23

Mar

MAKING 48-HOURS PORT CLEARANCE POSSIBLE 26102015

2015-10-26

MAKING 48-HOURS PORT CLEARANCE POSSIBLE
BY HENRY BOYO

The desire for an expedited and fluid process of clearing goods from our ports has been consistently canvassed by all administrations in our recent past. Admittedly, the situation is not near as chaotic as the 'ship jam' of the cement armada on Nigerian waters in the early 70s, but the promises of successive governments of a 48hr port clearance process is clearly yet to manifest, even after several reforms were designed to this end.

Although, the concession of port facilities, may remain controversial, but to be fair, this arrangement has brought some measure of sanity into the delivery process, even though there are still concerns about the alleged current high cost of services provided by the perceived 'lucky' Concessionaires. Furthermore, the erstwhile Pre-inspection regime which constituted an unnecessary drain on scarce foreign reserves has thankfully also been terminated, and the myriad paraphernalia of self seeking regulatory agencies at the ports has been reduced to the most critical five departments.

Nevertheless, the usual importer anxiety from the excessive delay associated with the erstwhile, port delivery protocol, was largely the result of poor co-ordination of the flow process and the arbitrary stacking of consignments, which expectedly later created huge problems for identification and extraction of those containers for examination and clearance. In the ensuing melee, it was not unusual for delivery to take up to 3 months for several consignments.

Expectedly, the protracted turnaround time for vessels, soon instigated inordinately high freight rates to Nigeria and therefore compounded the cost of all imports, including the cost of those raw materials required to feed Nigeria's energy challenged, low capacity utilization, industrial establishments; consequently, domestic production costs and made-in-Nigeria goods, became less competitive against lower cost exports of finished goods from all over the world.

Regrettably, the high cost of clearing goods at our sea borders translated to an economic bonanza for the seaports and economies of neighboring countries, where Port Management was relatively much more civil and allegedly transparent; ironically, the gains of these nations further compounded our woes by seriously challenging the integrity and the capacity of our security services, particularly the customs, in their efforts to arrest the huge potential revenue loss to government from the inward smuggling of goods shipped to foreign ports but, with Nigeria as market destination.

Fortunately, the adoption of the Common External Tariff (CET) for ECOWAS countries, has largely eliminated the attraction of lower tariffs as an incentive for importers' preference for neighboring ports; but, we are clearly still some distance from satisfactorily fast tracking our port delivery process, so that clearance of consignments can be completed between 48hrs and a week after discharge from the vessel as per standard practice in every successful port destination.

Nonetheless, we must give credit to the Customs Service's dogged efforts in driving a robust set of reforms to facilitate clearing at our ports in recent years.  For example, the successful domestication of pre-shipment inspections and the related foreign exchange savings are clearly dividends from government's empowerment of the customs service in recent years; additionally, several job opportunities also became available when the erstwhile expatriate inspectors abroad were replaced by Nigerians in Nigeria.

However, the PAAR or Pre-Arrival Assessment report is probably the latest arrowhead of the present drive, for best practice port clearance, since the introduction of the manually based 'M' or "Import Form" decades ago. The 'M' form continues to serve as the approved registration form required for all imports; its content includes related information on the identity and details of the importer and the bank through which payment for the order will be transacted. The supplier's identity and country of origin, their bankers and details relating to prices, quality, quantity and shipment instructions would also be stated on the 'M' form. 

The consolidated data captured from all import forms established nationwide would guide the Central Bank's management of the Nations total foreign exchange commitments, so that appropriate action could promptly be taken to restrain inflation and minimize incidents of forex shortfalls or over supplies which could destabilise  the Naira's exchange rate and trigger unpleasant economic consequences.
The new PAAR imports protocol also accommodates the 'M' form, but in a e-format, so that import applications can be completed online and simultaneously made available real time to all concerned parties. According to the Customs Service, the PAAR "was designed and developed by NCS officers in line with international best practice, essentially to enhance Trade facilitation, economic competitive revenue collection and border security".

Thus, the PAAR regime conducts documentary examination before the arrival of goods and provides "timely multi-dimensional risk analysis at every stage of the clearing processes; thus, the adoption of PAAR is therefore expected to facilitate release of goods for those not requiring examinations/inspections on arrival".

Under the PAAR protocol, the Customs Processing Centre (CPC) is the central command for goods clearance; the CPC would automatically flag up high risk commodities for special scrutiny, by diverting the clearing process to a designated red lane, so that a more diligent evaluation and scrutiny can be conducted before release is effected.
Conversely, the consignments of trusted traders or importers with long standing history of similar imports would be designated to the Green lane which would fast track the clearing of such consignments without any subjective intervention to stop the process. 

Indeed, this is as it should be and if everyone plays their role, it will definitely be possible to easily clear goods within 48 hours, particularly those goods which are consigned to the green clearance lane, after the required multi-dimensional screening by the Customs Processing Centre.

Unfortunately, there are indications that all is not well, and there are reasons to suggest that even though a carefully woven structure has been put in place, the old mindset of some operatives in the NCS still persists; such self serving operatives still arbitrarily intercept consignments already designated for the green lane without any valid reason. Such subjective disruptions lead to extended delays before the release of goods, and the importer will invariably find himself at the mercy of a valuation officer who is determined to impose his own judgment in place of the laid down protocol for unfettered passage for goods on the green lane.

Such unnecessary clearance delays have the downside, of oppressive demurrage payments for the importer as well as the disruption of the production programme of industrialists who require the imported items as raw material inputs for production. Ultimately, extended delays prior to customs' release could lead to production lines or total factory shut down and the possibility of temporary layoff of staff.

The implications of such human impediments to a progressive, well articulated clearing process are increasing cost of production, uncompetitive made in Nigeria goods, low capacity utilisation and gross inefficiency in the management of resources. Those unfortunate companies which are victims of the high-handedness of aberrant customs officers may ultimately have little or no profit to declare at the end of the year and would consequently pay much less tax than was possible to government. Sadly, the victim companies, the government treasury and the Nigerian economy at large become distressed and uncompetitive simply because of the possible greed of some clogs in the wheel of national progress.

The 48hr clearing target is certainly do-able and necessary to make Nigeria's economy more competitive, but the NCS leadership must demonstrate the will to make it a culture. It would be to their credit if the NCS publishes regular attested updates on progress on the increasing rate of consignments which were successfully cleared within 48 hours every month.

SAVE THE NAIRA, SAVE NIGERIANS!