Customs revenue in rapid decline as import volume continues to drop

Revenue performance of major commands of the Nigeria Customs Service has continued to deteriorate as volume of imports continues to fall even much more than expected into the second quarter of the year.

The two major seaports in Lagos – Apapa and Tin Can Island ports – which used to be beehives of activities have been reduced to deserted islands since last year due to government unfavourable policies.

The situation is made worst with only one vessel calling at some terminals within a period of three weeks at the Lagos Port Complex as against three vessels previously handled on a daily basis.

The ugly trend has thus become a cause for worry and concern not only to operators of these terminals who had to laid off some of their workers but also to the Nigeria Customs Service which depend mostly on imports to generate revenue for government.

Statistics released by the Apapa and Tin Can Island port commands and others since the implementation of the Central Bank of Nigeria (CBN) policy on foreign exchange, auto policy and the recent ban on importation of rice through the land borders among others showed a downward spiral in the commands’ revenue performance in the first quarter thus casting shadow on the ability of the NCS to meet its one trillion naira revenue target for the 2016 fiscal year.

The Apapa command, which is the largest in revenue generation for the Service, said it lost a whooping N13billion in import duty in the first quarter of the year.

Controller of the command, Comptroller Willy Egbudin while briefing newsmen on the activities of the command recently said it generated a total of N61.7 as against N74.71 billion collected in the corresponding period of 2015 representing a N13 billion decline.

He said, “If revenue collection continues to drop in flagship command of the Nigeria Customs Service, I wonder how other commands will get their own revenue. Apapa Area Command is the flagship of Nigeria Customs Service and if revenue generation from Apapa is going down, that means revenue generation as a whole to the Customs will go down.

“That is why we the stakeholders and the officers in Apapa command must fashion out a way of improving on its revenue.

“Even when these vessels come in, they come with scanty number of containers; bulk cargoes no longer come the way they used to because some of the items have been denied forex by the Central Bank of Nigeria.”

In a chat with SHIPS & PORTS DAILY at the weekend, Egbudin lamented the persistence lull in cargo throughput at Apapa Port saying that the situation is not getting any better.

He expressed doubt about the situation getting better in the second quarter, which has ran half its course.

At the Tin Can Island command, a revenue shortfall of N2.7bn was recorded in the first quarter of 2016.

Public Relations Officer of the command, Chris Osunkwo, said that the command generated N58.9bn in the first quarter of 2016, as against N61.6bn generated in the corresponding period of 2015.

The Seme Area command recorded a revenue shortfall of N1.5 billion between January and April.

Public Relations officer of the command, Saleng Taupyen said the command generated N3.3 billion within the corresponding period as against N4.8billion it is expected to generate going by its monthly target of N1.2 billion.

Going by the revenue figure released by these commands, none was able to realise its revenue target as set by the customs high command in the 2016 proportionate distribution of targets for commands.

The Apapa and Tin Can Island commands got N32 billion and N29 billion respectively as monthly revenue target, while the Seme Command is expected to rake in N1.2 billion monthly into the federal government coffers.

Considering the aforementioned economic policies of the government, which have affected importation, it is very clear, that Customs revenue will slide further in the coming months except government reviews some of its policies relating to imports.

National Publicity Secretary, Association of Nigerian Licensed Customs Agent (ANLCA), Prince Kayode Farinto in an interview with SHIPS & PORTS DAILY berated the government for not seeking input from stakeholders before implementing policies which he said have chased importers away from Nigerian ports.

He said as a result of the unfavourable policies, government is losing billions of naira on a daily basis due to diversion of cargoes to neighbouring countries.

“A sensible government will look at the effect of a policy before implementing and will carry every stakeholder along knowing well that price of oil is dwindling on a daily basis.

“Since the CBN policy, there has been a lull in business and volume of import has been dropping on a daily, weekly and monthly basis because of the restriction of forex to some 41 items and it has been good for anybody in the industry. I believe the government never consulted very well before implementing this policy and it is unfortunate it is happening in the maritime industry because after oil, the next place government can get money is the maritime sector.

“A government that is decisive and know its onion ought to have put up a lot of measures or take a second look at the policies before they are implemented. Most of the shippers are living the country, while vehicle importers now bring in their goods through neighbouring countries, and it is unfortunate that we have a porous border. So it has not been helpful in the industry. On a daily basis, we continue to lose money and government is saying it does not have money,” he said.

He advised government to make policies that will encourage genuine importers and prevent Nigeria from being a dumping ground. He said government could rake in billions from the maritime industry if its policies are friendly and well thought out.

“We have genuine importers who want their cargoes to come in through the ports but because of the government unfriendly policies, they don’t have option but to go to neighbouring countries and find a way of bringing in their cargo either by smuggling.  So government should encourage these importers by making friendly policies,” he said.



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