Dwindling import revenue worsens Nigeria’s economic plight

06 Marzo 2015
Paese:  Nigeria Fonte: 

Nigeria’s economy, the biggest in Africa, has been adversely affected by the current dwindling oil prices and inadequate non-oil revenue capacity over the years. However, the decline in import revenue, which is expected to have provided the cushioning fiscal buffer for the economy tends to worsen the nation’s economic plight. FRANCIS EZEM, reports.

When the Federal Government late last year, mooted the idea of introducing some austerity measures, as part of measures to address the dwindling national revenue occasioned by the sharp decline in the price of crude oil, many port stakeholders most likely did not envisage the current magnitude of effect it has on the industry today.

It was in line with these measures that the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo- Iweala, announced that the government would place high tariff on luxury and expensive items such as private jets, expensive cars and drinks.

Under these measures, the Central Bank of Nigeria also restricted the sale of foreign exchange to importers. Part of the reason for this was to conserve the nation’s foreign exchange and also save the national currency, the naira from further loss of value to other international currencies, especially the dollar. Prior to this time, the naira exchange rate to the dollar was in the neighbourhood of N170 per dollar. Meanwhile as at the close of business activities last week, the official exchange rate of the naira to the dollar was N205, which tends to justify the policy of hedging the naira from its free fall.

However, though these policies are well intended, they are currently having adverse effects on the maritime industry. Government is also a victim, as its revenue accruals from import duty and other fees and levies have faced sharp decline in the last few months.

Many stakeholders had suspected that all was not well when Maersk, which freights more than 50 per cent of container traffic into West and Central African sub-region including Nigeria recently reported that it recorded more than 30 per cent decline in the volume of consignments shipped into the country.

In addition to these new economic policies, experts also believe the political tension and uncertainties associated with the electioneering campaigns, especially the recent shift in the dates of the elections, have also made the importers to adopt a ‘wait and see posture’

The direct implication of all these is the decline in Federal Government’s import revenue.

Revenue statistics released by the Nigeria Customs Service show a sharp decline, an indication that government’s projection of cushioning the effects of the dwindling oil revenue with import revenue and nonoil exports might continue to be unrealistic.

For instance, import revenue record released by the Tin Can Island command of the service shows that a total of N20.9 billion was collected for the month of January 2015 as against that of N21.6 billion collected in the comparative period of 2014.

Similarly, for the Ports and Terminal Multiservices Limited PTML, which is predominantly a Roll-On-Roll-Off RORO, port with little of containerised cargo, a total of N5.2billion was collected for January 2015 as against the N7.1 billion collected in the comparative period of last year.

However, the Lily Pond Container Terminal command of the service is also faced with the dwindling revenue generation.

Controller in charge of the command, Comptroller Mustafa Atiku, who spoke with news men recently, disclosed that out of a revenue target of N1.9 billion, which was the command’s monthly target for last year, which is expected to increase, it was only able to collect N852 million for the month of January 2015.

Investigation also showed that the command as at last week collected only N98 million, an indication that it might not make the N852 million collected in January.

While lamenting the drop in the import volumes, he noted that few vessels are now stemmed at the terminal, which has become a shadow of its old self in terms of volume of activities.

It was gathered that the management of the service has been unable to announce the revenue target for the service for the 2015 fiscal year, which is usually released in the last week of December o first week of January of a new fiscal year. A source close to the service hinted in a telephone chat that the management is worried by the political and economic uncertainties in the country, which is currently taking its toll in its revenue generation, out of which it also collects seven per cent.

The source hinted that the service has not held its top management meeting to review the previous year’s performance and chart a new course for the New Year.

Managing Director of Port Passages Limited, a Customs Brokerage firm, Mr. Mike Nwokeafor, while lamenting the effects of the lull, said activities at the ports have nearly come to a halt.

Nwokeafor, who is also a member of the Association of Nigerian Licensed Customs Agents ANLCA expressed worries that this trend might continue until May 29, when a new government will be sworn in.

President of the National Council of Managing Directors of Licensed Customs Agents NCMDLCA, Mr. Lucky Amiwero, who also spoke in an interview, noted that the effects of the lull are better felt than imagined.

“As you and I speak, scores of Nigerian freight forwarders and Customs brokerage firms have relocated to neighbouring West African counties such as Ghana, Togo and Republic of Benin in search of greener pastures because of the lull at the ports in Nigeria”.

It was gathered that many had closed shop due to lack of the needed financial muscle to remain afloat.

Amiwero therefore called for concerted efforts on the part of the government and stakeholders to address the issues.

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