HOW TO MINIMIZE CHALLENGES IN IMPORTATION

HOW TO MINIMIZE CHALLENGES IN IMPORTATION
Mr Femi Wusu

Mr Femi Wusu is the Import Manager of Tiger Shipping limited. In this interview with Emeka Chukwuaku he talks about the challenges in importation, and how the challenges can be surmounted, he also mentions the role of the Government in importation processes and how PAAR has contributed in lessening some the challenge in importations. Read On:

What are the challenges you encounter in importing goods especially the overlap from December last year?

If you consider importation in the country, you will find out that the years prior to 2014 cannot be compared with 2014 because of the introduction of Pre-Arrival Assessment Report (PAAR). Now most importers are minimizing their import because of the inconsistency of PAAR. For example, if the value of a cargo is $5m, in another instant the value of the same cargo will be $7m or even decrease to $4m in another instant. So importers find it very difficult to pinpoint how much they are going to be charged any time they are bringing goods to the country and as a result have minimised imports. So, here in the port, there were not much especially during the festive period compared to 2013 or before the introduction of PAAR. So in a way PAAR reduced the challenges.


How do you get your Cargoes?

Most shipping companies now have their own clearing department using the opportunity to ‘market ‘through their clients. That is what is going on now. I have a case like that in October, one of our importers said that someone sent a mail to him requesting him to start patronizing them and listed out the benefits that will accrue if he did so, but I told him not to listen to him that they are only out to pursue their own agenda not his own. The shipping business cannot function effectively without the clearing agents. So some of these shipping lines are trying to cut off the job of the clearing agents but that cannot happen because there are clearing agents all over that ports of the world, and they play important role in the value chain. In more developed countries of the world, shipping operations are automated; everybody in the value chain knows where his duty starts and ends. The moment you pay your duty, you hand over to the shipping company, who will pay you charges and hand over to the clearing agents, and the clearing agents will go to the port, verify from customs, do physical examination and  from there, off he goes, but in Nigeria things are not like that. You will find out that the shipping company or customs will come up with something that will delay the process. Even in Ghana, service delivery is quicker .A friend there told me that at most within the space of three days a cargo is discharged and ready to leave the port because every process have been ratified.

I think we should try to make adjustments to ensure quick service delivery at our ports to facilitate trade. Some of the shipping lines are really making things difficult for others. One of our friend sent us mail to know if we can do door to door delivery, that that is what some shipping lines are now doing mainly just to cut off the agents but which local agent can do that in the light of the inconsistencies in our clearing process? It is not easy. You people that are nearer to them should talk to them, the Customs and the shipping lines.

What is the cost of shipping cargo?

The cost varies because of the goods. In most of my transaction now I make use of the Nigerian Trade Hub, that trade hub is a very good package, it is unified. If you are using trade hub effectively, you don’t need PAAR again. The moment you are in that system, put your invoice value, put your freight and every other thing, then your charges will automatically be revealed to you. You can also know how much you are going to pay if you are exporting to another country. The trade hub is good because it can help importers stay in the comfort of their homes and find out how much they are going to be charged for their cargo, but it is not working because they are not allowing it to work. Do you know that the federal government still collects 1% charge for inspection agents? What is the essence of the 1%? According to the Comptroller General of Customs, the 1% is for inspection agents, he said that the Federal Government wants to be doing PAAR by themselves.

So, back to your question, the cost is determined by the goods. The best way you as a freight forwarder should be up to date is to verify anything your importer tells you. If he said that he bought a particular good for $5, make sure it is true by verifying through the internet, by that you will not be in trouble or suffer loss.

Is there any increase in shipping charges?

I think the increase can only be how Customs handle PAAR. If the value of your cargo is say $7m, customs will double it to $14m not considering you at all. They just have the mindset that you have done something wrong to deceive them or swindle the government, so they will just double the amount for you to pay. These things are very bad and are affecting the layman.

 

For example, you know that many goods imported from China are of inferior quality, you cannot compare it with goods imported from Japan. So when a good comes from China, Customs will not look at its inferiority but will grade it like the same type of good that comes from Japan even when it is glaring that the one from China is very inferior to that of Japan. They are of the assumption that when the good enters the market, people will not be able to differentiate them and will buy them as made in Japan product. They may be right but they can be better .Our Customs are linked to the grid of World Customs Organisation (WCO) so why can’t they be as effective as the Customs other developed countries of the world? PAAR is really a welcome idea and the trade hub, a very resourceful package but not all the stakeholders have been able to come to terms with the way they work. More awareness is still needed in other to let people into how they work well. I think with time that will happen.

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