Nigeria’s total trade stood at N12tn in Q1 2023 - NBS
Apapa port

By Adebayo Obajemu

Unless the federal government makes last ditch intervention to avert fighting at different fronts at the same time and persuade the Nigeria Customs Service from carrying out its threat to auction over 7000 uncleared vehicles at the nation’s ports, there may be another crisis and further economic disruptions to the forex woes the country is facing.

The Service said it is under pressure to auction the trapped vehicles all of which have entered months of demurrage, following the clearing agents refusal to clear them due to the increased import duty imposed by the new E-invoice policy.

But the matter is not as simple as it looks as freight forwarders are also threatening a showdown with the Customs over its auction threat.

Business Hallmark’s findings revealed that to clear a vehicle now, the least cost hovers around one million for which it used to be around N300,000 before the E-invoicing and the Customs’ VIN policy.

Joseph Ebilakun, a freight forwarders told Business Hallmark that “this policy of E-invoicing and VIN must be changed; as I speak no car can be cleared in our ports now with less than N1million .

He stated that in this kind of inclement business environment, there is no way congestion will not come to the ports and piling up of demurrage would be inevitable. Since the beginning of this year, there has been palpable tension at the nation’s ports over rising costs and VAT at different levels.

And since the beginning of 2022, the Nigeria maritime sector key players consisting of the freight forwarders and other stakeholders have been lamenting the hasty and poor implementation of the Vehicle Identification Number (VIN), valuation policy employed by the Nigerian Customs Service (NCS).

According to them, the policy of E-invoicing and VIN have caused challenges for seamless transactional activities in the clearing process at the Nigerian ports.

Earlier in the year, there was a shutdown of operations by freight forwarders over the same set of issues before they were prevailed upon to call off their strike action in order to give room for more engagement over the issues raised.

Again, at the round table session organized by the Maritime Journalists Association of Nigeria (MAJAN) at their Calcutta secretariat at Apapa in Lagos on Tuesday 28 June 2022, importers, exporters and Customs terminal operators counted their losses.

The stakeholders vehemently condemned the vehicle clearance policy, which in their view has left thousands of automobiles abandoned at the ports by their owners.

They loudly railed against the pain they go through and the negative impact of the policy on their operations, which the freight forwarders say is responsible for unfortunate situation at the ports currently.

They alleged that the Customs coerced importers and their agents into a policy that was haphazardly packaged, which is now leading to all stakeholders, including Customs alike, being the losers.

They are now threatening to go into a showdown with the Customs should the later carry out its threat to auction over 7000 vehicles, which estimate out at over 10,000 as new vehicles come, that remain uncleared as a result of rising duty and other charges.

Freight forwarders who spoke with Business Hallmark stated that currently, the revenue Customs has projected to get through the policy, otherwise called VIN-valuation, has been on a downward trend, with the terminals littered with abandoned vehicles, even as the cost of automobiles has shot to the rooftop in the market.

According to some of the freight forwarders spoken to, their major beef is that the main hitch in the policy was the assessment of the non-standard vehicles – that is, those imported automobiles whose data had not been inputted into the Customs portal – saying their duty rate had been outrageous.

Meanwhile, for those vehicles with 17 digits, which data has been captured in Customs’ portal, it is said that there were no issues in their duty assessment, awarding the process of clearing them at ports to over 90 per cent pass mark.

They further observed that some brands of vehicles, such as Mercedes Benz 2003 M model and BMW with 17 digits were yet to be inputted into the system, thereby making their clearance difficult.

George Okafor, the Chairman, PTML Chapter, National Association of Government Approved Freight Forwarders (NAGAFF), in a recent media outing said the policy of the reduction of vehicle duty from 35 to 20 per cent may have led to unintended revenue loss which has forced Customs put in place the VIN valuation without adequate groundwork to avoid hitches.

Okafor hinted that the initial plan jointly agreed on was that the Customs would test-run the policy in a particular port for some time before making it universal but that was not so.

As at last week, the Nigeria Customs has not shifted ground on its decision to auction over 7,000 uncleared imported vehicles at the Lagos Ports if the owners fail to comply with the new Vehicle Identification Number (VIN) valuation policy of the Nigeria Customs Service (NCS) and may lose them unless they act fast.

Recall that the NCS had penultimate week threatened to auction off 7,000 such vehicles both to decongest the ports and make money for the treasury.

Festus Okun, NCS Area Comptroller of Ports Terminal Multiservices Limited (PTML), was quoted as stating that: “we have about 7,000 vehicles at the ports. They are mainly vehicles manufactured before 2013.”

But an importer who craved anonymity told Business Hallmark that the figure is higher than 7000 mentioned by the service, adding that the number exceeds 10,000 at the two Lagos Ports, Apapa and Tin Can Island, including the bonded terminals in the state.

Uche Ejesieme, Tin Can NCS Public Relations Officer (PRO) stated last week that if the importers refuse to pay duties required by VIN, after 90 days the vehicles will be shipped from the ports and bonded terminals to the government warehouse in Ikorodu for auctioning.

He explained that relocating the vehicles will begin once terminal operators generate Uncleared Cargo Lists (UCL) to enable the NCS declare them overtime cargoes.
Ejesieme said the ports need space to foster legitimate business.

“So many factors are responsible for the huge number of vehicles inside the ports. It is not just about the VIN.

“Some of the importers may be having issues with their banks and others may be having domestic challenges. But our prayer is that they should get the money to come and clear their vehicles.”


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