Government automotive policy has affected ship turnaround and cargo dwell time negatively
High duties charged by Nigeria Customs Service (NCS) have forced many importers and clearing agents to abandon over 7,580 units of used vehicles at Port and Terminal Multi-services Limited (PTML).
Terminal operator at the Tin Island Port’s roll-on roll-off terminal complained that this has led to diversion of vehicles to neighbouring port. Between May and June 2022, the Nigerian Ports Authority (NPA)’s shipping data revealed that 3,650 used vehicles were ferried into the country’s roll-on roll- off port.
The shipping data revealed that no fewer than 3,930 used vehicles were waiting to be offloaded since June from 12 vessels with Grande Senegal leading with 350 units; Grande Cameroon, 300 units; Grande Lagos, 400 units; Grande Tema, 400 units and Grande Cotonou, 400 units.
Other vessels jostling for berthing space are Grande Togo with 350 units; Repubblica Argentina, 300 units; Grande Abidjan, 400 units; Glovis Condor, 350 units; Repubblica Argentina, 350 units; MSC Cristiana, 450 units and Grande Costa D’’avorio, 350 units.
Agents and importers fear that the situation could lead to a fresh port congestion with its attendant negative impact on ship turnaround and cargo dwell time. Also, the Managing Director of PTML, Tin Can Island Port Complex, Ascanio Russo, explained in Lagos that Nigeria was losing huge revenue and job creation opportunities as a result of the diversion.
He noted that in the last few weeks, there had been unprecedented level of diversion of imported cars meant for Nigeria to Cotonou Port. According to the managing director, “most of the vehicles, which are for Nigeria, now come in through Cotonou Port and this is of concern to us.
For many years, we had the automotive policy, which made our port the preferred port for the importation of vehicles into Nigeria, but in the last one month, we have seen traffic going to Cotonou.
“The diversion is as a result of some trade policies of government, which are making the importation of cars into Nigeria very expensive. We all know the state of Nigeria’s economy at the moment and people seem to be desperate, so they go to Cotonou and find a way to smuggle these vehicles into Nigeria.”
Ascanio stressed that the diversion had negative economic effect not just on terminal operators but on all stakeholders in the automobile value chain, including artisans such as mechanics, vulcanisers, technicians, spare part sellers and others.
Also, a cargo consolidator and Managing Director of Scepter Consult Limited, Jayeola Ogamode, explained that the cost of vehicle clearance at port was more than the actual value of the vehicle due to government’s new policy of Vehicle Identification Number (VIN).
A member of the Association of Nigerian Licensed Customs Agents (ANLCA), Rilwan Amuni, also said that importers were finding it difficult to clear their vehicles because of tariff charged by Customs. He said: “Clearing agents are now aware that Customs are only arm-twisting them to generate revenue.
Vehicles are in terminals uncleared due to the huge cost of clearing them. Who do we want to tell that the same amount of money we used to buy vehicles abroad is the same amount that we are paying to clear vehicles right now?”
Amuni opposed the implementation of the controversial VIN valuation system introduced early this year by NCS, explaining that the system was tacitly used to increase the import duty on vehicles. He noted: “Before August, Customs will reverse the policy because they can’t continue to generate dwindling revenue. In fact, they should forget to meet up with the target. The port is dry and no agent is willing to come and clear vehicles.
“The funniest part of the whole show is that Nigeria is now focusing on fairly used cars in order to generate revenue.
You can’t try to get a brand new car abroad and want to clear it without being financially okay.” However, the NCS’s Tin Can Customs Command’s spokesman, Uche Ejesieme, said, “We can’t do without situations like this where agents are not willing to clear their vehicles because there is a change in the clearing process.
“All over the world, automation is the latest trend and we are ready to follow it. However, every grievance raised by the agents is being worked on. That is why we are ready to train the Data Direct Officers (DDO); these are the persons who input the agent’s vehicle data into the system. We shall be training them on how the evaluation system works.
On the part of the cargo not being cleared, according to the Customs extant law, if a cargo is not moved out of the terminal for 28 to 29 days, it would then be treated as overtime cargo.”