By Funso Olojo |
A moral challenge, which will need strong political will power to surmount, is currently facing President Muhammadu Buhari, in its effort to strengthen the sliding value of the Naira.
On assumption of office, the President, through the Central Bank of Nigeria, has embarked on a tough FOREX restriction in order to enhance the value of the local currency which has hitherto been treated with disdain by Nigerians and other business interests in the country.
This attitude to the Naira has further weakened the currency as foreign currencies, especially the American dollar, have inadvertently become legal tender in the country.
This is even after the Buhari administration placed a ban on transactions in foreign currencies, insisting that all transactions should be done in the local currency.
However, Integrated Logistics Limited, (INTELS), which prides itself as the leading logistics provider in the oil and gas free trade zone in Onne, has continued to observe the policy in the breach.
The company, which has interests in Onne port, Warri port and Calabar port, may very well be undermining the efforts of the government to strengthen the local currency as it still collects hard currencies from the users of its facilities.
Curiously, Alhaji Abubakar Atiku, the former Vice-President of the country and a leading chieftain of the ruling All Progressive Party (APC), is the major equity holder in the company.
Analysts worry that Intels has apparently continued to stand upon the influence and power of its major shareholder to ride roughshod on major policies of government, brushing aside the protests of other stakeholders in the nation’s maritime complex.
One of such brazen affronts of the company was an attempt to annex the oil and gas free trade zone, using the powerful link of its chief promoter to compel all oil and gas related cargo to go through its facilities, despite the protests of other concessionaires who felt shortchanged in what they regarded as the arm-twisting tactics of the company to run them out of business.
To protest what they regarded as the larger-than-life posture of Intels, importers of oil and gas related cargo subsequently boycotted the use of Intels facilities, and instead, chose to divert such consignment to the neighbouring ports from where they bring them to the country.
However, stakeholders have expressed fears that the activities of Intels may jeopardise the efforts by the administration of Buhari to keep a tight rein on foreign exchange transactions and check the continuing slide of the Naira against the United States Dollar (USD) and other major currencies, if the company is not checked in its excesses.
It will be recalled that the company was in 2006 awarded concession for Onne, Warri and Calabar ports each for 25 years, with each concession also being renewable for another 25 years.
Earlier, in 1988, Intels had secured five-year leases at the Federal Lighter Terminal (FLT) in Onne Port, and at Warri Port.
Intels was in 1992 awarded 21-year extension of leases at Onne Port Complex, Warri Port Complex, and Calabar New Port.
The establishment of the Onne Oil and Gas Free Zone by the promulgation of Decree No. 8 of March 29, 1996, had favoured Intels – according to sources – in assuming the role of am “oil and gas service centre”.
Checks revealed that, over the years, the numbers of oil and gas licensees operating in Onne have risen astronomically, earning Intels huge returns on its services that are denominated in US dollars.
It was gathered that, while there had been eight companies that were operating at Onne in 1997, the numbers had grown in leaps and bounds in subsequent years as follows: 95 companies, 2004; 170 companies, 2014; and in 2015, 190 companies.
In a document entitled, “Development of facilities at Onne, Warri and Calabar Port Complexes”, which it issued in May 2015, Intels reported that there were: “190 companies presently operating in Onne with investment valued at over USD6.0 billion and supporting livelihoods for over 204,000 persons (direct and indirect employments and family members).”
Perhaps indicative of the company’s alleged disdain for the Naira, Intels did not give the Nigerian currency’s equivalent of the said value of investments by the 190 companies operating at its FLT and Federal Ocean Terminal (FOT) facilities at the Onne Port Complex.
Industry watchers contend that, with its long history of romancing the USD, in particular, and other major currencies, and its estrangement from the Naira, Intels will be hard put in providing the value of its investments.
When contacted, Intels Public Relations Manager, Mr. Isidore Sambol confirmed the receipt of foreign currencies by the company for its services.
In rationalizing the practice, Sambol claimed that Intels operates in a free zone which he said was exempted from such forex restriction.
‘’Yes, we are exempted from the forex restriction because we operate in a free trade zone. If you conduct your investigations well, you will notice that free trade zones are not part of the policy.
‘’You should also be aware that oil and gas is an international business and there is nothing wrong if we collect payments in international currency, mostly US dollars’’, the image maker of the port concessionaire declared.
He however disclosed that the company can collect the naira equivalent of foreign currency from its clients.
‘’If the clients want to pay in naira, we collect because we need tons of naira to drive our business. So the allegation that we insist of collecting only foreign currencies is not correct. We also collect naira’’, Sambol stated.
The Federal Government has been reaffirming its stringent foreign exchange policy in the face of dwindling revenue accruing to the nation as a result of the drop in commodity prices, which notably is Nigeria’s main foreign exchange earner.
The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, told journalists from Nigeria on the sidelines of the International Monetary Fund (IMF)/the World Bank Group meetings in Lima, Peru, recently that the apex bank will continue to deny importers access to foreign exchange to bring in goods that can be produced locally.
The CBN had identified about 41 items which it denied eligibility to access foreign exchange from the interbank window, a policy Emefiele stressed was not up for review.
“We have not banned any items. What we just did was to exclude them from accessing foreign exchange; items that can be produced in the country. We think that because of the problems we’ve had, the drop in commodity prices and revenue accruing to the nation, and because we know that these items have been produced in large quantities in this country in the past, that provision still stands. The CBN is not reconsidering the ban, the exclusion still stands,” Emefiele said.
He added: “The Central Bank has at different fora even received lists of additional items which some sections think should be excluded from receiving foreign exchange, but the CBN has for now limited the options to the existing ones.”