President-General, National Shippers Association of Nigeria and Chief Executive Officer, G.G.I. International Nigeria Limited, Dr Innocent Akuvue, speaks to ANOZIE EGOLE on the challenges facing importation in the country among other issues
What are the challenges shippers are currently facing in the country?
Unavailability of forex. You could even go by letter of credit but to get a dollar to fund it is a problem, all these things create problems. You may bring in goods today and after selling it you are not sure of the next one. These are the major issues we are having aside the fact that we are not usually consulted when critical decisions are being taken. A typical example was with the haulage. I mean everybody knows that he who pays the piper calls the tone.
If I am paying the truck man that I should be the person that would say how much I would like to pay. But if you negotiate on my behalf and enter a Memorandum of Understanding, you want to force the implementation on me; it is going to be difficult. So, we need to have all stakeholders involved in a dialogue so that when they are talking, no one would kick against it. For example, the Association of Nigerian Licensed Customs Agents in Onne Port, River State had written to the Nigerian Shippers Council, saying that it was not going to work. So for them to have written to the NSC, it means they were not also carried along. If these people who are the facilitators of the business at the ports are complaining and have officially protested, you can imagine what the owners of the businesses would do.
How do you intend to tackle some of these challenges?
We intend to engage the transport owners and have a solution to this issue so that everybody would be free, an affordable rate would be agreed so that goods can move freely at the ports. The cost of doing business in Nigeria is very high. For every export container, there is a N40, 000 charge you would have to pay. If you don’t pay that money, nobody will process your papers. The money is received by a private firm, but it is a fact and it is verifiable. But my point is this, all these payments build up to the cost of export and that is where our problems lie.
When your export rates are very high, you won’t compete with the international market. So, these affect us because we need to encourage exports. The government has a wonderful policy, very special export terminals and all that but the question is, the agencies at those terminals are their activities being monitored? All these things discourage people from exporting. Because some of these goods are perishable by the time you create bottlenecks, before you know it everything is messed up. So, we need to see a government that has policies and implement these policies. The regulators of the ports, which is the Nigerian Shippers Council, we as shippers would continue to engage it until we find a lasting solution to all these.
What informed the formation of the national body of shippers association?
If you look at the act establishing the NSC, one of the mandates it has is to establish shippers association at all levels. So, for everything that existed at the state level, there is always a need for the national level because it is the national level that would coordinate the states. So, it is the national body that would be the central mouthpiece of all shippers in the country. Because if you are talking based on state level, every state has its own peculiarities. So, our job is to gather all the challenges from the various states, articulate them and present them to the appropriate authorities.
How has the dollar rate been affecting your businesses?
Everything that creates problems in terms of logistics at the ports affects our businesses. That is why whenever there is a platform that is championed by the Ministry of Marine and Blue Economy, all the stakeholders are going to be there, because when it affects one, it would affect the other. For example, if the cost of the Nigeria Ports Authority is high, the ultimate person that would suffer it is the shipper, whose goods are coming in. Because if you are charged so high from the vessel dwell time, or if all the agencies at the ports are doing what they are supposed to do, you would see that the cost of goods at the ports would be less. At the end of the day, the shipper articulates costs, including his profit, then the consumers suffer it all, because a shipper is not a non-for-profit organisation. They are in the business to make money. If we reduce the cost of doing business at the ports, because over 90 per cent of goods that come into Nigeria come though the sea. How many people can afford freighting heavy equipment by air, except when it is an emergency?
Your association recently lamented that the various warehouses of members were filled up. Can you explain more about that?
You know the last time our secretary spoke on that, she said it would be a bit difficult to get the volume of the goods in the warehouses; she said with time, she would get them. But the fact is that even though I am a shipper I have goods in my warehouse that I have not been able to sell because the Form M of those goods was opened when the dollar was less than N1,000. But those goods were cleared when it was N1,600/$. So right now, those goods can’t be sold except when the goods are out of stock. That would be when I would be able to sell those goods. Otherwise, I am going to sell them at huge losses and nobody wants to do that.
What is the worth of the goods at the warehouse?
The cost is not going to change anything even using my own warehouse is not even enough. If I want to give information on that, I may probably have to talk to other people who have similar issues before I can give such information. I don’t want to use my own case as an example.
The Nigeria Customs Service recently announced a 90-day window to regularise improperly imported vehicles. What is the position of shippers on that?
It was a good concession. Let me also say that most times Nigerians, especially shippers don’t also help matters. I don’t want to exonerate the shippers in everything. Take for example, now the NCS is giving 90 days for improperly imported vehicles to regularise their papers and get everything right, some people would not go there until after 90 days. After that, they would come up with unnecessary sentiments, which for me shouldn’t work. The fact that you brought vehicles that have issues means there was a problem and you were given a window to solve those problems, grab that window and solve the problems. The one I don’t support is the situation where the government says from this period to this period, don’t bring in these goods and if you have by any reason ordered these goods before this directive, you have this number of months to clear them. But people from the day that announcement was made they would go and bring those goods and when the goods arrive and they have problems clearing them, they would become sentimentaL. That shouldn’t come up.
What is the position of shippers on the recent lifting of ban on forex for dairy importation?
I don’t know the wisdom behind that but if the wisdom was that there is not enough milk and diaries in the country and they feel it is affecting certain groups of people like children, I wouldn’t see anything wrong there. If there is a need for them, there is no problem. Just like rice for example, at first, the government wanted to encourage the local farmers and now the local rice is even more expensive than the imported ones, what is the wisdom? What has happened? So, if the government feels that there is not enough milk for some reasonS or the few people that are producing them are taking advantage of the situation and the prices are high and IT decided to allow the products to come in, there is no problem. If it is intended, because before the government takes a decision, there must be some kind of appeal. If the appeal is justified, I don’t have issues with that.
How is the fuel subsidy affecting your businesses?
Of course, you know that the fuel subsidy removal was a killer; it is crazy. Everybody is trying to go to green energy now to save cost. I normally tell my workers before you move, think twice if it is compulsory you must go and if it is not, then think twice. This is one thing I have seen that affects everybody no matter how rich you are. I can afford to run diesel but it hurts and pains me when I am running the generator, knowing that I am spending more. The running cost of my business has gone up by more than 500 per cent. That is the simple truth. The only thing we are doing now is to reduce the cost by going green and using solar and of course you know the initial cost of solar is high. And if you take that into consideration, it is only overtime you see things begin to get better.
The government is planning $1bn for port rehabilitation. Would you say the state of the port has been affecting your businesses?
Most times, when you hear certain statements from the government, you would be wondering if you are on the same page with them. For us, the issue of dilapidation is not even our concern. Our concern is are agencies at the ports doing what they are supposed to do. And then, roads and rails. Why would someone who is based in Aba or Onitsha bring in goods through Lagos? If we have good rails system and if our roads are goods, it doesn’t matter, but if you check the internal logistics of moving goods from say Apapa Port to a destination in the South-East, by the time you sit and calculate it, you would found out that what you think you saved in terms of freight have been lost in terms of internal logistics of moving the goods. So, I don’t know how to explain it but this is completely out of control. The biggest challenge is infrastructure. If you travel by road, in every state there are different stickers and different people who are collecting one revenue or the other. I want you to imagine if your cargo was on a train, of course, nobody is going to stop a moving train; nobody would come and stop the train to ask where it was going to. You would have saved a lot of stress and money. All the inland dry ports would have been more effective.