…Says new rate will stifle importation
…Ours is to only implement government policies, says customs
The National Association of Government Approved Freight Forwarders (NAGAFF) has called on the Central Bank of Nigeria (CBN) to review the new exchange rate for cargo clearance at the nation’s seaports as it is counterproductive to do so now.
Importers and the freight forwarders yesterday raised an alarm over the adjustment of the exchange rate for cargo clearance at the port from N326 to N361 per Dollar, a development they argued would compound the woes of the freight forwarders who may have opened Form M before now and had charged their clients upfront.
Speaking on the development, the National President of NAGAFF, Chief Increase Uche noted that the new exchange rate, if allowed to stand would impede on port operation, force shippers to abandon their cargoes at the seaports, worsen the congestion already at the ports and may lead to reduction of imports into the country thereby depleting the revenues due to the government.
Uche stated that it was not going to be easy for freight forwarders pointing out that the development was really sending panic across the logistics supply chain.
“I tried to make some enquiries, 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 imputed the new exchange rate into the system. It has also been imputed at the various DTIs where freight forwarders capture their entries. It is serious issue now.
“With this suddenness in the fiscal policy summersault, it throws everybody off balance, it makes the system unpredictable because as it stands now, almost all the contracts entered early this year that are yet to be executed or that are on the process of being executed coupled with the lockdown as a result of the Covid-19 pandemic, has really slowed down businesses, it is now going to worsen the entire situation in the sense that contracts already entered 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 clearly the description of this good, you quote the FOB amount, you quote the insurance, you quote the freight, you quote the exchange rate as at the time of opening this 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 a change in fiscal policy, it will completely disrupt the entire arrangement you have put in place before.
“I have gotten information from some of our members who had already collected some cargoes to clear, they have been given the lump sum charge to clear those cargo, particularly, one of our members who called me this evening, that he had three cars to clear, he had already charged the importer and he had paid him upfront, now when he went to make assessment yesterday (Wednesday), the system was not responding only for him to come back today (Thursday)and discovered that the exchange rate has been increased and the duty he was supposed to pay now almost doubled that he doesn’t know what to do.”
Asked whether those who had opened Form M earlier with the old rate would not clear their goods with the old rate as reflected in their Form M, he said, “What is supposed to be obtainable, what should apply based on that Form M that has already been opened should be the exchange rate on their Form M but right now, with this sudden change, you are now forced to capture your entry based on the current exchange rate issued by the CBN otherwise the capturing will not go, you cannot complete the declaration unless you agree on the new exchange rate. What this means is that what you quoted on your Form M that was the subsisting exchange rate as at the time you opened the Form M is no longer applicable.
“It is not done. No business grows; no economy will ever become prosperous under such situation. So, that is what we are suffering, that government with the Form M policy and then the sudden change in exchange rate, that is the tax increases is not helping matters. We are calling on CBN to review this very process because it will really impede on port operation. It can lead to shippers abandoning their cargoes at the port. It can worsen the congestion already at the port. It can also lead to reduction on imports.”
When contacted by our correspondent, the Public Relations of Officer of the Nigeria Customs Service (NCS), DC Joseph Attah confirmed the upwards adjustment in the exchange rate for cargo clearance even as he informed that implementation started yesterday.
Attah while reiterating the fact that the Service do not fix exchange rate but implement government policies however said “We even gave a grace period for people to understand that this thing has changed and then we start.”
Asked if prior notice was given to the business community before implementation, he said, “What do you mean by prior notice? Customs is not the one fixing exchange rate. You are directing the question to the wrong person; you are talking to the PRO of customs. Customs is not the agency that fix exchange rate and the exchange rate was not fixed yesterday. This question of sensitization, you should direct it to those in the business of that, ours is just to implement. If you are talking about smuggling campaign and all that, then you can ask me this question. Is it our duty now to be talking about monetary policy? The prior information is given by the appropriate authority, not me.”
On the fate of those who opened their Form M with the old exchange rate, the Customs spokesman had this to say, “The appropriate thing will be done. You know that once there is a policy change, it takes effect. So, I know that the appropriate thing to be done will be subject to what is applicable because as far as I know, once there is a change in policy, it applies.”
Photo: NAGAFF National President, Chief Increase Uche.
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