Charitable Imports: Addressing The Multifaceted Challenges

By Kenneth Jukpor

There are over 17.5 million orphans in Nigeria and most of these orphans depend largely on charitable items to survive, according to the Nigerian Network of Non-Government Organizations (NGOs).

While this information emphasizes the need to be humane in handling charitable imports, the high level of suspicious by government agencies as a result of dishonest business persons disguised as charitable importers, has led to an impasse in clearance of these items.

Despite waiver of tariffs provisions for charitable goods, more than 50 percent of the items are trapped and abandoned at the ports or borders, while another 30 percent are allegedly sold by dubious business persons who hide under charity to do business.

In a bid to address this concern, the office of the Deputy Senate President in collaboration with the Nigerian Shippers’ Council (NSC) organized a seminar on the theme: “Ease of Shipping and Clearing Charitable Items In Nigeria”

In his welcome address, the Deputy Senate President, Senator Ovie Omo-Agege noted that there were problems in classifying items for the purposes of waivers, rebates, exemptions and other privileges for charitable items.

“There is often the confusion at the point of clearing between charitable items and other categories or items, especially the commercial ones, as they all, sometimes, go through the same processes. The result is that often, charitable items get entangled in high demurrage charges sometimes caused by delays in clearing due to denial of import duty waivers by relevant government ministries/agencies, late application of necessary documents by non-profit organizations, among others. These often cause undue loss of items and financial losses” the Deputy Senate President said.

Omo-Agege, who was represented by the his Special Adviser, Non Governmental Organisation (NGO), Princess Modupe Ozolua lamented that this challenge also extends to the denial of some life-saving relief materials to places they are needed, particularly disease-ravaged areas and Internally Displaced Persons (IDPs) settlements.

“All stakeholders including Civil Society Organizations, other not-for-profit organizations, in concert with the government, must comply with necessary application processes and ensure charitable items are not used for commercial purposes. Rather they should always get to the targeted beneficiaries” he said.

The Ministry of Finance is unwilling to give Import Duty Exemption Certificate (IDEC) easily, because of the abuse by some shippers who import commercial goods as charitable donations.

With Nigeria ranked number 3 in the world for terrorism behind Afghanistan and Iraq, investigations show that some NGOs and NPO have not only being involved in money laundering but also engaged in terrorist financing.

Recently, the Special Security Unit Against Money Laundering (SCUML), a unit of the Economic and Financial Crimes Commission (EFCC) was created.

The body is responsible for regulating the activities of non-designated financial institutions in Nigeria wihich includes non-profit organizations. NPOs and NGOs are to register with SCUML to be regulated cleared from acts of money laundering and terrorist financing.

“Before NPOs and NGOs can operate any bank account in Nigeria, a circular by the Central Bank of Nigeria stipulates that they must obtain SCUML certificate and the certification process is free of charge. While we are mindful of the fact that we don’t want to stifle their operations, the reality is that most NGOs abuse the process. We go to examine physically to ensure that the waivers they got are utilized for the services and beneficiaries. We have to ensure that the items weren’t diverted because that would translate to money laundering,” the SCUML Director explained.

Narrating an incident of a fraudulent NPO, she said; “Recently, an NPO in the Niger Delta with the objectives centred on humanitarian services like human capacity development and poverty alleviation for the less privileged. The suspicion was triggered when they received an inflow of N98million and another N95million within a short period.”

“When analysis was conducted we discovered that the total inflow in about a year was over N238million while the total outflow almost equaled the inflow. The interesting thing was that the huge deposits were followed by huge withdrawals by one of the trustees at the NPO who was also a staff of the government agency disbursing the fund. That shows that there was no corporate governance and the NPO was set up to siphon fund from the government agency. There was no evidence of activities related to what the NPO said they were set up to do. It was a sham NPO.”

Speaking on behalf of Nigeria Customs Service (NCS), the Zonal Coordinator Zone A, ACG Kaycee Ekekezie stressed that improper documentation has been one of the major problems.

“NGOs must get the required documents outlined by the Ministry of Finance before they approach the Customs. Corrupt practices by importers and various port officials have also affected this process”, she said.

She stressed that there must be more awareness on the procedures to bring in charitable items so that genuine NGOs don’t run into frivolous challenges that lead to delays.

Whilst stressing that Customs is very insistent on documentation, she said that the challenges associated with import of charitable items would be easily eradicated if all hands are on deck to address the bottlenecks.

“The NGOs as well as the government agencies should all know what is expected of them at every level,” she added.

Frank Oshanipin, a principal officer at the Ministry of Finance said the Ministry maintains MoU with charity organizations, which naturally gives them tariff exemption privileges, but unfortunately, many of the NPOs are not taking advantage of the MoU.

“It appears that many NGOs do not understand the processes involved in getting their IDEC, but the ministry operates an automated system that enables them process the document online. We are also wary of granting IDEC because we know that there a lot of sharp practices by people or organizations who want to import commercial goods in disguise of charitable goods,” he said.

According to Oshanipin, a limited liability company cannot receive charitable goods. It therefore means that only non-profit organisations can import charitable goods. He said charity organisations in Nigeria which wish to import charitable cargoes or receive same from donor organizations abroad would need to provide a letter from the donour attached to their application for IDEC. The application is then forwarded to the relevant ministry for the items being imported or received.

At the event, the Ministry of Humanitarian Affairs, Disaster Management and Social Development called for the establishment of new specialized laws to ensure ease of shipping and clearing of charitable items in Nigeria.

According to the Assistant Director, Humanitarian Affairs, Mr. Femi Alaka, the Ministry which was established in August 2019, has received numerous complaints from NGOs on challenges facing import of charitable items leading to high demurrages and abandonment of cargoes in some cases.

Besides the SOPs, he recommended that non-Customs processes be streamlined and enhanced awareness on the processes. He also admonished all government agencies involved in the process to collaborate and show seriousness in expeditious handling of such cargoes.

Speaking from the prism of freight forwarders, the Vice President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto, said “It is easier to clear a ship load of containers with commercial goods than to clear one container of charitable items from a Nigerian port.”

“Within the Customs circle, your application would need to go through over seven offices from the ACG of Zone to the terminal Deputy Controller. Even if we start documentations months before shipping, the goods would always get here with documents needed for clearance not still ready”

He beckoned on the national assembly to amend the Customs Excise Management Act (CEMA), while domesticating relevant provisions of CET and adopting it part of the SOP for importing and clearing charitable cargoes.

“Many charitable goods are lying in waste at the ports; the figures for demurrage are alarming. We know there are genuine concerns, yes, importation of charitable goods should be controlled, but we need a seamless operation,” he stated.

As part of efforts to address the bottlenecks leading to delays in clearing charitable items at Nigerian ports, the Nigerian Senate and port stakeholders initiated plans to develop a simple and efficient Standard Operating Procedure (SOP) to ensure ease of shipping and clearing of charitable items in the country by setting up a committee.

The committee set up to constitute the SOPs include representatives from the Ministry of Finance, Ministry of Humanitarian Affairs, Disaster Management and Social Development, United Nations Office for the Coordination of Humanitarian Affairs, NSC, Nigerian Ports Authority (NPA), Customs, Seaport Terminal Operators Association of Nigeria (STOAN), National Agency for Food, Drug Administration and Control (NAFDAC), Shipping Association of Nigeria (SAN), Special Security Unit Against Money Laundering (SCUML), Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) Nigerian INGO Forum, the SA to Deputy Senate President on NGOs and thee Director-General, African Centre for Supply Chain, Dr. Obiora Madu.