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Increase in customs duty threatens three million jobs

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PHOTO: fivestarlogisticsltd

PHOTO: fivestarlogisticsltd

Operators want N197 per dollar benchmark

Loss of about three million jobs is real as government’s implementation of the 43 per cent increase in customs duty in the country takes its toll.

Agents and freight forwarders who are now closing shop due to poor patronage, say the increase in duty has begun to hit hard on importers, who also have to cope with the burden of the new exchange rate of N313 to $1, up from N197 to a dollar last year.

The Nigeria Customs Services (NCS) increased duty twice in a month, in line with the new Central Bank of Nigeria (CBN) flexible foreign exchange (forex) rate policy. The first time was from July 1, when the customs directed that the dollar rate used for calculating import duty be increased from N197 to N286 to a dollar. Again, effective August 1, the calculations increased to N313 to a dollar.

Indeed, it is estimated that about three million jobs in the industry are now being threatened, just as many operators are considering re-locating to neighbouring countries with friendlier policies.
The Guardian learnt that the operators are currently groaning under intense hardship and are considering dialogue with the CBN and the Ministry of Finance.

The National Association of Government Approved Freight Forwarders (NAGAFF) lamented the stifling of its members’ businesses due to what it described as the “seeming irrational” exchange rate of N313 to $1 being used for imports assessment in Nigeria.

Similarly, agents under the aegis of the Association of Nigerian Licensed Customs Agents (ANLCA) are groaning under the new exchange rate pressure.

President of ANLCA, Olayiwola Shittu, told The Guardian that the policy was capable of truncating the gains made in the maritime sector if not reversed, warning that members might be forced to withdraw their services.

Against the widely reported plans to shut the ports, Shittu said his group was not planning any such action, but the members might withdraw their services when businesses are no longer forthcoming.

According to him, it’s unfair to compel Nigerians to open form ‘M’ for imports at N197 to $1 “and now force them to pay N313 after the goods have been shipped.
“Government should allow those who raised ‘form M’ at N197 and travelled to calculate their duty at N197 when the cargo arrives. It should not be that somebody opened ‘form M’ at N197 and travelled, and when the cargo arrived, you asked him to pay N313. From where will he get the money?”

National Publicity Secretary, Stanley Ezenga, said the aggrieved stakeholders would make appropriate representation to the government through the CBN and urge the benchmarking of the exchange rate.
“We indeed advise the Minister of Finance, in consultation with the CBN governor, to benchmark the exchange rate for customs duty purposes. It is legal and legitimate in favour of trade and the society in Nigeria.”

The President, Shippers Association, Lagos State, Jonathan Nicol, said the situation was already posing a threat to the jobs of over three million workers in the sector.

Nichol noted that with the new forex regime, shippers are paying more duty while the costs of goods are skyrocketing.

Meanwhile, the NCS has absolved itself of blame for the duty hike saga, noting that the CBN is the agency prescribing the rate for foreign exchange which is used to charge duty.

The Comptroller-General of Nigeria Customs Services, Col. Hameed Ibrahim Ali, assured that the agency would continue to monitor inflow and outflow of goods and promote the balance of trade agenda of the government.

Ali, who was in Lagos at the weekend to inspect some seized containers at the Apapa Ports Command, said Nigerians should endeavour to increase local production in order to reduce dependence on importation.


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4 Comments
  • kayode Olufade

    Wow! When the President said he saw no reason to unpeg the naira then, we were all going crazy insisting on allowing market forces determine the value of the naira. Now we want the naira revalued and worse off, appreciate it’s value! Every sector wants N197 benchmark. It can’t happen till we are able to substitute oil as our major foreign exchange earner. We need to start exporting agricultural finished goods at an accelerated rate, meaning we need electricity, cheap electricity at that.

  • Daniel Dalon

    Thieves! They got dollar at N197 while everyone was paying N370 for it. Now that every one pays N400 for it they still want to pay their duties at N197.

    • musa aliyu

      Abi, o?! See me see wahala. All the same, na me and you go sufferam.

  • Joseph

    Three million jobs is a lot of figure. Government must do the needful to stem the tide.