FG Should Exempt Previously Opened ‘Form M’ From Hiked FX – Shippers

By Kenneth Jukpor

Nigerian shippers have beckoned on the federal government to exempt cargoes at the ports and those on the high seas from the recent increase in the exchange rate from N326/$ to N361/$ to aid clearing cargoes under the COVID-19 pandemic.
Shippers under the aegis of Shippers Association Lagos State (SALS) lamented that the increment violates economic decency, even as they pointed out that the exchange rate has been increased twice in the last six months.

“The new rate should not reflect on Form Ms already approved by the Central Bank of Nigeria (CBN). It is the approved rate on the Form M that should be used to procure foreign exchange for each shipment and also effect transfers to suppliers.”

“Therefore, the excess fund being raised through Customs have no bearing. It is believed, maybe, that the excess fund is sent to an escrow account domiciled in CBN for no useful purposes. It is expected that the CBN should have supported entrepreneurs through flexible bank loans with low interest rates,” the President of SALS, Rev. Jonathan Nicol told MMS Plus newspaper at the weekend.

He stressed that the government’s panic due to global economic downturn shouldn’t become a fiscal burden on shippers and the entire citizens of the nation, even as he noted that the maritime sector is the only inlet available to generate revenue at the moment.

Nicol, however, posited that the sector has reached a stage for the declaration of emergency following the irrational actions of the government.

According to him, the increased exchange rate would induce shortage of cargoes over time, as it is already reflecting on industries, importers and shippers while exporters will have to source additional funds to clear their cargoes trapped at the ports due to the COVID-19 pandemic under the one month stay at home order of the Federal Government, yet all the goods in the ports now will attract the new rate.

“As it is, shipplers join our colleagues in the Freight Forwarding trade that there is no palliative for Shippers. We do not think it is wise to continue in a trade that is not profitable. The aftermath of this action will induce, reduction of staff across the board in the sector. Running cost will increase. Industries will find it difficult to achieve their targets as projected”, Nicol said.

He also noted that new exchange rate mars the efforts of the freight forwarders under CRFFN, Nigerian Shippers Council (NSC), Nigerian Ports Authority (NPA), and enormous sacrifice of other port stakeholders during this period of pandemic and consequent lockdown.

“It is only wise to reverse the trend of failure. All the goods now at the ports should be exempted in this current increase of exchange rate increase. This includes goods that are in the high seas with approved Central Bank Form M. Government is increasing cost of doing business and negating the Ease of Doing business in Nigeria. The 7.5% Vat and #361 exchange rate is deadly”, Nicol said.