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FOREX scarcity stifling volume of importation

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Nigeria to miss 2021 cargo volume projection
Port operators, especially importers and licensed agents, have expressed worry that the scarcity of foreign exchange (FOREX) is stifling the volume of cargoes entering the country.

They alleged that the Nigeria Customs Service (NCS) is also making plans to increase the current exchange rate for cargo importation from N381/$ to N410/$ amidst the continual fall of the naira.

An operator, who spoke to The Guardian, said with the FOREX scarcity biting harder coupled with the planned exchange rate increase, Nigeria is expected to see a decline in the volume of importation this year as vessels would be diverted to neighbouring countries.

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The Chairman, the Association of Nigeria Licensed Customs Agents of Nigeria (ANLCA), Tincan Port chapter, Muhammed Mojeed, lamented that FOREX scarcity has shrunk cargoes coming into the country.

He said due to the high exchange rate and lack of access to foreign currencies, containers exiting the port have been reduced from 400 per day to as low as 100 per day.

“If you go into some terminals now, you will find out that a terminal that usually drops 400 containers for examination per day hardly drops 100 containers because of the high exchange rate.

“In the black market, it is about N501 to a dollar. This has made it difficult for importers to do business. Also, some factories are now producing at 50 percent capacity because of lack of access to raw materials,” he groaned.

Mojeed alleged that the NCS is contemplating increasing its exchange rate bench value from N381/$ to N410/$. He advised the NCS to stop the plan as the inflation rate is already too high, adding that if it goes ahead to implement the new exchange rate it would affect importation.

The Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala-Usman, had expressed worry over the country’s cargo throughput.

She noted that the volume of cargoes handled at the seaports dropped to 78.4 million metric tonnes in 2020 from 80.2 million metric tonnes recorded in 2019, representing a decline of 2.24 per cent.

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Also speaking, the President of Shippers Association, Lagos State (SALS), Jonathan Nicol, said there is already a cargo volume declined by 35 per cent as a result of stifling economic regulations, which have made investors divert their cargoes to the Republic of Benin, Togo and Ghana.

Nicol said with the current challenges, Nigerians should brace up for harsher economic conditions in the foreseeable future, as the Gross Domestic Products (GDP) would decline. He said the country’s industrial revolution plan is being threatened by the challenges.

He said these would further take away more jobs, as more factories would shut down owing to the scarcity of raw materials.

Also, the National President, African Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Frank Ogunojemite, lamented that the high rate of exchange will automatically facilitate inflation and indirectly lead to non-economic development of the country.

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