The desire for an expedited and fluid process of clearing goods from our ports has been consistently canvassed by all administrations in our recent past. Admittedly, the situation is not near as chaotic as the ‘ship jam’ of the cement armada on Nigerian waters in the early 70s, but the promises of successive governments’ of a 48hr clearance process is clearly yet to manifest, even after several reforms were designed to this end.
Furthermore, the erstwhile Pre-inspection regime which constituted an unnecessary drain on scarce foreign reserves has thankfully also been terminated, and the myriad paraphernalia of self seeking regulatory agencies at the ports has been reduced to the most critical five departments.Although, the concession of port facilities, may remain controversial, but to be fair, this arrangement has brought some measure of sanity into the delivery process, even though there are still concerns about the alleged current high cost of services provided by the ‘lucky’ Concessionaries.
Nevertheless, the usual customer distress and excessive delay associated with the erstwhile, port delivery protocol was largely the result of poor co-ordination of the delivery process and the arbitrary stacking of consignments which expectedly created huge problems for later identification and extraction of those containers for examination and clearance.
Expectedly, the protracted turnaround time for vessels, soon instigated inordinately high freight rates to Nigeria and therefore compounded the cost of all imports, including the cost of those raw materials required to feed Nigeria’s industrial establishments; consequently, domestic production costs and made-in-Nigeria goods, become less competitive against goods from low cost production exports of finished goods.
Regrettably, the high cost of clearing translated to an economic bonanza for the seaports and the economies of neighboring countries, where Port Management was relatively much more civil; ironically, the gains of these nations further compounded our woes and seriously challenged the integrity and the capacity of our security services, particularly the customs, in their efforts to arrest the huge potential revenue lost to government from the inward smuggling of goods shipped to foreign ports but, with Nigeria as destination.
Fortunately, the adoption of the Common External Tariff (CET) for ECOWAS countries has largely eliminated the attraction of lower tariffs as an incentive for importers’ preference for neighboring ports; but, we are clearly still some distance from satisfactorily fast tracking our port delivery process, so that clearance of consignments can be completed between 48hrs and a week after discharge from the vessel.
Nonetheless, we must give credit to the Customs Service’s dogged efforts in driving a robust set of reforms to facilitate clearing at our ports in recent years. For example, the successful domestication of pre-shipment inspections and the related foreign exchange savings are clearly dividends from empowering the customs service.
However, the PAAR or Pre-Arrival Assessment report is probably the arrowhead of the drive for best practice port clearance since the introduction of the manual ‘M’ or “Import Form” decades ago. The ‘M’ form serves as the approved formal registration required for all imports; its content includes related information on the identity and details of the importer and the bank through which payment for the order will be made. The supplier’s identity, their bankers and details relating to prices, quality, quantity and shipment instructions would also be stated on the ‘M’ form.
The consolidated data captured from all import forms established nationwide would guide the Central Bank’s management of the Nations total foreign exchange commitments, so that appropriate action could be taken to restrain inflation and also avoid forex shortages which could destabilse the Naira’s exchange rate. The new PAAR imports protocol also accommodates the ‘M’ form, but in a e-format, so that import applications can be completed online and simultaneously made available to all concerned parties on real time basis.
According to the Customs Service, the PAAR “was designed and developed by NCS officers in line with international best practice, essentially to enhance Trade facilitation, economic competitive revenue collection and border security”. Thus, the PAAR regime conducts documentary examination before the arrival of goods and provides “timely multi-dimensional risk analysis at every stage of the clearing processes; thus, adoption of PAAR is therefore expected to facilitate release of goods for those not requiring examinations/inspections on arrival.
Under the PAAR protocol, the Customs Processing Centre (CPC) is the central command for goods clearance; the CPC would automatically flag up high risk commodities for special scrutiny, so that the clearing process for such consignments would be directed into a designated red lane, which attracts more diligent evaluation and scrutiny before release is effected.
Similarly, the consignment of trusted traders or importers with long standing history of similar imports would be designated to the Green lane which would fast track the clearing of such consignments without any subjective intervention to stop the process. Indeed, this is as it should be and if everyone plays their role, it will definitely be possible to easily clear goods within 48 hours, particularly those goods which are consigned to the green clearance lane by the CPC.
Unfortunately, there are indications that all is not well, and there are reasons to suggest that even though a carefully woven structure has been put in place, the old mindset of some operatives in the NCS still persists; such self serving operatives still arbitrarily intercept consignments already designated for the green lane without any valid reason. Such subjective disruptions lead to extended delays before the release of goods, and the importer is usually at the mercy of a valuation officer who is determined to impose his own judgment in place of the laid down protocol for unfettered passage for goods on the green lane.
Such unnecessary clearance delays have the downside, of oppressive demurrage payments for the importer as well as the disruption of the production programme for industrialists who require the imported items as raw material inputs for production. Ultimately, extended delays prior to customs’ release could lead to production lines or total factory shut down and the possibility of temporary layoff of staff.
The implication of such human impediments to the clearing process is increasing cost of production, uncompetitive made in Nigeria goods, low capacity utilisation and gross inefficiency in the management of resources. Those companies which are victims of the high-handedness of aberrant customs officers may also ultimately have little or no profit to declare and would therefore pay much less tax than was possible to government. Consequently, the victim company, the government treasury and the Nigerian economy at large become distressed and uncompetitive simply because of the possible greed of some bad eggs in the service.
SAVE THE NAIRA, SAVE NIGERIANS!