port charges, impunity and violation of concession agreement at the sea ports, as the major problems encouraging importation of vehicles and other items through the land borders.
The ANCLA chief said: “The several millions of naira that are paid daily at the ports and border posts end up in private pockets. With the ban, I think the Federal Government and other policymakers intend to create an environment that will encourage importation through the nation’s sea ports and capture lost revenue.
“It is a fact, that Nigeria loses a huge but unrecorded revenue loss to its neighbours every month. The amount being lost is far higher than the revenue officially reported by government agencies at the border stations.
“A substantial proportion of the nation’s revenue through the cross-border trade are not captured in any government data to revamp the economy or create employment.
“I am of the opinion that informal activities in our ports and around our borders may account for as much as 64 per cent of the nation’s Gross Domestic Product (GDP).”
According to Shittu, Nigeria’s external trade record at the end of last year stood around $140 billion. He urged the government to compel Customs to make their benchmark on imported used vehicles public to boost transparency and reduce smuggling.
Some Customs officers at the ports, Shittu alleged, hide under the non-availability of the benchmark to extort importers, thereby driving them to ports of neighbouring countries.
Auto-importers, he said, should know the totality of duty, levies and terminal charges due on their vehicles before they arrive in the country from the United States (U.S.), Europe and other parts of the world.
He said the ban must be given a human face by the government and its agencies at the ports for it to achieve the desired result.
The auto importers, who prefer the ports of neighbouring African countries, reacted to the directive with mix-feelings.
Some of the clearing agents and Customs officers at the PTML Command, Tin Can Port, Apapa, Lagos, regretted the continuous drop in the revenue profile of the Command. They blamed the drop on the volume of vehicles being imported through the terminal.
One of the clearing agents, Segun Ogunsanu, said the command examined, on the average, a container as against an average of 98 containers that were coming into the country through the terminal.
Explaining the drop, Ogunsanu said that 66,000 vehicles were imported through the terminal last year, as against the 224, 000 and 278, 000 that were cleared in 2014 and 2013 respectively.
He admitted that the prevailing economic situation had adversely affected NCS’ revenue generation capacity at most of its commands, pointing out that the implementation of the auto policy encouraged importation of vehicles meant for the local market through the Republic of Benin, where importers pay only N600, 000 as duty for clearance as against the N2.5 million Customs duties in Nigeria, including charges for Cost Insurance Freight (CIF).
Ogunsanu said: “Cotonou relies only on import and 99 per cent of such imports find their way into our market here in Nigeria. All you need to clear a car in Cotonou is N600, 000 while an importer is required to pay N2.5 million surface duty here. In Cotonou, they do not pay for CIF.”
Investigations also revealed the impact of the enforcement of the auto policy on the importation of vehicles.
Before the implementation, which raised the duty payable on imported vehicles from 20 to 70 per cent to encourage assembling plants in the country, the number of new and used vehicles through the Roll-on Roll-off (RORO) terminals has dropped from 30,000 to 8, 000 monthly.
Some importers and clearing agents told The Nation why they prefer the ports in other countries to bring imported vehicles into Nigeria. They alleged the importation through the nation’s seaports has not been attractive. Besides, they said the cost of clearing was making business unprofitable for them, a development they blamed for smuggling through the unapproved borders.
Beyond smuggling of banned items, the porous borders have also been blamed for the infiltration of extremists, including Boko Haram insurgents and herdsmen.
Nigeria has international land borders of about 4,470 kilometres (2,513 miles) with Chad, Cameroon, Republic of Benin and Niger. It has a coastline of 774 kilometres (480 miles), which are largely unmanned.
Former Comptroller-General of the Nigerian Immigration Service (NIS), Martin Kure Abeshi, said at the 2016 Comptroller-General’s annual conference and stakeholders interactive forum on April 7 in Lafia, Nasarawa State, that out of the 1, 500 identified land border crossings into Nigeria, only 114, covering about 4,000 square kilometres, had approved control posts manned by immigration officials and other security agencies.
“There are over 1,400 illegal routes, which are not manned. This has grave security implications for the country.”
The NCS has Commands at Seme in Lagos; Idiroko in Ogun; Jibia in Katsina; Oyo/Osun in Ibadan; Adamawa/Taraba; Sokoto; Kano/Jigawa and Niger/Kwara/Kogi
Spokesman of the importers, Mr Foluso Adetowubo, alleged that some Customs officers double as duties’ assessors and collection agents.
Adetowubo said that combining both functions expose the officers to graft by creating unnecessary ‘bottlenecks’ to fleece importers and their clearing agents.
He said: “This type of corrupt activity is not seen at Cotonou Port because the government there is alive to its responsibility. At our border stations, some importers also prefer to use smuggling routes because they know that most of the duties they pay to Customs officers goes to their private purse.
“How many serving or sacked officers have been prosecuted since the change of guard at the NSC? Is the management not aware that the officers at the ports are corrupt? What is the authority doing about the illegal activities of some retired officers that are conniving with serving officers to kill the trade facilitation programme of the government at the ports? When is the Comptroller-General (Col. Hameed Ali) going to address the illegal activities of Wharf ‘rats’ and ‘camp boys’ operating at the various Customs offices in our ports.”
Adetowubo urged the government to fix the roads leading into the ports in Apapa and pay adequate attention to other infrastructure.
But the government has been commended by members of the Seaport Terminal Operators of Nigeria (STOAN).
Its Chairman, Princess Vicky Haastrup, said the proposed ban, if implemented, will reduce smuggling and revive activities at Roll-On-Roll-Off (RORO) terminals and other sea ports.
She urged the government to scrap the high import duty regime imposed on vehicles by the authorities in 2013.
Mrs. Haastrup said: “We are confident of the ability of President Muhammadu Buhari to turn the economy around. The earlier ban on importation of rice and now of vehicles, through the land borders is a welcome development.
“We are happy that the President has listened to our appeal to reverse incongruous policies inherited by his administration and which have deprived the local ports of cargoes to the advantage of the ports of neighbouring countries.
“In addition to this ban through the land borders, we appeal to the President to return the import duties on vehicles to 20 per cent from the prohibitive 70 per cent tariff imposed by the former administration.
“The reversal to the old tariff will serve as an incentive for Nigerians to import legitimately through the seaports and make appropriate payments to government. This will boost revenue collection by the Nigeria Customs Service. It will also lead to the return of lost jobs at the affected ports.
“We also appeal to Customs officers at the border posts to support the Federal Government.”
Excited by the ban, PTML Managing Director, Asconio Russo, said the measure will increase revenue of terminal operators as well as end revenue loss by the government.
He urged the government to review the automotive policy as a way of reducing the duties payable on imported vehicles.
Russo said: “We fully support this ban, which we believe is going to halt the huge import of vehicles for the Nigerian market through the ports of neighbouring countries and the hemorrhage of revenue loss by the Federal Government, the customs and private operators.
“We are confident and hopeful that the government may want to go a step further and review downward the level of duties applied on used vehicles to make them affordable.”
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Our grouse against ban, by Reps
Three days after the ban on the importation of vehicles through the land borders, the House of Representatives last Wednesday asked the authorities to reverse the decision.
The lower legislative chamber said the measure would be counter-productive as it would bring untold hardship on the citizenry and encourage smuggling of vehicles by economic saboteurs.
A motion moved by an All Progressives Congress (APC) representative from Sokoto State, Abdulahi Salame, to compel the government to pull the brakes on the ban was adopted by the House.
Salame noted that the Federal Gorvenment had brought hardship on the citizenry by restricting movement of goods and services in the enforcement of its powers as contained in provisions of the Customs and Exercise Act.
Debating his motion titled: “Need to suspend the ban on importation of vehicles through the land borders”, the lawmaker hinted that a similar ban on rice importation by the government in April triggered astronomical rise in the price of the commodity.
Salame argued that policy makers have failed to patronise Made-in-Nigeria goods, especially Nigerian-assembled vehicles, which he described as unaffordable to 80 per cent of Nigerians.
He said: “The percentage of Nigerians who can afford cars has declined drastically, following the decline in the value of the naira, rising inflation, unemployment and high cost of living that have bedevilled Nigeria where over 80 per cent of Nigerians live below $2 a day.
“The Federal Government has powers under Section 18 of the Customs and Excise Management Act to restrict the movement of goods into and out of Nigeria by land or inland waters and to appoint customs stations.
“However, similar exercise of such powers on rice importation through the land borders in April 2016, has occasioned untold hardship on Nigerians, as a bag of rice now sells for between N20, 000 and N23, 000, against N8, 000 a few months ago.
“As it is now, the government has not put in place alternative measures to ensure that Nigerians will have access to cars since it is cheaper to buy cars from neighbouring countries and still generate revenue by ensuring that our borders are secured to prevent smuggling, and also that there will be no job losses.”
Supporting the motion, another APC member from Katsina State, Bababgida Ibrahim, faulted the government’s directive that vehicle importers should use the sea as entry points when it takes only 30 minutes to bring in vehicles from Cotonou, Benin Republic, to Lagos.
Zakari Mohammed (Kwara,APC) urged the government to give human face to its policies.
But Peoples Democratic Party (PDP) representatives from Ebonyi State Linus Okorie countered the motion. He argued that the government has powers under the Customs and Exercise Act to ban importation of certain goods.
He got an ally in Ahmed Kiata (Katsina,APC), who said that such government policies would address fundamental anomalies in the economy.
The motion, when put to vote by the House presided over by Speaker Yakubu Dogara, was overwhelmingly supported by the lawmakers with a voice vote.
