April 10th, 2006 MEDIA REPORT #2

The fiscal policies of the government in which importation of hundreds of trade goods was banned this year have begun to take their toll on the revenue generation of the Nigeria Customs Service. But indications are that the Service may not meet its overall target of ₦220 billion for this year going by the poor revenue recorded so far from some of the commands. At Apapa and Tin Can Island ports, which remain the backbone of the Customs in revenue generation, the target is far from being met. For instance, Apapa Customs Command which import duty target for this year is ₦66 billion has so far recorded the sum of ₦23 billion as at May this year. Similarly, the Tin Can Island port with revenue target of ₦52 billion has been able to realize ₦15.5 billion.

Customs sources attribute the poor performance in revenue generation to the ban on so many trade goods. The total revenue from import duty of the two Lagos ports is not up to the target of one of the ports. Freight forwarders had lamented that the ban announced few months ago on importation of some items in addition to what was announced last year was not a problem to international traders, Nigerians who make use of such goods alone, but also to the Customs in terms of inability to meet revenue target.

Former Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA), Apapa chapter Chief Dom Obi described the ban placed on some items as capable of strangulating the people and throwing many into the labour market. “Government, – Obi said,- is trying to strangulate the masses, making the poor to be poorer and throwing many people into the labour market all in the name of economic reform. All this will yield fruit only when people have died.” Obi expressed concern that many items were now in the prohibition list, adding, “When you formulate certain policies not people oriented, some people may be forced to circumvent the law. …Imagine certain brand of pharmaceuticals being banned. That people are able to buy Paracetal is because there is much in circulation. Immediately, this ban is in effects, you will see that process of these drugs will go up, because the pharmaceutical cartel will fix the process at their leisure”, he said. He continued, “Competition, they say brings about quality and price reduction. If you leave the producers or businesses of pharmaceutical in the hands of some people, people will find it difficult to buy drugs.”

Obi gave an example of the importation of Tokunbo vehicles, which, according to him, has made it possible for many Nigerians to own their own vehicles, adding this wouldn’t have been possible if there was a ban on such goods. He noted that before there was demarcation on the ban on importation of shoes, but said that now it has become total ban on both men/ ladies shoes.

Even as we encourage local manufacturers, we must encourage competition. What government should have done is to increase duty rate on these imports. 

Story By Francis Ugwoke 

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