By Kenneth Jukpor
Nigerian Shippers’ Council (NSC) and the Central Bank of Nigeria (CBN) have entered partnership to curb the menace of foreign exchange (forex) roundtripping in the country.
Roundtripping is a strategy used by businesses who sell an asset to another business with an agreement that the asset will be bought back at a time in the future. The strategy is used to increase the apparent amount of revenue and sales that have been made during a specific period of time.
At a recent stakeholders meeting, NSC and CBN; together with shipping agents, freight forwarders, ship chandlers, shipping lines and other stakeholders in the nation’s shipping sector, agreed that the utilization of disbursement accounts by shipping agents should be included in CBN’s new Forex Manual.
Speaking at the event, the consultant to Shippers’ Council, Mrs. Dabney Shall-Holma, noted that the use of disbursement accounts in shipping is the global practice as recommended by Article 4 of the United Nations Conference on Trade and Development (UNCTAD) minimum standards for shipping agents.
Disbursement accounts are specific accounts opened by the Principal (ship owner or charterer) for the purpose of sending funds required to settle charges incurred by the vessel locally. These charges are usually in foreign exchange because it is assumed that the principal must have transferred the funds to the disbursement account of the agent in foreign exchange.
In his opening remarks, the Executive Secretary, NSC, Mr. Hassan Bello explained that maintenance of a disbursement account as provided by ‘UNCTAD Minimum Standards for Shipping Agents’ stops the agent from going to the local market to source foreign exchange to settle charges incurred by the vessel locally.
Bello who was represented by the Director, Legal Service of the Council, Mr. Samuel Vongtao, identified such charges to be covered by the Disbursement Accounts as those collected by the Nigerian Ports Authority (NPA); Nigerian Maritime Safety and Administration Agency (NIMASA); ship chandelling costs and other local shipping costs.
On his part, the President of the Association of Nigeria Licensed Customs Agents (ANLCA) Mr. Tony Iju Nwabunike, welcomed the initiative even as he opined that CBN carryout proper survey to discover the reasons why the policy didn’t thrive when it was first introduced in 2006.
Nwabunike saw the development as part of the Federal Government’s commendable efforts to enhance the ease of doing business at the nation’s ports.
Meanwhile, the President of Nigerian Licensed Ship-Chandlers Association, Dr. Martins Enebeli sought the intervention of CBN and Shippers’ Council in the forex challenges facing ship-chandlers in the country.
Dr. Martins lamented that indigenous ship-chandlers were usually paid in naira rather than dollar, a practice that left chandlers with the challenge of sourcing forex from the open market in order to pay their duties to NPA.
