October 19, 2019

Real reasons Nigerian importers prefer Cotonou

Real reasons Nigerian importers prefer Cotonou

By Fred Iwenjora

The current closure of Nigerian land borders especially the Lagos, Nigeria/ Benin border seen as the most busy as far as imports and exports are concerned in West Africa has thrown up questions as to how it all started that Cotonou became a major attraction to Nigerian importers especially those importing from other parts of the world.

How did we get here? How did Cotonou become an attractive port of entry for Nigerian importers even when Nigeria has the largest ports in West Africa? Why do Nigerian importers prefer Cotonou to Lagos ports?

In an attempt to answer some of these questions Saturday Vanguard within the week, had several interactions with several importers whose many containers are either incurring demurrage at the Cotonou ports or rotting on the queue to enter Nigeria at Seme due to the border closure. They offered some insightful explanation on the issue.

Most of the disclosures bordered on character and the so called Nigerian factor which breeds laws that end up benefiting the Customs officers rather than the country at large. Corruption.

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While dissecting the matter, one of the respondents pointed at the high cost of clearing of imports in Nigeria as compared with Benin Republic. He also pointed at the many bottlenecks created by Customs, Immigration, NDLEA and other agencies associated with importing containers directly to Nigeria.

According to him “I have been clearing my goods from the Cotonou ports in the past 15 years. Prior to then, I was a patron of Apapa Ports until I realized that it is far more cheaper and easier to clear at the port in Benin Republic and bring into Nigeria. What would cost N2m to clear in Benin gulps over N5m in Nigeria with all the stress accompanying it.

Continuing, the experienced importer also pointed “at the discrepancy in duties paid on each container in Nigeria by different importers. There are all kinds of duties to be paid even when there are arbitrary waivers for some other importers. The playing field is not level for all.

This difference in duties is a big issue because it gives some importers an edge over others as they are all forced to sell same products in same market”.

He did not end there. He narrated how the 0 %, low and high percentage of duties in some goods by Nigeria has created much more benefits to Nigeria Custom officials than it has benefited Nigeria as a country. Allegations are rife as to how members of the Customs use that clause to enrich themselves by arbitrarily fixing duties by themselves and not the country. Those who are connected with the system end up paying far less duties than others who are not. This is a big frustration to most importers causing them to seek easier ways.

Also speaking, another importer said “it is only in Nigeria that a container cleared by the Customs and released at the Wharf ends up having issues with same Customs who also track it down before it gets to its destination to impound it or multiply the duties. If not how could a container which has been cleared to leave the wharf by Customs find its self at Ikeja Customs yard? But no container from Benin ever faces such problems.

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According to the respondent, the rate of vandalisation of shipment by wharf  rats  in Nigeria is unprecedented and many importers cannot bear it.

It has become normal according to Saturday Vanguard findings for importers to see three hundred thousand naira only on their receipts of payment after making payment running into millions of naira.

It is all these bottlenecks, non level playing field as the case may be that may have lured many a Nigerian importer to the Cotonou port where everything works better and easier.

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The respondent alleges that in Cotonou, there are no categories of import duties as all containers and their sizes are cleared with a flat amount no matter what the contents are.

When the bad roads to Nigerian ports are mentioned as one of the factors that make Cotonou a better landing destination, the importers were unanimous in their response that the roads mattered less. In the words of one of them “the roads were still good in Apapa before I started going to Cotonou to import. Even the Badagry road is also not good so it is not about roads. I want to tell you that the only way to redress capital flight from Nigeria to Benin in international trade is to improve our ease of doing business”.