LCCI blames high tariff, ‘inappropriate policies’ for trade infractions

Director General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf

The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, has said that inappropriate trade policies of the Federal Government and high import tariffs are factors largely responsible for non- compliance to trade laws and regulations by those in the import and export business.

Yusuf stated this at a seminar on compliance to trade laws, guidelines and regulations by shippers and clearing agents, organised by the Nigerian Shippers’ Council (NSC) in Lagos on Wednesday.

He said excessive documentation processes, weak moral obligation, lack of stiff penalties for defaulters and high price differentials are some of the key drivers of non-compliance to the country’s trade laws.

He said there is need for the Federal Government to build a competitive economy by putting import tariff at a level that would make it easy for people to comply.

“Issues of policy are very important. Your policies must be right. You also don’t set tariffs too high especially when you know we have porous borders. When tariff is high and the demand for such product is high and the capacity to produce is very low, there will be serious compliance issues.

“Import restriction in the face of weak domestic production capacity, high cost of production and high domestic demand pose a major risk of compliance.

“The government must build a competitive economy because if cost of production remains high, if our goods are not competitive, compliance will be very difficult especially with regards to imported goods,” he said.

Yusuf said that sustainable trade policies and use of technology in the trade management process will not only enhance compliance to trade laws but scale up capacity of relevant regulatory institutions that are involved in the enforcement of trade laws.

He also advised that the discretionary powers of officials in the trade management process should also be reduced.

According to him, “The chances that those power will be abused are very high and often lead to corruption. If a container leaves the port, and somebody has the power to just stop it on the road and take it to their yard, that is too much discretionary power. For we to exercise that kind of power, there must be proper authorisation.

“Studies have shown that the following key elements are very critical in ensuring compliance with any regulation or laws: legitimacy, fairness, appropriateness of regulation, severity and certainty of sanctions, cost of compliance, capacity to comply and sense of moral duty and agreement with given regulation.”

Yusuf called on the government to improve the business environment to make domestic production competitive in price and in quality.