The decision by the Central Bank of Nigeria and the Nigeria Customs Service to raise Foreign Exchange benchmarks at the seaports have created a fresh source of pain for importers and customs brokers, who are already dealing with a difficult port system as coronavirus infections peaked in the country.
Early last week, licensed customs agents were greeted with a new Forex rate at the seaports. The CBN raised the rate from N326 to N361 per dollar. This automatically raised tariffs for the agents who usually bear the cost of clearing imported cargoes.
The tariff raise heightened tension at the ports, where the agents were already contending with high storage charges and demurrage caused by delay in the port system amid inevitable restrictions to check the spread of COVID-19 in the country.
Only a few banks are working at the ports, and several shipping companies have placed control on their offices while not maintaining any form of automated transaction. This is causing delay in obtaining debit note from the shipping companies and paying tariffs to the Customs, before consignments can be released.
President, Africa Association of Professional Freight Forwarders and Logistics of Nigeria, Frank Ogunjemite, decried the new Forex rate, saying it amounted to insensitivity on the part of the Nigerian government.
He said, “The increment at this ravaging epidemic time is barbaric and uncalled for when the comity of nations are looking for measure to cushion the effect on their citizens.
“The simple implication is hardship of inflation on citizens because the cost of importation will be increased and possibility of further encouragement in smuggling, thereby breeding possible avenue for loss of revenue to the Federal Government.”
The naira lost strength steeply as COVID-19 began to impact on Nigeria. The government got the states to agree on a total lockdown for two weeks, thereby deepening unproductivity in the country.
The naira has lost over 20 points against the dollar since February 28 when the pandemic hit the country, putting the naira at N384 per dollar as at Friday, April 23. The CBN had put the Forex rate at N361 for the importers, but the shippers said the government needed to make more sacrifice during this time when the country is on lockdown and considering the losses to demurrage and storage fees.
“Yes, government should put the increase on hold as a sacrifice to the citizens at this trying time. Most other countries are experiencing same, but none of them has taken such decision,” the AFPPLON boss noted.
Vice President, Association of Nigerian Licensed Customs Agents, Kayode Farinto, lamented difficulties in making declarations since Thursday when the NCS began implementation of the new exchange rate.
“We just woke up and saw that exchange rate had increased from N326 to N361. We are heartbroken that our government would behave like this at this time,” said Farinto.
According to him, customs brokers are taking the highest risk to come to the ports as essential workers to move the economy forward.
“I call on leaders in the industry to prevail on the Federal Government to jettison this move as it may discourage the importers and the agents. We need to maintain status quo for now because we see that the oil sector has fallen but the government can still manage to continue to patch the economy with whatever it makes from the maritime sector,” he added.
He condemned CBN for not carrying people along.
“Finally, looking at the behaviour of NCS in this COVID-19 pandemic, she is not ready to change her modus operandi. We even suggested that we should invoke Section 28 of Customs and Excise Management Act to reduce human contact, but was rebuffed by the government.
“We won’t hesitate to advise our members to stay at home and not risk their lives should things continue like this,” Farinto stated in a message to Financial Street.
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