Economy bleeds as cargo imports drop by 50%
Over the years, stakeholders in the maritime sector have been clamouring for subsidised and special exchange rate for the industry. As a nation that relies heavily on importation, the agitation was to enable importers especially manufacturing companies to easily have access to forex in order to bring in raw materials and other goods through the nation’s seaports.
But government turned deaf ears to these demands, instead sponsoring pilgrims with special exchange rate, while importers went through black market to get forex.
Today, cargo importation into Nigerian ports has been reduced drastically to about 50 per cent, even as importers and Customs-licensed agents attributed the reduction to high exchange rate. As the high exchange rate hit importers very hard, investigations also revealed that the Nigeria Customs Service is planning to increase the current exchange rate for cargo importation from N381 per dollar to N410 to a dollar.
The situation has forced most factories to be producing at a very low capacity due to inability to import raw materials, according to operators. Presently, port users said at Tin Can Island Port most of the terminals are becoming empty, and very few consignments are exiting the port.
Speaking with Daily Sun, Chairman of Tin Can Port Chapter, Association of Nigerian Licensed Customs Agents (ANLCA), Alhaji Muhammed Mojeed, said that high exchange rate and other challenges are responsible for the shortage of cargo at the port.
According to him, containers exiting the port have reduced drastically from 400 containers per day, to as low as 100 containers per day, adding that reduction can be attributed to the present high exchange rate and lack of access to foreign exchange.
“The volume of cargoes coming into Nigeria has reduced, if you go into some terminals now, you would find out that, a terminal that usually drops 400 containers for examination per day, hardly would they drop 100 containers now because of the exchange rate.
“Right now, the rate of cargo importation has dropped, there is no way importers to even get money to clear their cargoes. The dollar rate is too high, it is N501 in the black market now. This has made it difficult for importers to carry out importation. Some factories are now producing at 50 per cent capacity because of their lack of access to raw materials. Customs are still saying that they want to increase their exchange rate bench value from N381 to N410 per US dollar. We want to advise customs not to do that now due to the inflation rate which is too high, if the government should implement that now, definitely, it would affect the importation further,” he said.
He also said the challenge of transferring back; empty containers abroad has equally led to increase in freight costs. He hinted that the container scarcity, which hit most international shipping companies, was one of the reasons for the drop in cargo importation into Nigerian port as well.
He noted: “It is only cargoes that are coming in now, a shipment that you can previously achieve with $4,000 has now risen as high as $14,000. How much does the importer stand to gain after making such shipments?
“So, the effect of empty containers not being returned is part of these challenges. However, I believe the shipping companies are beginning to work on it now because most of the abandoned empty containers are beginning to leave our country.” Corroborating this, a former member of Presidential Committee on the Nigerian Customs Reforms, Lucky Amiwero, said the country is going down and people in authority sit down in their hybrid towers and begin to dish out policies without looking at the realities on ground.
According to him, Central Bank of Nigeria (CBN)contributed to most of the problems because it has not been consistent in most of its policies. He said CBN is for monetary policy but they overlap into fisical policy that is meant for the Ministry of Finance, saying that Government needs to call CBN into order because most of their policies are overlapping, which is not the best for any country.
“Now, people are leaving the country gradually. Looking at the exchange rate, when you are going into importation, you are not sure of the stability of exchange rate process and you might be running into problems. People are a little bit confused because the rate is moving up as importation is becoming more difficult because people are not moving out of the country to bring in foreign exchange due to COVID.
He said Nigerian port has a system that is not working due to arbitrary charges from the shipping companies, terminal operators even the Council for Regulation of Freight Forwarders of Nigerian (CRFFN). He said these charges are not supposed to be in the port.
SOURCE: THE SUN