Wednesday, May 28, 2014

Customs Begins Implementation Of Auto Policy

Even as the Port and Terminal Multiservices Limited, PTML Command of the Nigeria Customs Service, NCS began the phased implementation of the automotive policy of government, as it concerns payment of duty, clearing agents at the command has hinted that PTML risk losing more than 40, 000 stakeholders operating at the terminal.

The agent told Sunday Pilot that the Customs had commenced the implementation of the policy against the July 2014 date earlier announced in the directive of the Finance Minister, Dr. Ngozi Okonjo-Iweala.

Chairman of PTML Chapter of NAGAFF; Chief Goodluck Onunji in his opinion said that there are over 40, 000 operators, importers and agents included operating at PTML terminal and its shipping company; Grimaldi Shipping, and that if the auto policy is implemented, the terminal and the customs will lose customers and revenue.

According to him, the auto policy is not totally bad, but it must be given more time. Already, he said that the value issued by the PTML customs on vehicles have increased and it is now difficult for agents to make gains on transactions.

“We have over 40, 000 stakeholders at PTML and Grimaldi, they will all go out if the policy remains, we are not saying the auto policy is not good, but it must be done step by step”

“We are appealing to the Minister of Finance to please revert to the old system, many of us are already running out of jobs, and yet, up till now we have not seen any made- in-Nigeria vehicle she promised” Onunji said.

The freight forwarders including ANLCA, NAGAFF and other associations at the chapter had on Monday complained to the PTML customs on realizing that they had commenced phased implementation of the policy on vehicles.

The freight forwarders matched to the office of the Customs Area Controller, Mr. Tajudeen Olanrewaju and officially withdrew their services until the policy is reversed.

It would also be recalled that the customs had in March 2014 began phased implementation of the policy at the Apapa port. Under the arrangement, importers are expected to pay 35% duty as against the 35% duty and 35% levy specified in the auto policy.

Also, a chieftain of the PTML chapter of the National Association of Government Approved Freight Forwarders, NAGAFF, Mr. Ugochukwu Nnadi pointed out that the phased implementation will not be allowed at the command.

According to him, agents are demanding the immediate withdrawal of the policy by the customs headquarters, else, the strike will continue.

“We went to the CAC and we have told him to inform Abuja, even though we know that he is just following orders, the policy cannot work here as they do in Apapa, here is a major vehicle port, the vehicle arm of Apapa port cannot be compared to us here, they are known mainly for general cargo”

“We will not go back to work until they reverse the policy and we have made this known to the Area Controller of PTML customs” Nnadi told our correspondent.

Our correspondent confirmed at the PTML yesterday that work is yet to resume at the terminal.

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Monday, May 19, 2014

Nigeria’s Commodity Market Defies Rational Economic Principles – Owofemi

The Managing Director of Multi-Trex Integrated Foods Plc, Mr. Dimeji Owofemi, who spoke with journalists recently, says by not creating the right environment for private enterprises, the government is giving incentive to laziness. AKINPELU DADA was there.

How would say government policies are affecting the commodity business?
Commodity business has an up and down price structure and the Nigerian market is one market that defies every principle in the book; that is, every economic principle. The economic principle of whatever goes up must come down does not apply in Nigeria. I would say government policies are a lot of the time responsible for that; the government is a lot of the time hypocritical and pretentious.
We all know what is not right, everybody talks about it but nobody wants to bell the cat. It is a country where I find it strange that people who ideally will be treated as heroes somewhere else are treated as zeroes here. You should be heroes but you are treated as zeroes.

For instance, the Nigerians that are in their private businesses, I am not talking about people who are government patronisers, and when I say government patronisers, Alhaji Aliko Dangote is not a government patroniser. Anybody who is close to him will know how hard he has worked and what he had done; he had taken advantage of government policies that favoured what he needed to do.

Take for instance, when the government wanted essential commodities, the government created the environment of essential commodities; he (Dangote) saw that opportunity, he took advantage of it. What are essential commodities? Rice, sugar, milk etc, and the Nigerian government killed those businesses by policies that do not recognise that farming anywhere in the world has to be subsidised by the government because it is food. Food security is core. It is the beginning of any upheaval. When people can’t feed themselves, at some point they will fight back.

And we are not saying dole out money to people. We are saying create the environment for people to want to engage in productive business. In this country today, if you want to lay tiles you will go to Cotonou to hire the people who will lay tiles well for you. The people riding commercial motorcycles (okada) are these artisans.

We create an environment that makes people not to work hard. It does not make sense. If I can ride okoda and earn N400 a day, why should I do tile work? So, the ecosystem exists in every industry or in every society. But there is no inducement for hard work.

In the cocoa industries, take the export of the raw commodities and the value addition and separate them; 70 or 80 per cent of the raw commodity is shipped out in the raw form. I don’t need to explain to you that it has consequences because there is a very clear example of it. Crude oil that we take out in the raw form, while killing the government-owned refineries. Why do you think it is different from other industries? What is the benefit of oil to us other than that it creates other problems of its own? It creates corruption as well.

So, if the government is giving incentive to laziness, why should anybody else work hard? About 20 per cent of the crop is value addition. The people that are involved in raw commodity export are mostly European companies who want to keep their factories running outside of this country, because in addition to them getting that incentive, there is double jeopardy for those who are adding value to the remaining 20 per cent, because those European countries also impose tax on anything that is not raw but that is value added; so, you give them double advantage. You give them 10 per cent or whatever percentage and we get charged about seven per cent for exporting the value added product; so, there is already a 17 per cent gap; when you now look at the people who are involved in the value addition, all of us are Nigerians.

So you support what the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, is insisting on concerning the Economic Partnership Agreement with the European Union?
It is not Aganga, it is Nigeria. And other African countries have started seeing the sense in what we are saying. The European Union minister was here with his delegation because he has been hearing us working against it. Why should we allow our borders to be opened again when we have a flipper of opportunity to add value? They can see that Nigeria and other West African countries are now generating revenue; they want to come and wait for that revenue.

But they will be setting up packaging industries, everything will be brought from outside of this country and they will come with their own citizens to come and run it. In the days when Nigerian Breweries and the rest of them started, there was none of them that did not have expatriates in large numbers.

Those they called directors or technologists were workshop officers in their countries. The person knows the limit of his power, he gets the same salary he will get when he is there, but we get charged the salary they want; so, it is a way of repatriating the so called investment.

There is a fear now that if we have a change in government that some these policies you are appraising may be reversed, what is your take on this as an industrialist?
We will not stop talking. It is no longer wise to leave it to the government alone. If we were not making noise, the policies will be reversed because some civil servants have been compromised, even as far as the manufacturers’ association, but special thanks should be given publicly to Chief Kola Jamodu, who stood his ground, and the reason is because he is coming from this area. He has run industries before, industries that belong to foreign bodies, and he knows what efforts to be put in for it to stand.

PZ Nigeria is still the highest income earner for the group all over the world. Guinness Nigeria is also the highest earner. Now, what they want is 100 per cent, because they have started coming back by acquiring majority stakes again. How did Cadbury get to where it is now? You need to ask more questions about the stories surrounding some of these things that happened. There is no country in the world that has more human resource than Nigeria and I am ready to prove it on any platform.

The year 1986 seemed to be a watershed in respect of the cocoa industry, with the dismantling of the cocoa board, the privatisation of government enterprises, deregulation and so on. Actually, what did the nation gain through the Structural Adjustment Programme?
We did not plan what would happen after the scrapping of the cocoa board. We believed the Brentwood people, that was why I was saying the Brentwood economy will not work in Nollywood, it is designed for Hollywood. The Hollywood environment is where the Brentwood economy can work. You need another category of modification to the Brentwood economy for Nollywood to operate.

What we got wrong is that the World Bank says we should go and scrap our cocoa board just like the EPA is forcing us now, attempting to force us with the promise that it will benefit us by just increasing taxes on the existing poor people. Scrap your commodity board, you are subsidising by using the commodity board, you are protecting them and shielding them, they said. The mother and father of free economy or capitalism is America. America is forever subsidising its farmers. They created the World Trade Organisation to protect themselves.

Then again with the GAT, they created so many things to protect themselves. When one fails, they will devise another one. What we got wrong is that we never planned for the future. And not planning is to plan to fail. If we scrap the commodity board, what will happen to the farmers? What are the structures sustained by this commodity board or cocoa board that will suffer if we scrap it? Do we have the alternative value structure to protect this value chain? That we got wrong. Nobody asked that question.

The Nigerian raw cocoa lost its export appeal on alleged policy assessment, what is the situation now?
Everybody who set up finance companies at that time set them up because of foreign exchange. And cocoa, up till today, is about 70 per cent of the foreign exchange earner in the non-oil sector; so, everybody rushed into cocoa; anybody could gather the bags. People saw the opportunity from the supply point of view because they were in hurry to make quick money; you know they were taking deposit at 15 per cent. The only way they can pay that return is to turn the naira into foreign exchange, then bring it back and turn it back into naira, that was the basis of forming the numerous finance companies at that time.