Friday, September 17, 2021

    Cost of freight rises to $14,500, manufacturers decry raw materials shortages

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    Naija247news Editorial Team
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    By Steve Agbota, 08033302331

    Nigeria, leading net importer goods and services raging from food, raw materials, automobile among others from America, Europe and Asian countries is indeed going through some challenging times participating with other countries in global commerce.

    But presently, stakeholders in the maritime sector especially the Licensed Customs Agents are beginning to show some concerns over a drastic drop in cargo throughput into Nigeria due to increasing foreign exchange, the free fall of naira, and COVID-19 pandemic among others.

    Some Licensed Customs Agents who spoke to Daily Sun on the ugly trend in global business lamented that most importers can no longer travel out of the country to bring in import as result of the recent policy of the Central Bank of Nigeria (CBN), restricting sale of foreign exchange (forex) to Bureaux De Change (BDC) operators.

    The policy, according to stakeholders has compounded their situation, as Nigerian ports have started experiencing a drastic drop in cargo throughput amid rising cost of shipping containers into Nigerian ports.

    Daily Sun learnt that importers are unable to bring in cargoes due to the rise in dollars and freight charges, as shippers now pay over $14,000 to bring in a 40ft container from China, as against the $5200 and $6000 before now.

    With these challenges, manufacturers are lamenting shortage of raw materials that is making them to operate below capacity utilisation.

    Before the astronomical increase dollars, Shippers Association Lagos State (SALS) had predicted the Nigerian ports would witness shortfall of cargo import in the first and second quarters of the year.

    Stakeholders said most of the goods presently at the nation’s ports were those that were imported five to six months ago, with a good number of them waiting to be cleared amid fear of further hike in prices of imported items as demand would soon outweigh supply.

    Speaking with Daily Sun, President, Africa Association of Professional Freight Forwarders and Logistics of Nigeria (AFFLON), Otunba Frank Ogunojemite, said there is decline in the importation, because the naira has lost much value and one can speculate what is going to happen and many importers decided to keep their money or to gamble their money on any importation for now.

    “This is going to be disastrous in this country by the time people consume what is available in the market and prices skyrocket that is going to lead to inflation. So tell me why Nigeria will not head into deeper economic recession.

    “We in the clearing and forwarding business are struggling. Definitely, every layman can see that importation has dropped. The dollars is about N520.

    “Apart from that, the problems in the port are affecting a lot of things. Maybe that is the perspective the acting Managing Director of Nigerian Ports Authority, Bello-Koko is looking at. Those who have consignments in the port cannot come out.

    “He himself said that dwelling time in Nigeria is 21 days. What causes the 21 days is inefficiency, lack of equipment and lack of single window. If the infrastructure and single window are in place, why will it take 21 days turnaround for vessels?” he added.

    According to him, one don’t need to be a licensed clearing agent before one would know there is going to be a decline in importations when the dollars is going up and naira is losing value.

    “Then you have to look at per capital income, will people able to afford the goods coming in? Are we heading to more abject poverty? How do people survive? This is one of the reasons that caused strike among the medical doctor because their salary is not for them.

    “Government has a lot to do. We are adding to the cost. What is the palliative coming from the government? Virtually, everywhere in America, you can have a COVID test free. Doing COVID test in Lagos, you payN52,000. I don’t know about other states.

    He said the cost freight of bringing in 40ft container from China has gone up from $6500 to about $14,500, asking that where importers put the cost?

    “The price has been rising and where will you put the cost. Now there are so many levies, the naira is losing value coupled with per capital income of the people remain static,” he said.

    Meanwhile, the President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said the drop in cargo throughput was as result of certain measures put in place by Central Bank of Nigeria.

    “The nation’s port system, is suffering from government inconsistency in terms of exchange rate and this has made many people to be confused. Intervention of government is killing people, clearing of goods have escalated and people are worried because when the system is not predictable, not transparent, no one expect people to venture into it,” he said.

    He said that system must be predictable, transparent and consistent for people to go into business.

    He said there is need for Federal Government to sit down with Ministry of Finance, CBN, and Customs to do a lot of work things out. He said when there is increase in exchange rate; it would affect the price of goods.

    “Where you increase exchange rate, it might be limited to some people and when it is limited to them, you find out that people cannot go out to import. People now import based on order but they don’t travel out to bring their consignments.

    “There is a lot of problem in this country when it comes to importation. The problem we found ourselves now, COVID-19 contributed to it. The present increase in exchange and many restrictions introduced by CBN and Ministry of Finance and Customs actually affect the law of business in the port. The is the time the port supposed to witness importation surge because Christmas is coming, which is supposed to be the peak period,” he added.

    He said when Customs realised trillions it is the result of increase in exchange rate, saying that when there is increase in exchange rate, customs revenue doubles.

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