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CBN FOREX Policy Has Dwindled Our Revenue from Imports, Customs Boss Cries Out

Written by Maritime First
  • As $40m inflows push foreign reserves to $27.9b

The Comptroller-General, Nigeria Customs Service (NCS), Retired Col. Hameed Ali Tuesday cried out over the effect of the foreign exchange policies of the Central Bank of Nigeria (CBN) on imports, saying the revenue generation of the Service has been badly hit as a result.
Noting that the Service has continued to suffer revenue shortfall since the last quarter of 2015 with N230billion, Ali called on the apex bank to do something to save the situation.

Ali who spoke during a Consultative Forum between Customs and the Manufacturers Association of Nigeria (MAN) at the Customs Training School, Ikeja, Lagos, pleaded for sympathetic consideration by the CBN to review the policies, the News Agency of Nigeria (NAN) reports.
“Customs had also made progress in getting the necessary approval for clearance of a huge backlog of imports.

“Imports in respect of which forms `M’ were opened before the commencement of the CBN foreign exchange restriction of some imported items.
“Importers of such goods could not finalise Customs clearance due to inability to obtain the Pre-Arrival Assessment Report (PAAR).

“Relief has come for such importers as we (Customs) have secured the go- ahead to waive the formalities and allow them to pay duty,’’ NAN quoted Ali as saying.
The comptroller-general said that the service had re-organised the Dispute Resolution Units and designated experienced comptrollers to head the units for quick resolution of disputes.

He said that all disputes arising from valuation and classification were now referred to the units for resolution.
Ali said that the service had been receiving complaints about rates of duty and documentation processes which differed from one port to the other.

He said that there was also the issue of different rates among terminals in the same port.
The comptroller-general said emphasis would be on professionalisation of Customs’ jobs, saying that the vision of the management was to build a pool of highly-skilled specialists.
He said specialisation would be in core areas like Valuation, Classification, Rules of Origin, Excise, Enforcement, Customs IT and Investigation.

Ali said that the activities of MAN could not be over-emphasised, adding that collaboration with the Organised Private Sector (OPS) like MAN would be an important pillar of Customs administration.
“We will therefore appreciate your feedback on our performances and government policies.

“We (Customs) encourage MAN to express its concerns about policy formulation and implementation.
“We assure you that under my watch, such contributions will form valuable inputs to our periodic reviews aimed at fine-tuning such policies for better result.
“I started operations last year. I am aware of strategic importance of Zone “A’’ to customs’ overall operations.

“I will not remain the Comptroller-General of Abuja. I will be showing more presence in Lagos and the zones,’’ he said.
Ali urged manufacturers who were having challenges in clearing their consignments before he assumed office, to lodge their complaints genuinely so that customs would handle such complaints.
He also advised members of MAN to inform the service earlier on issues concerning documentation before arrival of their consignments for quick clearance.

Ali also urged manufacturers who sought refund of charges which had accumulated on their duties in the last few years to be rest assured that it would be looked into.
He said that the service had processed the refunds.

Ali, however, urged members of MAN to assist the service on intelligence information gathering to reduce smuggling of products and encourage genuine importers and exporters.

The President of MAN, Dr Udemba Jacobs, pledged to support the comptroller-general to enable him achieve the revenue target set for the service.

Jacobs said that MAN would support Customs on intelligence information gathering, adding that the information would assist the service to achieve success.

He urged the Customs chief to look into reviewing the 41 restricted items and to also address the challenge faced by manufacturers in obtaining Form `M’ and avoid paying demurrage.
“Customs should also look into compliance with rules on importation of goods and should stop any importer not complying with cargo clearance procedures.

Also speaking, the Executive Director, GONGONI Company Ltd., Mr Kingsley Onwukwe, urged customs to look into importation of goods coming into the country.

Onwukwe said that many goods meant to be exported were being imported, adding that this had affected exporters.
A member of MAN and Chairman, Midland Galvanising, Mr Olufunmilayo Sunday, said N95 million was over- charged on different imports made by his company between 2012 and 2013.

Sunday said that all efforts to get back the amount overcharged by the Customs service had proved abortive.
He urged the Customs management to assist him in getting a refund of the amount overcharged.

In the meantime, official foreign exchange reserves increased marginally by $40 million in March on a 30-day moving average basis to $27.9 billion, data from the Central Bank of Nigeria (CBN) have shown.

A report by FBN Quest, an investment and research firm, attributed the inflows to three possible causes: that forex sale by the CBN slowed, that it plugged some leakages or that it saw a modest rise in its inflows due to the oil price recovery of about $10/barrel in recent weeks.

The firm said reserves had stabilised over the past six weeks after $910 million decline in January.

Reserves at end-March, it said, provided 6.2 months’ cover for annual merchandise imports and 4.4 months when “we allow for services”. This would constitute adequate cover, were it not for the huge import demand of segments of the economy.

“Our enquiries suggest that the CBN has not slowed its sales of forex, which amount to about $200 million per week. We may have to review our estimates of demand, however, since the CBN last week returned about N400 billion to the banks in naira collateral attached to unmet forex bids,” it said.

FBN Quest explained that a sharp fall from previous weeks could prove a “one-off or could tell us that importers have reduced their orders through their banks because they have adopted a realistic take on forex supply at the CBN”. “At the same time, banks may feel they could better deploy funds currently lodged at the CBN for two days before and two days after the sales. We, therefore, attribute the improved outcome for reserves in March to the oil price recovery and, probably, some steps taken on leakages,” it said.

Gross external reserves stood at $28.33 billion at end-June 2015, compared with $34.24 billion at end-December 2014, representing a decrease of 17.3 per cent. The end-June 2015 level of reserves was equivalent to 5.8 months compared with 7.0 months of imports at end-December 2014. The fall in reserves was due to the sharp decline in foreign exchange inflow from $23.66 billion in the second half of 2014 to $15.28 billion at end-June 2015. The development reflected a decrease of US$8.38 billion or 35.4 per cent. Total foreign exchange outflow was $21.07 billion in the first half of 2015, compared with $26.33 billion in the second half of 2014, indicating a decrease of 20.0 per cent.

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