Why The Market Is Flooded With Fake Products—Ex-ANLCA Boss, Shittu

On October 15, 2023 , Prince Olayiwola Shittu, turned 73 years old in good  health. The birthday got some quiet mentions as he choose to do it. He is the chief executive officer, Skelas group of companies and former president, Association of Nigerian Licensed Customs Agents(ANLCA). In this interview with MMS Plus, he makes an x-ray of the port system and government policies and their impact on the economy. He explains why the market is flooded with fake products; says,”You can’t have revenue target and have trade facilitation at the same time”; he says the storage charges increase is a function of greed. He left a question begging for answer: How many people have been caught and sent to jail by customs for illegal activities? Shittu in his assessment of ease of doing in the port says it is a huge failure, asserting unequivocally that no government agency in the port is free from corruption and is quick to add that Nigeria is not ripe for the African Continental Free Trade Agreement(AfCFTA). Excerpts:

How much confidence do you have in the African continental free trade? 

I have a very different opinion on that, there’s so much hype on the issue of African continental free trade but the down side of it is that Nigeria is not ripe for it. That’s my view and I may not be of the same thought with others too. The fact that Nigeria is not technologically and mechanically advanced, the laxity on the path of government to address the issue of energy has led to the inability to have the capacity for production.

What the free trade means is that production across Africa should move freely. What level are we in production when we are a consuming nation and that’s what has affected the dollar exchange rate because at the end of the day, if you don’t produce to earn, you are lost. How do we now give effect to free trade in Africa when the lessons we learnt in West Africa under ECOWAS is still rebounding till today?

 China took advantage of it, dumping their goods in West Africa, repackage the consignments and bring them into Nigeria under ECOWAS Trade Liberation Scheme(ETLS). Nigeria customs went to the West African coast to even see where they are manufacturing. It was discovered they are repackaged from China, They are being repackaged with made in Ivory Coast imprint. It was believed that there must be a factory where they are producing but because there’s none, most of these countries are just dumping ground and then they ship them across the border or they smuggle them in. So, African free trade, ECOWAS free trade, what advantage has it given to Nigeria? None! 

In fact, when I was the president of ANLCA, we did a lot of research, we traveled  all over those areas where I saw slippers made in Aba imprint being flooded in the West African coast, I was moved, so I said to myself, so our Aba made slippers is being worn in Liberia, Ivory Coast and even Sierra Leone! Only for me to now discover later that those guys set up their own factory and started producing slippers.

Slippers from Aba no longer come in because no one is buying, they would rather buy their own product. In Nigeria, we are not buying our own product, rather we buy from other places, that is the major problem in Nigeria and the bottom line, however,is that our energy is not enough to set up a production line. You can’t do it with solar, petrol or diesel. We need to address the root cause.

Yesterday, I saw in one of the news items, Obasanjo advising the government to ban the importation of Adire (locally made tie and dye material). Adire, that is unique to Ogun State, now the made in China has flooded everywhere, just like made in China garri.

People have to progress from the raw material being harvested, to the second level of processing, for them to make it exportable, reliable and attractive. How can we compete with South Africa when they have over 40,000 megawatts of energy and we are still struggling with 10,000 and it fluctuates even down to 4,000 megawatt?  So we are just the ones shooting ourselves in the foot.

Therefore, I am of the opinion that free trade cannot add much advantage to our economy, so we should not jump head long into it. Neither the ETLS nor the African Continental Free Trade, even when it comes to the world free trade, can guarantee that Nigeria will not be turned into a dumping ground and they are already doing it. We don’t need to say they will not and there are no structures in place to make sure that things are not smuggled in.

You know why, majority of custom officers are in the port of entry in the name of battling smuggling. But smuggling is done outside. If you go to America and you check the distribution of  their customs officers, they are more in their border post, than their offices. They make use of customs brokers to do declaration and, of course, their own is very straight forward. If you try play the sort of pranks we play here, it’s seven years  jail term and they are well paid. So what are we going to use to compare with them?  That’s what I can’t find. You go to the port excess distribution of officers, three to four officers would be doing what one person can do with a computer. We are not just ready, so I don’t know how Wale Adeniyi will turn things around. He needs to reduce the number of people at the border post and then increase vigilance against smugglers, then we can now say we are getting there little by little but it has to be supported too with capacity for people to manufacture.

 We have also noticed that, we have not been able to review the ECOWAS trade liberation scheme, to have at least a full trade, this one that has a zero to five percent tariff band. Don’t you think there should be a review of the existing regional trade scheme to help package the free trade for sustainability? 

Zero to 5 per cent tariff of the ETLS, is the money we are paying to help build the West African countries.

Now, they are benefitting therefrom because Nigeria is a larger market than their own. For now, they believe that Nigeria has a docile manufacturing sector so they are investing in manufacturing sector and when they now send it to us here, we are expected to pay duty. They are not competing with us at all, they are very hostile. All these French speaking countries around are very hostile to anything Nigeria,that is why the ETLS has failed. It was supposed to help them because we have a large market. There’s no way you can compete with us, you must beg us, but those guys don’t beg anybody, we are the one even begging them now, to help us stop smuggling by closing the borders and that’s a panic measure for me.

 We need to address the internal disconnections that we have. So those ETLS will continue to be there, they don’t want it reviewed because it will not pay them. Go across the border to see how they are using detergents to wash rice, dumped by China and Thailand. We started making our own rice, everyone started believing in Abakiliki rice, Afada rice, made in Nigeria rice, it was beginning to be a path to help our economy but gradually with this change in policy, rice  is now becoming a free import. Then what happens to those who invested? Lagos State, which invested in one of the best rice production setups in Imota, what will happen to it?

They are looking at the revenue because that’s the one they can share without your consent. They will do something that has stood the test of time for impact, someone will come out with another policy and we will do it without anyone looking at what the advantages are.  Nigeria is just a bed of experiments, all what Tinubu has been doing are experiments. That’s why we see all these galloping decisions and there are more cooks than the broth.

 How does the blue economy impact freight forwarding profession? 

Blue economy is being touted as if one is just opening a page of a book and about to read a new chapter. I don’t know what they are bringing to the table because NIMASA is all over the places now promoting blue economy. What is the ultimate aim of naming a process blue economy? If it is utilizing the marine resources that we have in this country, we don’t have to make noise, all we have to do is to fine tune the process.

Look at the late Mrs. Margaret Orakwusi, may her soul rest in peace, the fight she fought over our fishing right alone and the inability of local operators of these vessels to maintain their vessels. When you are putting higher duty, how does it help? Those are the things they should be tackling on their own.

Somebody reminded me about the Nigeria’s development plan for 2020, was it not in this country? As if 2020 will never come, we are now in 2023. $1.5 trillion naira is dreamt in the air, how does it come?

All I know is that, there are hidden income that are not available to federal government, but if you package it well, something will come out of it.

Customs brokers in Nigeria is a generic name for anybody who wants to be in the port to say, “I am a customs agent”. A customs agent who engages in under-declaration in America is 7 years imprisonment without option of fine. They value their licence and they must go for training every year, no body trains us here. Now Nigeria Customs is calling us Customs representative in their new act, we are no longer representatives of the importer, that’s what it means.

World Customs Organisation (WCO) also defines a Customs broker as a representative of the customs administration. So, we are now supposed to defend the customs service and Customs Excise Management Act(CEMA), rather than the importer, that’s the challenge that a lot of our people are not even aware of, that’s part of the blue economy.

Where is the training to expose you to your responsibilities. When I was the President, we were doing training, we brought in people from Department of State Services(DSS) to tell us about the security implications of our job in the port. People said what really concern them, that theirs is to do their SGD and go away, now we are doing online declaration.

How many people are conversant or have enough tool technologically to meet up? Customs is not training anybody, individuals are not training themselves either. On my own, I decided on my table one day to go for a training on how to handle hazardous goods, I went to Florida and spent a week and learnt a lot about what I never knew on the handling of hazardous goods. There came a company that wanted an agent with experience or even an evidence of training on handling of hazardous goods, I got the job, I never knew it will come. So that’s the reason I encourage our agents to be involved in training but people are more interested in how much money they could make, how many containers can they fly.

It is the government that empower people to use every available means including power of the government to enrich themselves. When you give someone a target that you must generate 10 million by tomorrow and you have the capacity to generate 15 million, government wants just 10 million, you give them their 10 million and the rest goes to your pocket. At a time you will be more interested in what goes into your pocket than what goes to government, so when you tell government they don’t want to hear too.

That’s why this power of discretion given to government agencies is what is causing corruption, also. So that’s why the federal government is the culprit. You make a declaration, you argue classification, the heading, in the tariff where you put your declaration and it will take about 60 or more personal interaction or interface with an officer of the government, whether customs or quarantine for you to convince him your declaration is okay because he is looking for another declaration that is said to be higher and then he will say he is thinking of government money but he is thinking of his own and then how he can bargain on other alternatives so that he can make something.

They even encourage what is called Internally Generated Revenue, IGR, but do they issue receipt?  Meanwhile, the government only takes 40 per cent of the IGR. So if you are a CEO of an organization that is making the money, all you need do is to give 40 per cent to government, is that not a good business? You cannot have a target and have trade facilitation, they are opposite.

Look at the benchmark which they said any container that comes in, we must pay a certain amount, no body want to know what is in there, whether you even need to pay more to government. All you need do is give us our own, we will meet our target with these number of containers. Now they are finding it difficult to import, with this exchange rate, importation is no longer attractive.

Now, the Chinese are all over the places in Nigeria’s agricultural sector. And agriculture is one of the areas where our economy would have gained value, but our farmers now load their products and go to Ghana and get certification to Europe in order to be accepted in Europe. All those noise they are making about arrangements for export and all that, go and investigate how seamless they are. The certification in Benue Republic is more honoured internationally. Nigerian containers are being destroyed over there.

How long does it take you to stay in the port waiting for documentation and clearance? Some items grow mucus by the time they get to the destination, and as a result, they say no, this is not the standard. Even our Quarantine service, the certificate they issue is being undermined, maybe because we have not gotten to a good level or adequate training for the personnel and they are also aware that Quarantine personnel in Nigeria when you give them money they issue out certificate, they don’t even know if your goods are at a standard expected.

That is why ordinary planks and woods use to package stuffs in the container is what they will hold you down and you have to pay but does the infested wood after payment suddenly become un-infested. If you say something is wrong and you get money, after payment, does it make it right, because everything is based on what we can get?                                       

 NIMASA is singing blue economy but they don’t seem to sit down and think where and how capacity for this can be developed as well as how this will lead us to and how we can get the best out of this, what’s your take on this? 

Policy formulation in Nigeria is limited to few people sitting down together, using their individual experience and coming out with a so called policy.  They are not making use of input from stakeholders who are going to be drivers of the policy, is that not wrong?  When you now sit down and say, they will follow our road map and all the road maps are always heading to crash sites, can’t you make a u-turn?

 Everyone that has been discussing the blue economy seems to be scratching the surface. We have been talking about all this all day, what about the capacities, what constitutes these capacities, how do we build these capacities? Where are the equipment, infrastructure and the funds? Is there fund for this, how do you galvanize these and put them together?

Can we do blue economy without power? In the absence of power, what will you produce that will meet with cost from the one the Chinese are bringing down here? If you don’t get this issue of power settled, blue economy will be a mere dream and one solution would be to decentralize energy production in Nigeria. If a company can take on the whole of FESTAC town, and generate  light for 24hours, people will be ready to pay ₦50,000 a month. That is the best way to decentralize power generation. All of us cannot be in Aso Villa but those who make noise about it, that’s the government, should have a listening ear about what is being said outside.

Under blue economy we want to have our own vessels, where are we starting from, where are the funds, that’s the issue?  We just got 10 billion dollar in relief to shore up the naira yet from the money they got someone is already sharing it. They say they are going to use it to shore up the naira but there are practical usage of that money that may not help this economy,in a country that when one price goes up, it doesn’t come down. If this peaks now, let’s say a dollar to ₦2000, mark my words, in the next ten years, it cannot be less than that, it will rather be more. 

I know lifestyle changes will also help us, if we buy made in Nigeria materials and the made in Nigeria also improves their quality, better for us. We have less dependence on forex to bring on the same thing we can produce.

 During the negotiation the Nigerian Shippers’ Council and terminal operators, there was a concession about  the storage charge changes, I was told they will abolish it because they inherited the spaces from NPA and the dollar rate does not affect that and we don’t understand why they should be making increment in that and the rest of them. They also moved the free days from 3days to 5days, they are now stuck at 400 percent increment. A group of shippers are also saying they were not carried along. How do you see this?

It is being a long shoot, my position will be tailored by reality, not the sentiment of being a freight forwarder and all that. When the establishment of off-dock and outside terminals were mooted, we were part of the discussion.

The idea was to make the port a transit point. As the cargo is landing, it Is screened by scanners, they move from there straight to bonded terminals, from there you go do investigation, inspection, etc and decongest the port. The port are meant to be transit area, but now along the line, importers represented by their agents now prefer to leave the containers in the port rather than go look for a warehouse outside because the charges of the container terminals are higher than the sea port terminals, the additional cost of taking it from the port will be added to  cost and those who have bonded terminals borrowed money to develop the place and they need to pay the money back so the urge to pay back quick and make  own money now becomes the issue.

Initially, the seaport terminal people saw it as an opportunity for them to make more money. So it is better for them to allow the container occupy the space and make money not minding that they are undermining the maritime regulation that says there should not be more than five stacks but we have some that are seven stacks which is not safe.

They are making their money whether it’s down, in the middle or on top, you all pay the same amount. Along the line, they also realized that when their terminals are congested, vessels don’t come because you cannot put your container on water, so vessels have to wait for the port to decongest and the faster containers are removed from the port, the more money they make, the more activities go on.

Now the challenge is, how do we transfer this consignment to off-dock terminals? Who’s going to pay for the new handling charges including transportation to the off-dock terminals and the empty container?  How do they find their way? So the whole thing became clumsy and the only way was to increase their storage charges. They have been doing their increase long before now but they needed to do something seriously, is like having a wound that has refused go and you decide to shave the whole area and that’s why they came with that elongated difference. But they are thinking of their own economic demand, the cost of servicing the terminal.

First of all, government should be providing electricity, they don’t do that and they have been running that and they don’t remove it from the royalty they are paying. So they bear the cost along with it. I’m not giving an excuse for them but because of their own greed, they decided to allow congestion in the port without sending out containers to off-dock terminals. We have enough off-dock spaces in Lagos here that we can clear the whole containers in the port if they allow them to go. So it is the fall out of it now that is pushing them. The shipping companies also have their hand in it, for every container, they have deposit to collect, the number of days that those containers are held without being returned.

 However, it is the responsibility of NPA to enforce that. NPA  should have holding bays where empty containers can be returned to and at their own cost remove those containers from there because they have been paid for from the point of export but nobody is following that up.

 Nigerians are losing so much money from these detention charges, already but shipping firms also want increase in their charges, that’s the reason some will say that they are not carried along. Nobody has sat back to look at why there must be distortions in what is being calculated or not. If you now say, it cost us more therefore we are increasing by 600% what about the fall out on the shippers who brought the consignment in? You are adding 600% cost, at the end of the day the shipper does not have the capacity to even pay those who worked to bring the container in. Many agents don’t even get their charges anymore  after the man has spent so much, including the hidden charges. There’s no government agency in the port that is free of corruption. I have challenged the media at a point when I was the president, using the immunity of office, send me two people let us run a bill of lading from the beginning to delivery. Your own is just to follow me, observe, as we drop money, be writing it down, go back and see what it costs but nobody took the challenge because no one wants to stick his neck.

If someone brings in a consignment that is prohibitive, there is a step you must take, meanwhile you want that prohibitive material to go and you want something on it, so that it can benefit you, you can’t eat your cake and have it. It is either you work for government or you work for outsiders. You can’t be in government in charge of determining what should go in or not, some of them with your discretion, that discretion is the reason you are seeing fake products.  I went to Houston, do you know that as soon as the vessel is coming, you are getting what we call an alert twice a day, all the paperwork are online, they will just tell you to send your transporter. They release paper without you leaving the table, you are not involved in examination. You give the release paper to the transporter, he knows where to carry the cargo and deliver, keep the records and just make sure you pay your correct duty. Why can’t we do that, here? We can but the penalty for corruption is very minimal. How many people have been caught and sent to jail since we have been hearing about consignment seized? How many of them have gone down?  Let them give you the statistics of people that have been jailed for corrupt practices in the port.

 Is this part of the ease of doing business?

There’s no antidote to ease of doing business except attitudinal change. If we live according to our earnings, and you manage your life, you don’t have more children than you have the capacity to take care of. Let’s learn from our grand-parents who had 15, 20, 30 children, look at their friends who had  two or three children and could cater for them and ask yourself if you have two or three, is it not enough for you to cater for?  Money that is gotten freely is spent freely but money you sweat for must be calculated before spending. So, the ease of doing business cannot work. It was put under the office of the vice president, which other level of authority do you want?  They ask shippers council to drive it, all the other government agencies are members of this Nigeria Port Process Manual(NPPM), still there is no ease of doing business. You ask us to go online and we have done that. How do you interpret the fact that a container has been scanned, and still go for 100% examination and then when you ask for release, a lot of issues are brought in. So many bodies are involved even the police that witness the examination will still ask you to reposition it at Zone 2, to come and clear yourself that there’s an investigation ongoing about the container. Nobody has a goal on ease of doing business, we are doing our business to outwit one another. The one you can settle, you do and the one you cannot, you run away. So that attempt by government is a failure. Do you know you can’t have any contract in the oil sector without an individual signature being necessary, pay for foreign holiday for wife and children? Now let me ask you, if your neighbour who works in oil sector, takes the wife and children for trip every year abroad, they are using the best car, but the man is working for the same government you are working for, won’t your children call you a lazy father? You are talking about ease of doing business when you must practically force people to use computer, what are they meant for?  Why do we have a computer system and then still have registers in about three or four tables, so they repeat the same thing?

 What’s your assessments of Emenike as the president of ANLCA? 

I feel it’s too early because first, that five years of distortion we had, which was barely unnecessary in the first place will have an impact on his reign. The Emenike now, duly elected cannot be the Emenike that was my vice. As he is now, there is no official relationship between me and him because a former president does not have any role to play in our association except you are invited as a guest to one function or the other. So therefore I should not be seen monitoring or tailoring him. If he ask me for advice, yes, I give. Even when Tony was there I do give him advice. What I am trying to say is that it is the health of the association that matters. Now the experience after five years of trouble in the association which is unprecedented is the reason he is being careful in taking steps, one at a time. You know he is comical in nature and the way he responds to serious question will just make you laugh away your sorrow. So, I think we give him time to prove himself. There’s no provision in our constitution that a sitting president can be removed, while some other officials can be removed, there’s no clause on how to remove a sitting president, even an impeachment clause is not there. That’s why he is the chief executive officer, if he is not performing what can be done is to pressurize him to perform. So the expectation of the people are very high because they have believe that the past executive were below par.