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Nigerians Decry Smuggling As Import Prohibition List Gets Elongated

By David Ogah
26 July 2015   |   2:36 am
THE Federal Government, recently released statistics of comparative import of some commodities between Nigeria and her neighbouring countries and the conclusion was that, many Nigerian importers of prohibited items are using the Republic of Benin and Togo as a base for their smuggling activities into the country. The conclusion was based on findings that Benin…
Smugglers in action

Smugglers in action

THE Federal Government, recently released statistics of comparative import of some commodities between Nigeria and her neighbouring countries and the conclusion was that, many Nigerian importers of prohibited items are using the Republic of Benin and Togo as a base for their smuggling activities into the country.

The conclusion was based on findings that Benin Republic with a population of 10.32 million imported 845,324,788 kilograms of parboiled rice between January and October 2014, while Nigeria, with a population of 170 million, imported 951,509,600 kilograms of the same brand of the commodity.

They argued that Benin citizens are not traditional consumers of the long grain brand of rice; an indication that rice imported into Republic of Benin most likely has Nigeria as the final destination. They do this by shipping them to that country, from where commodity is smuggled into Nigeria through unauthorized routes. The illegal routes are as many as 170, and are scattered throughout Nigeria.

Recently, the Nigeria Customs Service discovered about 70 warehouses in Kano filled with textile materials (African print) smuggled into the country by some foreigners, in collaboration with some Nigerians.

This was a confirmation of the public outcry by Textile Manufacturers recently that foreign textile materials are being smuggled into the country.

The Director General of Nigeria Textile, Garment and Tailoring Employers Association, Mr. Jayeola Olanrewaju, who spoke on why government intervention fund to the sector was of little impact, identified smuggling as major bane of the textile companies in the country.

‘‘One of the constraints of the Nigerian Textile industry is the smuggling of foreign fabrics that have taken over our market. Only printed fabrics are under import prohibition list. But all others are still being smuggled in, many of them are counterfeited Nigerian products branded as made in Switzerland. So smuggling, faking and counterfeiting is the order of the day in Nigeria and nobody is checking. Therefore, we cannot compete because even though what is smuggled is fake and of low quality, they are cheaper.”

The Bank of Industry (BOI) also confirmed smuggling as one of the major problems of local textile firms, as it blamed the Nigerian Customs Service (NCS), for the influx of banned items, especially fabrics.

‘‘People are not patriotic and are not patronising made in Nigeria textile products. The NCService is guilty of this because they failed to check the influx of foreign textile materials,” BOI group head of Agro processing department, Mrs. Lolo Kadafa said recently.

Nigerians have expressed concern over the increasing rate of smuggling, as they said the country is losing from the elongated list of import prohibition.

They said apart from losing revenue to neighbouring countries where import duties and other tariffs are being paid, many local companies producing the same products have collapsed, as Nigeria is being used as dumping ground for foreign products, through smuggling.

According to stakeholders, unemployment has been the unfavourable end product of the comatose or collapsed companies. To them, import prohibition under any government, since independence has not been effective because of poor fiscal implementation.

They said the situation would remain the same because of porous borders and poor handling of anti-smuggling instruments.

The Managing Director of licensed Customs Agents, Lucky Amiwero, who spoke with The Guardian on the matter, said import prohibition has never been effective because of its defeated aims, due to smuggling activities.

‘‘There are two types of import prohibition. We have absolute prohibition and prohibition for trade. Most of the banned items are under trade prohibition and it is meant to protect primary and infant industries to ensure their growth. This is especially so when they are coping with local demand. If you don’t protect them, they may not be able to withstand competition with similar items produced in areas where production environment is friendlier to make them cheaper.”

He, however, lamented that despite ban and import restriction, these items continue to find their way into the country to defeat the purpose of the prohibition.
‘‘That the prohibited goods still find their way into the country to compete with locally produced items has made the infant and primary industries to close shops. They have collapsed because they cannot compete with foreign products, which are cheaper and preferred. People go them because they are cheap, that is why we don’t have industries here any longer.”

According to the frontline customs broker, countries are allowed to protect their primary industries, under the World Trade Organization “and by allowing these goods to come into the country through smuggling, you are providing jobs in the countries where they are produced, whereas companies are closing shops and promoting unemployment in Nigeria.”

He advocated friendly business environment for businesses to thrive and survive and to be able to compete with foreign products.

“To end this era of smuggling, there is need to provide electricity and by the time that is done, the problem would have been half solved. There must be good and working system in place. The NCS too must be reformed to reduce the cumbersome system of good clearing at ports. The Nigerian government must provide enabling environment for local industries to thrive,” he said.

The National President of Association of Nigeria licensed Customs Agent, Prince Olayiwola Shittu said no country in the world has successfully stopped smuggling, adding that all Nigerians, including the police, military men, the customs officers and others are guilty of the offence.

‘‘There is no country in the world that has successfully stopped smuggling, which has to do with the Nigerian in us, because the Military, Police, Customs are all into smuggling. The rich Nigerians are encouraging smuggling because when there is ban on an item, it becomes expensive beyond the affordability of ordinary Nigerians. But that is the time the demand for it will increase. The more the demand, the more lucrative it becomes. There are more of smuggling activities in the North and it has become a cancer in the blood of the nation. It discourages investment because many local producing companies are closing shops.”

He said the new Common External Tariff (CET) and Import Adjustment Tariff (IAT) were meant to bring an end to smuggling across borders in the West African sub-region

According to him, with the new tariff regime, the NCS could now trace smugglers to a neighbouring country for prosecution.

‘‘ECOWAS trade regime is to tackle the issue of inter-border trade because we are going to have a common tariff. The customs can now pursue smuggling into another country. It is a deliberate attempt to control illegal imports. It will prevent dumping because things under prohibition in one country can no longer enter another country because of the barrier of import adjustment tariff, because you can no longer import things into your country, repackage them under pretence that they were produced in your country for export.”

To Shittu, there is need for deliberate attempt to encourage made in Nigeria goods, including vehicles to stop importation and reduce pressure on the foreign reserve.

The Federal Government had in March released new fiscal policy measures aimed at protecting local industries, by imposing Import Adjustment Tax (IAT) or additional tax on 177 items.

Under the new fiscal policy, import duties were reviewed for a long list of items to encourage development in strategic sectors of the economy, while many others were placed on import prohibition.

The new fiscal policy came into being when Nigeria decided to adopt the ECOWAS Common External Tariff, an implication that all imports into the country would be subjected to rates contained in CET to be operated between 2015 and 2019.

Under the fiscal policy, 25 items were placed under import prohibition. They included poultry products, fruit juice, bagged cement, medicament like paracetamol tablet and syrup, telephone recharge cards and vouchers, carpets and other textile floor covering, all types of foot wears and bags, used vehicles above 15 years from the day of manufacture, furniture, among others.

The NCS said there are over 170 illegal border routes in the country, hence smuggling activities have remained. The NCS, apparently is rather overwhelmed.