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Nigeria loses N52b yearly to iron, steel smuggling

By Mathias Okwe, Abuja
22 May 2019   |   4:28 am
The introduction of the Destination Inspection (DI) system of inspecting imported goods by the Nigerian Customs Service (NCS) some years ago, is costing the nation a whopping N52 annually arising from smuggled iron and steel products alone.

The introduction of the Destination Inspection (DI) system of inspecting imported goods by the Nigerian Customs Service (NCS) some years ago, is costing the nation a whopping N52 annually arising from smuggled iron and steel products alone.The Galvanised Iron and Steel Manufacturers Association (GISMA), which raised the alarm at a news conference in Abuja, yesterday, said smugglers are taking advantages of the weaknesses in the DI system to smuggle in substandard iron and steel materials into Nigeria.

This, it said, is inimical to the survival of the local industries with many of them already shutting down operation.Spokesman for GISMA, Bello Mohammed, who spoke through a consultant, Mr. Obiora Ifoh, urged the Customs to immediately revert to the former Pre-Destination Inspection system.Under this system, goods are inspected from their origins to confirm that what is in the bill of laden is what is actually in the containers where undeclared goods can be spotted and removed.

The Association also called on the Federal Government to investigate the allegation and take necessary action to stop the revenue leakage for the country, particularly at this time the Nigeria needs every kobo to address infrastructural challenges at home.It cited the Onne and Calabar ports as outlets where these smuggling activities are very steep.

Mohammed alleged: “There is a cartel of economic saboteurs, who import huge volume of containers every week valued at about $5million, which were never captured under the current HS code 7210.30.00.00 – 7210.50.00.00 of Nigerian Customs Service portal. This makes the Federal Government of Nigeria to lose an estimated revenue of about  N1 billion on weekly basis (N52billion annually)  on these smuggled items due to the neglect of pre-inspection of any container coming into the country which was hither-to the practice in Nigeria.
“Abandonment of pre-inspection of goods at the point of entry has created leeway for smugglers to flood the Nigerian markets with substandard products, including steel products. It has also made the nation’s borders and seaports porous, leading to influx of illegal arms and explosives into the country. Such a development is inimical to national economic development and national security.

“It appeared that government security and revenue generating agencies have been either overwhelmed or ignorant of the nefarious activities of the smugglers. The World Trade Organisation is of the view that pre-shipment inspection is very important because it will help to safeguard national financial interest as it will prevent Customs duty evasion, capital flight, and commercial fraud. Pre-shipment inspection was formerly observed in Nigeria but was suspended in 2006 to give way to destination inspection.”

He further noted that “Smuggling could be a factor contributing to the growing insecurity as it has made many companies to liquidate and millions of jobs lost, thereby increasing the vulnerability of the jobless to take to crime as a means of survival, though condemnable. Smuggling of steel products has led to over three million direct job losses and about seven million indirect job losses.” 

Reacting to the GISMA allegation, the Chairman, Presidential Committee on Trade Malpractices, Mallam Dahiru Ado-Kurawa, said his Committee will immediately swing into action and investigate the alleged trade malpractice.His words: “In a short while ago, our committee put up an advert commencing investigation into the importation of galvanised roofing sheets. We have quite a few companies that import such products. We are looking at the imports that have happened. It is difficult, but we have our ways that we can still determine what would have been imported at that time. It is very excruciating, and tedious; it would have been very easy if we have very honest and trusted people safeguarding our interest, determining that these are not the products that are supposed to come in. But when such does not happen, we back track, check the documents, companies and hopefully get to the bottom of the matter.

“We are very sympathetic to the manufacturers of these products because their major investments are involved. Anybody that is going to make anything steel requires a lot of money, and they deserve the response of government, they deserve to be protected, rather than protecting the unscrupulous importers.

“One of our terms of references is to ensure that Nigerian companies remain competitive. The world is very intricate now, for them to be competitive locally, there is a lot of inputs from other countries. With galvanised roofing sheets, thankfully, it is something that I feel, we can contain because it comes in through our ports. We have issues with other products that are very complex that come through neighbouring ports, putting more international flavour into the whole crime of smuggling into Nigeria.