Hon. Tony Uju Nwabunike, National President of the Association of Nigerian Licensed Customs Agents, ANLCA, last week raised the alarm over attacks attempted on Nigerians by nationals of neighbouring states regarding the closure of the Nigeria land borders.
He revealed efforts by neighbouring francophone countries to unite in the area of diplomatic and bilateral trade, and the possible consequences such action has on the Nigerian economy.
He expressed concern that the closure of the border could impact negatively on balance of trade and also talked about the distortion in import tariff and the gigantic corruption and exploitation import driven revenue generation system has engendered in the polity. He spoke with Eguono Odjegba on other burning maritime issues.
There has been a gradual but steady distrust growing between customs officers and customs brokers over cargo value differences which have enjoyed customs discretionary power. Is there ever going to be an end to this contentious matter?
If the Federal Government provides a value benchmark as a means to standardize tariff charges, the misunderstanding may end. It is happening because the government has encouraged it. Nigeria is the only country where customs are given a revenue target. Customs duty on import and other port levies are supposed to be an administrative cost to cushion maintenance, logistics support and infrastructure provisions. I don’t know why we have turned it into a revenue mobilization system. Now when revenue target is given customs officials find reasons to manipulate cargo valuation, so if you look at it critically, it’s really not their fault. It is a policy problem created by the government and the political class.
How have customs manipulated the process since they merely implement?
I didn’t blame customs for carrying out directives given to it. What I want you to understand is that revenue collection from customs duty is a function of the volume of import. I have explained that since the government changed the objective for which these duties and taxes are collected and made it a revenue system, customs officials also uses the tariff and valuation system as a mean of meeting their targets. They subject HS Code and the tariff nomenclature into private business school and tell importers and their agents the mathematical measurements. The more you argue the more demurrage you pay on your container, so sometimes, even when you know that the customs and government are cheating you, you just play along so that you don’t die. If you ask any importer or customs broker they will tell you what I have explained, customs valuation has become an instrument for revenue mobilization.
So it is like using that power of customs formality as a means of coercion
They get money off you through crook and hook because there are no standard valuation system customs brokers and freight forwarders can refer to and use as a basis of duty computation. You asked the question and that is why I am taking time to explain. Export and not import should be the basis for revenue generation. We have crude oil, we have gas, we have agricultural produce and minerals. These are export goods from which revenues are gotten. We learnt all these in our elementary schools, didn’t you? But rather than focus on this revenue yielding exports, every successive administration turns to customs duty to raise revenue. Now all government people talk about is import based revenue. We have oil in abundance, we like to import oil. The essential food commodities like rice that we have in short supply, that is the area government like to block, our economic and political thinking, therefore, supports massive exploitation.
That brings us to the issue of recent raids on auto shops across the country. What is your take on that action?
Even if customs raids auto shops every month, smuggling will continue until prices are standardized. It is unfair that a customs officer calculates my duty at one point and I pay, and another customs team comes to the shop with a different value and accuse me of underpayment. Let there be a uniform tariff document that is not subject to negotiation. If that is done and an importer tells me to clear a Bentley Limousine, I can tell him straight away, it is so, so amounts. There is nothing to say more than to continue to beg the government to encourage open valuation system that is documented for the use of the public.
As the leader of the largest freight industry in Nigeria, how do you react to the border closure?
I wrote the Comptroller General of Customs over the closure of land borders. My concerns were why the action soon after signing of the African Continental Free Trade Agreement. We only have crude oil as major export. If we are trying to compete with Morocco, Algeria, South Africa…how do we go about it? Let me tell you Nigeria is not ready for the AfCFTA and it is going to be very difficult for us. We are going to face a lot of challenges. You see it is dangerous for people to see you as the giant of Africa, but when it comes to trading you cannot fit in. There are so many products in the African market that is becoming borderless. That is the area I want the Federal Government to look at instead of total closure of the land borders.
I am coming. Whether under the ECOWAS Trade Liberalization Scheme or AfCFTA, we need to be able to balance our trade, but if you are not exporting only petroleum, then our country will become a dumping ground. The other African countries know we have the market and the population so we need to brace up, we need proactive policy ideas.
I want the Manufacturers Association of Nigeria, MAN, and other agricultural bodies to see AfCCTA as an opportunity to push Nigerian export, our products. I think that if Nigeria standardize its trade and adopt proactive trans-border trade without imposing too many import ban through the land border, smuggling will reduce.
We all know that smuggling is a function of economic factors and trade policies. Total border closure may not solve all the problems. The border closure lest we forget affects legitimate businesses especially of Nigerians involved in import and export business. I also believe Nigeria is not ready for trade-in Africa after signing a treaty recently on trade liberalization in Africa. Since the closure, Cadbury, Unilever, Nestle and the others are counting difficulties and harsh trading environment.
Our immediate neighbouring countries are not complaining, Abuja has said they understand and are cooperating
Last week I was at Cote d’Ivoire for a business meeting. The moment some of us Nigerians attempted to make contributions, those francophone people started shouting and making trouble. They are becoming hostile all because of the closure of our land borders. Trade survives on loans, and it is not only Nigerians that are trapped in this unfortunate situation. Government has said this action has security implication, and we cannot but support the government to do what is right. As a businessman leading a group, my appeal is that the government should seek another proactive method to achieve border policing.
International trade, freight forwarding and customs brokerage is an evolving business world that trends on modern tools, how compliant are your members?
We are doing so much in the area of training. Some of our members just returned from Brussels and the USA. We are keeping abreast with modern trends. Many people are claiming to be freight forwarders and they don’t have the capacity. If you go to Switzerland, Antwerp or anywhere in the world, you will see what is called consolidation. Five or six of us can make a decision to come together and have a solid freight forwarding company which can stand against any other competitor abroad. World Cargo Alliance tells anytime we visit to consolidate, to partner so that they can have the capacity to do project jobs.
How is lack of capacity hindering your gains?
It is not easy to service international conglomerates, the required fund and professionalism is a major, major factor. Many project jobs are coming to this country and only a few Nigerian are doing project jobs. Let me give an example, a company is building a hotel, all the consignments for the building of the hotel because it is a new design, it is not a cement issue, they will bring in materials for it and all that. They will get a shipping agent and freight forwarder abroad by merely registering somebody here and ask for two or three persons to do a clearing. But the major people doing it are hired abroad because we don’t have the capacity.
Your tenure has been crisis-ridden, and people think you have no chance of making any impact
In the history of ALNCA, my election is the most highly contested. I was pioneer chairman of the Council for the Regulation of Freight Forwarding in Nigeria, CRFFN. My victory created a division in the house. But it is not true that I am just warming the chair. The ANLCA Secretariat has become more functional, we do increased documentation from there, now there is a higher degree of discipline. Members are enjoying full internet services with available nonstop power supply.
We are undergoing training, and train -the- trainer courses. Some of our members have also gone on training abroad. Six of them just returned from Brussels while another four have completed their training in the United States and are back to take help train other members’ in-country.
I used my diplomacy and connection to secure the release of 300 licenses of our members there blocked before I took over. I am a man of peace and decorum and I believe that what is wrong is wrong. We are working hard to bring greater efficiency into the system and I will not relent.