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Nigeria loses N200b yearly to diversion of cargoes

By Sulaimon Salau
21 December 2016   |   4:30 am
The Federal Government may be loosing about N200 billion yearly to diversion of automobile imports to the ports in neighbouring countries, particularly the Port of Cotonou in Republic of Benin.
Cargo Ship

Cargo Ship

Ports have capacity to take up traffic on vehicle import ban, says Bala-Usman
The Federal Government may be loosing about N200 billion yearly to diversion of automobile imports to the ports in neighboring countries, particularly the Port of Cotonou in Republic of Benin.

The amount, according to stakeholders represents the value of tariff that should have accrued to government through the Nigerian Customs Service (NCS), if the vehicles were imported through Nigerian ports.

The NCS is responsible for collecting revenues for government through duties payable as well as guarding against smuggling activities.

The Guardian learnt that more Nigerian importers are attracted to the Port of Cotonou because of lower customs duty on vehicles and other imports.

As a result, the Managing Director of PTML Terminal, Ascanio Russo, expressed support for the ban on importation of vehicles through the land borders imposed recently by the Federal Government.

PTML is the leading dedicated Roll-On-Roll-Off (RORO) terminal in Nigeria, handling the largest volume of vehicles imported into the country.

Russo said the company’s operations were, however, negatively affected by the astronomical hike in the import duties of vehicles, leading to a loss of more than 80 per cent of its cargo volume.

The hike in vehicles import duty from 10 per cent to 35 per cent and the imposition of an additional 35 per cent surcharge under the administration of former President Goodluck Jonathan, led to the diversion of Nigerian-bound vehicles to ports of neighbouring countries and increased smuggling activities.

The PTML boss, in a statement 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 loss of revenues by the Federal Government, the Nigeria Customs Service 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 for the Nigerian people.”

The Chairman, Seaport Terminal Operators Association of Nigeria (STAON), Princess Vicky Haastrup, had said, “Since the high tariff was introduced, importers have resorted to landing their vehicles at the ports of neighbouring countries and smuggling them into Nigeria without paying appropriate duties to government. This amounted to huge revenue loss to Customs.

“The policy also led to loss of more 5,000 direct and indirect jobs at the affected port.”

The Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala Usman, said the Nigerian ports are capable of taking the import traffic that will emerge as a result of the ban.

She said: “We are very ready to have seamless operations of increased traffic. Some of the traffic that we are seeing dwindling was the function of some of the government policies on importation of new cars. With this ban through the land borders, we will see an increase ports activities and we have put in place mechanisms to ensure that the additional traffic will not form any bottleneck. We always had that capacity, only that it was not utilised, but now that we hopefully will get more traffic due to the ban, we will just up our ante. The terminal operators are keen and they are ready to take up the traffic on vehicle importation through the ports,”

Several other maritime industry stakeholders had, at various times, called on the government to reduce the import duty on vehicles to stem the tide of smuggling and revive operations at Nigeria’s RORO ports, which had suffered the most from the hike in vehicles import duty.