Why Nigeria may not reap AfCFTA benefits — Omotosho 

Why Nigeria may not reap AfCFTA benefits — Omotosho 

The Registrar, National Association of Government Approved Freight Forwarders (NAGAFF) Academy, Forwarder Francis Omotosho believes that the internal anti-free trade policies in Nigeria such as high tariffs among others are enough reasons why the Africa Continental Free Trade Agreement (AfCFTA) would not be achievable.

Speaking on the workings of AfCFTA and its benefits at the one-day workshop on challenges of Africa Continental Free Trade Agreement on Nigerian businesses organized by the Nigeria Union of Journalists (NUJ) in Lagos, Omotosho noted that for any economic bloc to achieve its goal, the country leading the bloc must be at the top of all her internal pressing situations.

Omotosho highlighted reasons why Nigeria is the major problem to the possible and effective implementation of the agreement among which are double examinations of cargoes by the operatives of the Nigeria Customs Service (NCS), which usually inflates expenses associated with businesses in Nigeria.

Speaking further, he disclosed the plans of foreign shipping lines to abscond Nigeria seaports and start patronizing Ivory Coast ports due to the lack of modern and effective port infrastructures in the country.

“The first challenge faced by AfCFTA is Nigeria’s lack of Unity. Until Nigeria comes together, the agreement is just an infatuation. Another problem with the implementation of the agreement is the lack of commitment to eradicating the free trade barriers. I don’t see the readiness in Nigeria. The customs is not ready. All the government agencies are not ready.

“Inadequate trade infrastructure is another pressing challenge. As we speak now all the shipping lines in the whole world are planning to make Ivory Coast hub port in West Africa. This is because they are fed of unnecessary delayed processes in Nigerian seaports and they don’t want to come to Nigeria again. We will now have a situation whereby every imported cargo lands in Cote d Ivoire and drop everything and Nigeria finds her way to bring her containers. Should we start talking about delays in Nigerian seaports? So, they are tired of coming to Nigeria. They are looking at the direction of Ivory Coast considering the standard of their Port. We don’t know whether Lekki Deep Seaport after completion would give us relief.

“Another barrier to the agreement on the part of Nigeria is that we don’t have a good rail transport system. These are challenges. If you’re moving cargoes from here to Ghana by road, you’ll meet different checkpoints on the way.

“If you lift cargo from here to Ghana by road because that’s the only means when you get to Seme border, Nigeria Customs would stop the cargo for examination. Of course, they are doing their jobs. If you take the next three steps while moving, Cotonou Customs will stop you and scatter your goods again all in the name of examination. “And we are here talking of free trade. If we go by rail and Africa is well integrated as agreed, you move your cargo by rail and until you get to your final destination, there won’t be any examination. Definitely, that would reduce drastically a lot of cost of doing business.

“Inconsistency in trade agreement among the member states is another issue. There are a lot of inconsistencies especially on the part of the lead agency when it comes to trade matters, which is the Nigeria Customs Service as far as Nigeria is concerned. Taking a look at the World Customs Organization, every five years, they review the harmonized customs tariffs but nobody will tell you how much he charges in terms of duty rates. Despite this, the idea is you should not charge more than zero to five percent. In fact, some economic blocs don’t charge anything; it’s zero duty.

“The recent ECOWAS Common External Tariffs for 2022 to 2026 agreed by member states says that Essential Social Goods moving from foreign countries to ECOWAS countries would be charged zero percent; Good of Primary Necessity, Raw Goods and Capital Goods, five percent; Intermediate Goods and Inputs, 10 percent; Final Consumption Goods and Finished Goods 20 percent; Specific Goods for Economic Development, 35 percent.

“Meanwhile, if you go to other economic blocs, the tendency is high that you might not come across all these. Aside from this, this tariff plan gives countries independence to charge whatever they like which is in line with chapter 98 of the plan. As we speak now, Nigeria Customs is making use of the chapter to impose another burden on Port users, which is National Automotive Council (NAC) levy. Customs charges are over 45 percent, port levy, seven percent. And this port levy is not supposed to be collected again because the essence of this port levy is to develop the port. Meanwhile, the port in question has been concessioned to concessionaires. It is the concessionaires that are supposed to be collecting the levy, which they would use to buy infrastructure for the port.

“Before now, for 22 years, we have been paying two percent NAC from 1993 to 2015. The essence of the levy is for a decade, we continue to develop our automotive industry. It’s not government money; it’s not Customs money; it’s ports users’. Where is the money? Even the council cannot give an account. Still battling with that, Customs has come again to impose the 15 percent for Nigerians to start paying. So, you want foreigners to still patronize us with all these charges? We are talking of free trade but our internal policy is very bad,” Omotosho lamented.

In his address, a Deputy Comptroller in the Nigeria Customs Service (NCS), Musa Omale who spoke on behalf of the Comptroller General of the agency, Ibrahim Hameed Ali while reacting to the observations raised blamed the high cost of duty rates in the country’s seaports on revenue target placed on the agency by the Federal government.

“Nigerians are fast to blame Customs but what most of us don’t know is that we only implement government policies. We don’t make these policies. Like the issue of tariffs, if the government gives me a target to meet up regarding annual revenue generation, would I challenge the government and ask why? Once it is given, we only try hard to fashion out how to meet the target. 

“Take for instance, in 2021 what was the target given to Customs? About 1.6 trillion and Customs tried and surpassed it,” he said.

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