By Steve Agbota, [email protected]
Recently when the Central Bank of Nigeria (CBN) announced the lifting of restriction on 43 items declared not valid for foreign exchange (FX) window, all eyes now appeared focused on Nigeria Custom Service and other stakeholders to ensure that importation of unwholesome products is drastically curtailed.
The CBN had in 2015, restricted the 43 items from accessing its official window for their importation on the ground that local variants of the items are readily available across the country.
Items affected include rice, cement, palm oil products, vegetable oils, processed meat, steel drums and pipes, tinned fish, wheelbarrows, vegetables, soap and cosmetics, cellophane wrappers, tomatoes, and tomato paste.
Equally affected were security and razor wire, wood particle and fiberboards and panels, wooden doors, furniture, toothpicks, glass/glassware, kitchen utensils, tableware, tiles (vitrified, ceramics), textiles, wooden fabrics, plastic/rubber products, polypropylene granules, and cellophane wrappers.
After eight years, the items were banned from the official FX windows, the apex bank decided to lift the ban in line with government’s commitment to boost liquidity in the foreign exchange market.
Stakeholders especially the importers of these 43 items have described the development as a move in the right direction, as it would boost the current dwindling importation into the nation’s Ports.
However, consumers and experts have called on the Nigeria Customs Service (NCS), the National Agency for Food and Drug Administration and Control (NAFDAC) and other government agencies at the Ports and land borders to roll up their sleeves to ensure that imports of unwholesome products are prevented from entering into the markets from the port of entry.
Due to the way things are being done in the country, stakeholders and consumers are of the opinion that Customs, NAFDAC and other agencies must double their efforts to make sure importers are only bringing in products that are healthy and good for consumption among the 43 items.
The concern raised by some consumers is that some unscrupulous importers might take advantage of the new forex policy to bring in goods that are not healthy or harmful to the health of Nigerians. There are instances where Customs, NAFDAC and Standard Organisation of Nigeria (SON) have to destroy unwholesome and substandard products worth several billions of naira across the country.
Speaking with Daily Sun, Director of the Centre for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said that the regulatory agencies at the ports of entry need to step up their vigilance and effectiveness.
According to him, the government needs to support them to strengthen their capacity.
“But I must say that the most of the 43 items were not under import prohibition in first place. They were only excluded from the official forex window.
“We welcome the decision of the CBN to discontinue the forex exclusion policy on the 43 items. It is a move in the right direction. It is part of the policy normalisation process.
The exclusion of the 43 items was one of the several drivers of distortions in the forex market.
“The exclusion of the items also contributed to the persistent divergence in rates between the official window and the parallel market. The exclusion was also in conflict with extant trade policy as the items were not under import prohibition in the first place. It was an example of lack of policy coordination under the previous administration,” he added.
He said the new directive will also improve transparency and disclosures in foreign exchange transactions.
Meanwhile, he said the CBN should avoid market suppression tendencies, especially outside the I and E window, adding that all policy impediments to forex inflows should be removed.
Conversely, Mr Felix Odinaka, said the 43 items are not under prohibition of the items that cannot be imported initially, adding that they were restricted from accessing foreign exchange to bring them into the country.
He said that the CBN has given an assurance that the importers of these items will given opportunity to access forex, there is need for Customs, NAFDAC and others government agencies to brace up and ensure that only healthy products are allowed to enter the country.
“You see most of our importers like to compromise at times. For instance, they will travel to China and tell the producer or manufacturer of a particular product, let’s say tomatoes to reduce the quality in order for them to make more money. Reducing the quality may pose danger to the health of the consumers. This is why Customs and NAFDAC and the rest of them must renew their partnership to make sure that these unwholesome products are tamed at the port of entry.
“We are thrilled with the numbers of unwholesome seizures recorded by Customs recently. But they should not relent in their duty because this the time for them to up their game against any unscrupulous importer and their agents. Very soon, we will see expired rice, tomatoes and the rest being coming in through the ports and the land borders especially now that we are approaching yuletide period. They have to be stopped before they get into the market.
Also commenting on the lifting of the ban, a former National President of National Association of Government Approved Freight Forwarders (NAGAFF), Dr Eugene Nweke, said that globally and from some World Customs Organisation (WCO) point of views, no import should be prohibited.
He added that prohibition is done by some developed countries and international trade goods are meant to be free.
“If government chooses to be for the purpose of what we called domestic growth to protect domestic industry within the country and they place one or two policies that does not conclude the fact that they are right in doing what they are doing.
“If this government has decided to lift the ban on goods they categorised as are not worthy to access forex at foreign exchange market and they reversed it, what they are trying to say is that Customs and Ministry of Finance should allow international best practice, which provides for free movement of goods and services across nation. All you need to do is to use the tariff regulation. Either you increase your tariff up beyond the template of zero per cent, five per cent, 10 per cent and 20 per cent. You can put levy of 35 per cent or the rating plus levy that has been the practice overtime.
“There is a lot for the government to be done for us to start assuming that smugglers and people will start bringing unwholesome products. People cannot bring in unwholesome products if we have proper regulations. Most time, what makes people to bring unwholesome products is because of aspect of putting goods on prohibition. But if goods are allowed to be traded on bond and use the tariff regime to regulate the importation, people have no reason trying to cut corners.
He stated that trade must be given a general character, free movement, as government put measure in place that will checkmate the goods and that is why there are regulated agencies and that is why “we have Customs.”
“Why we try to say each time that unwholesome products will come in is because of the policy in our borders where through unapproved routes goods coming into the country without paying duty and what a view. Even at that there is need to checkmate and that system by CEMA says the right of Customs officers to open warehouses to move goods that are not properly imported from the store. Such power is in CEMA, which is called Customs law today.
“Most time if we have good Government that understands the dynamics of Nigeria economy and the finance of international trade, you will give it to them. This Government, I think for now that policy is welcome. It shows that they are concerned because the problem we have over there year has been that of the space that exist between fiscal and monetary policy,” he added.
He said that there is need to address and create a simple bridge for fiscal policy to thrive, have reasonable control over monetary policy because there must be a meeting point for this thing to thrive.
According to the Managing Director of Sula Marine Global Limited/foremost freight forwarder, Sulaiman Ayokunle, all agency have their duty and role to play which is why the Federal Government allowed them to be in the ports.
“For instance, there are even some Ports you can’t bring in pharmaceuticals. In Tin Can Island Port you are not allowed to bring pharmaceuticals.
You can bring pharmaceuticals into Apapa Port but NAFDAC must endorse it before approval for final release.
For every product that supposed to come into the country, many of them are regulated by Standard Organisation of Nigeria (SON).
“Before you can get your PAAR as an importer, they have a pool where all of them generate information from and anything that concerns standard, it is done and regulated by SON. Once it concerns them, without SONCAP you can’t even have your PAAR and without your PAAR, you will have delay, clearing and payment of duty with be inevitable.
It is not possible!” he said. According to him, Customs, SON and others have to up their game with this lifting of ban on the 43 items to be accessing forex from the official market, adding that they must prevent all these unwholesome products from coming into the country.
“Customs take their directive from the Ministry of Finance. Once government said these things must come in, they have no stop anything allowed by the Federal Government. What Customs need to do is to block all the loopholes and collect their duty.
Don’t be surprised that it is likely to they are going to place additional levy on some of these products apart from Customs duty. But we wait wait watch and see,” he added.