May 6, 2020

NEW FOREX RATE: Port stakeholders say policy ill timed, anti-economy

Solid VPS for Forex trading

By Eguono Odjegba


STAKEHOLDERS in the exports and imports value chain have reacted with disappointment to the upwards adjustment in the foreign exchange rate, saying it is ill timed, inhuman and capable of further hurting the economy and escalating the sufferings of ordinary masses.

Already, according to them, the Nigerian Customs Service, NCS, has begun the implementation of the increase in import duty payable on cargoes from N326 to N361 per dollar, following the new foreign exchange policy regime.

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Reacting, the National President of the Association of Nigeria Licensed Customs Agents, ANLCA, Hon. Tony Nwabunike, said the increase in exchange rate is a poor panic measure, in the face of the Coronavirus and urged the Federal Government to immediately rescind the directive.

He stated: “We understand that for some time now, government has been looking more and more at the shipping and freight industry for needed revenue, because as you can see, the crude oil which has been the main economic pillar has not been doing too well.

“Our worry is why now. There is a global lockdown because of this corona virus pandemic; businesses across sectors have all been grounded, so we have been very worried about this policy. This is going to drive up inflation; the amount importers and freight forwarders and customs agents use in buying and clearing and transporting the goods will be passed to the ordinary man on the street.

“That is not all, many businesses are bound to go under. What this policy is saying is that Nigerians and the economy can go and die. There is going to be a high jump in business loses, job losses, high cost of goods, while living standard is going to further deteriorate. This policy is going to depress the economy and these are the situations that give rise to insecurity and criminality.”
Nwabunike also expressed disappointment that such a major economic policy decision was taken without carrying the front line stakeholders along. He stated: “The policy makers don’t own Nigeria, they are working for Nigeria and should learn to consult and listen to Nigerians.

“While other countries are making the issues of survival and palliatives central policy action plan, we are here increasing the pains for our citizenry. ANLCA wishes to appeal to the Federal Government to suspend this policy and wait until the pandemic is over.”
Speaking in the same vein, President of the National Council of Managing Directors of Licensed Customs Agents, NCMDLCA, Lucky Amiwero, warned that unless government reconsiders the timing of the review, it will create collateral economic damage and increase the poverty rate, while also leading to the citizens’ emotional and psychological trauma.

He said: “I think that it is only an insensitive and inhuman government that will chose a time where there is global hardship and pains to increase foreign exchange rate. The CBN is obviously not properly advising Mr. President. At this moment, other countries are reorganising their economies to factor in some comfort for the ordinary man, to deploy the reserves for their immediate welfare.

“The world economy has collapsed and there is global lockdown, the economic and trade supply chain is on standstill. Is it not a show of total lack of consideration for our government to be adding to citizens pains, when we don’t even know where we are going?

“Right now, we are not even sure how SMEs will survive this pandemic, you are not sure what will happen to the economy and you are adjusting exchange rate. Because of the lockdown, there is no money, the banks are not working, importers can’t access loans or their money. Cargoes are abandoned in the various ports because there is no money, and the government is increasing VAT, increasing taxes, increasing forex. These are simply choking the economy, and it is pathetic.

“Right now this policy does not make economic sense; it is going to finally kill the economy, and I think President Buhari should set aside the directive.”

Also commenting, Prince Mike Okorie, President of All Ports Unified Freight Forwarding Practitioners Association, APUFFPA, said the new policy is both a clear expression of the disdain those in government hold the citizenry. He asserted that it was a further expression of the greed that motivates our policy makers and implementers, who he accused of using government instrument to feather their nest.

Okorie stated: “I am not surprised because when you have a government that is motivated by self consideration, you should expect such; they utilize these oppressive instruments to benefit themselves and their family.

“Just imagine, at a time of national emergency and hunger due to lockdown, the government is introducing higher foreign exchange. The priority of those in this government is making money for personal welfare, travels, holidays, medical tour, luxury, personal gratification. This has been the norm, and they use policy instruments to nurture their avarice.

“They were doing that through crude oil dollars, but now that there is global pandemic and oil market has shut down, they will look for money at all cost to meet their narrow needs, because as you can see, this policy is not helping the economy in any way”.
On his part, Chief Increase Uche, President of the National Association of Government Approved Freight Forwarders, NAGAFF, said the policy will be counterproductive and disrupt the economic system.

He said: “There is panic everywhere. I have called Port-Harcourt, I have called Abuja, I have called the airport, already at the seaport here in Lagos, the Customs Service has already inputed the new exchange rate into the system. It has also been inputed at the various DTI’s where freight forwarders capture their entries. It is serious issue now.

“It has thrown everybody off balance, it makes the system unpredictable because as it stands now, almost all the contracts entered earlier this year that are yet to be executed or that are on the process of being executed will be disrupted.

“Before you go into any international trade transaction, the government policy mandates every shipper to open Form M. In that very Form M, you state the description of the good, you quote the FOB amount, the insurance, freight, and also quote the exchange rate as at the time of opening the Form M.

“That exchange rate you quoted is meant to be applied when you are calculating duty on that cargo. Now, if after a cargo arrives here and there is this type of change in fiscal policy, it will completely disrupt the entire arrangement you have put in place. No business grows; no economy will prosper under this kind of situation.”