Government policies and ports congestion
AS at the first week of August, both the NAHCO and SAHCOL warehouses at the Murtala Mohammed International Airport Ikeja, were reported to be filled to full capacity with assorted imported goods being detained by the Customs. The adjacent Federal Government warehouse also lacked adequate storage space for any additional goods. As a result, off-loading of cargo was severely impeded and some airlines began to reject further inward-bound freight.
According to the Customs, most of the detained goods were commercial in nature but had not been accompanied with the relevant documents such as the Clean Report of Inspection from the country of origin in order to facilitate their clearance from the airport. Intent on evading payment of duty, the importers had declared the goods as personal effects. To avoid detection, fictitious names served as consignees just as non-existent addresses adorned the manifests. The faceless importers were therefore set for a waiting game if need be. The immediate cause of the congestion at the airport stemmed from due enforcement by the Customs of regulations guiding importation which had hitherto been left in abeyance for unknown reasons.
Elsewhere at the major seaports, uncleared and overstayed imported goods have created horrendous congestion. In normal times, imported cargoes may overstay their period of grace before attracting demurrage by a few days thereby causing mild congestion on account of slow Customs procedures and sometimes shortage of functional port equipment. But the planned adoption of destination inspection about two years ago and its suspension on the eve of the scheduled take-off date led to bunching of non-CRI cargoes (that is, imported goods without Clean Report of Inspection) and attendant heavy congestion. While genuine importers subsequently extricated their goods, the chaotic block-stacking of freight containers left in the wake of the botched programme has continued to hamper operations at the ports. Oftentimes legitimate imports are trapped and delayed unnecessarily.
Today, goods awaiting clearance from the Apapa-Tin Can Island Port Complex have spilled over the port proper, overflowed available bonded warehouses and spread into several satellite dry ports in the Lagos area and beyond. Only a few months back, the authorities at the Port Harcourt and Onne ports cried out that over 1,000 overstayed laden freight containers were clogging port operations. They begged importers to make urgent arrangements to clear their goods.
However, most of the imported goods currently marking time at the ports generally lack appropriate documentation and bear incorrect product identification and values. Their smugglers play for time, wait till the coast is clear, and at the opportune moment bribe corrupt Customs officials, skip or make token payments into the public till and then cart away the goods. Meanwhile, a Presidential Committee has looked into the problem of non-CRI imports. It was most appropriately headed by Alhaji Nuhu Ribadu, Head of the Economic and Financial Crimes Commission which has been set up to trap and strangulate economic saboteurs like smugglers. The committee's findings neither led to any arrests and prosecution of suspects nor offered any cure for the scourge of illegal importation. Instead the affected smugglers (government calls them importers) appear to have seized the upper hand and pleaded for unspecified extension of time to enable them to clear their goods before any cargoes that might thereafter remain uncleared could be auctioned.
Now, auctioning overstayed and illegal imports may be just deserts from the narrow perspective. The smugglers through official photo-trick and manipulation would end up buying back the bulk of any auctioned merchandise and sell same at great profit. No doubt, the countries from which the goods originate do gain. Government scores pyrrhic victory as its takings from such auctions are immaterial. From the economic perspective, unwanted goods succeed in penetrating the local market, dislocate domestic production, worsen unemployment and undo government's economic programme. In 2003, smuggled imports accounted for 55 per cent of total imports.
The question that arises is: what taproot sustains massive illegal importation that is responsible for the prevalent port congestion Generally non-CRI goods and smuggled imports including falsely declared personal effects are all duly pre-paid for before shipment. While it is possible that such shipments may be funded with earnings of Nigerians in diaspora, their contribution may be assumed to be negligible. However, the public sector accounts for some 95 per cent of total foreign exchange earnings, all of which is channelled through the Central Bank of Nigeria (CBN). The prominence of smuggling and the ballooning of uncleared or overstayed cargoes, all duly paid for with foreign exchange from the national pool and yet lacking stipulated documentation that serve as the pre-condition for accessing foreign exchange, casts doubt on CBN's diligence in husbanding and dispensing Nigeria's foreign exchange. The CBN condones glaring abuse of foreign exchange which constitutes the lifeblood of smuggling and also port congestion.
It is difficult to understand why the CBN has over the years doggedly insisted on applying economically incorrect foreign exchange and monetary measures which induce economic failure, but aid smuggling and corrupt diversion of the country's foreign exchange into private foreign bank accounts. Today, the CBN agrees that the Dutch Auction System (DAS) used for dispensing foreign exchange has been roundly abused. Indeed, DAS is causative of poor economic performance. Yet, the CBN is offering continued participation in DAS as the star prize to banks which consolidate and raise their capital base to a minimum of N25 billion.
By deregulating the foreign exchange market, by disbursing foreign exchange revenue in dollar certificates to be exchanged for naira in the open market, by ensuring meticulous documentation and comprehensive destination inspection of imports, and by employing its own correspondent banks for external settlements as and when due, the CBN would succeed in preventing the undesirable contributory factors to poor economic performance. It would also render redundant the plethora of legislation and institutions seeking in vain to cure our self-inflicted and full-blown economic ills.
