November 18th 2015
His Excellency,
President Muhammadu Buhari,
President and Commander-in-Chief of the Armed Forces
Federal Republic of Nigeria
Aso Villa Abuja
Your Excellency,
RE: MANUFACTURERS ASSOCIATION OF NIGERIA-MAN DEMANDING THE JETTISONING OF THE RE-INTRODUCTION OF CARGO TRACKING NOTE (ICTN) OF THE FEDERAL GOVERNMENT OF NIGERIA: OUR DISAGREEMENT- MATTERS ARISING
YOUR Excellency, ordinarily the Importers Association of Nigeria (IMAN) would not have bothered to speak on the matter of unjustified demand by the Manufacturers Association of Nigeria-MAN (while parading self as an organized private sector group), for the jettisoning of the implementation of Cargo Tracking Note (CTN) that was recently reintroduced by the Federal Government in our foreign trade.
However, after reading a statement by MAN, subtly written to draw the attention of your esteemed office as published in the Vanguard Newspaper of 3rd November 2015, we saw it as a civic responsibility and an act of patriotism to advice you and other members of Federal Executive Council (FEC) accordingly on the issue. (Copy of the statement attached)
For the records, it is a fact that the issue of Cargo Tracking Note was reintroduced and approved by your good office, after due consultations with the Federal Ministry of Transport and other security agencies. We don’t want to waste your time dwelling on the concept of mandatory tracking of cargo which was introduced by the United Nations through the International Maritime Organization under International Ships and Ports Security (ISPS) Code as a response to the September 11 terrorist attack on the United States of America. However suffice it to say that the implementation of the ISPS Code requires that ships, persons, port facilities and cargo should be guarded and protected through a developed strategic security plan; and CTN is expected to provide relevant information that will help check maritime security threats caused by carriage of cargo through the sea, air and land borders.
Your Excellency, it is common knowledge that issues of security to life and properties of citizens and the state cannot be compromised by any responsible Government. The International Maritime Organization endorsed the fixing of tracking fees to Agencies or bodies implementing security measures as may be determined by implementing Nations of the ISPS Code, which shall be a mere administrative token already integrated into the payable ocean freight.
We must also state here that from our informed position that overtime, apart from the tracking fee, certain unreasonable charges such as war risk, terrorism and Boko Haram, congestion, Ebola, etc are listed in the components of ocean freight for Nigeria bound Cargo, which the Nigeria Shippers’ Council is aggressively pursuing to reverse.
Your Excellency, judging from the above sir, without prejudice, it is also a fact that except natural air, nothing is free in life, hence the implementation of international cargo tracking in Nigeria is expected to attract a token fee to be borne by the carrier, which basically is an administrative cost for cargo tracking processes. However, additional revenue generated from the scheme is expected to be used in beefing up security plans at the ports and other approved entry points.
It must be stated that the Nigerian international Trade peculiarities are not the same with that of Ghanaian international trade environment. The CTN Implementation in Ghana (just like it happened in Nigeria in 2012) was recently suspended by Ghana Shippers Council due to noticeable flaws in the originating contract agreement, especially in protecting Government revenue interest. Unlike the Nigerian Shippers Council that meticulously crafted an originating contract agreement protecting Government revenue interest and shippers interest, thereby adding value to our international trade supply chain.
In this respect, the Nigeria Shippers’ Council should be commended for its timely intervention towards the recovery of funds being raked in by carriers from unjustifiable charges.
Your Excellency, it appears that the kernel of the grouse of the Manufacturers' Association of Nigeria seems to be that with the introduction of the CTN into our maritime lexicon, the cost of doing business would go up. This is not so because CTN implementation has no economic cost in the first instance. Our informed standing has shown that cargo consolidators had since taken advantage of CTN implementation in other nations without our shippers knowing. It is important to note here that, the consolidators collude with the carriers to collect the said tracking fee (embedded in the ocean freight) from the shippers. It is therefore necessary that the Manufacturers Association of Nigeria (MAN) and their cargo consolidators should exhibit due diligence and compliance to ensure genuine declaration of their imports.
The assertion by the antagonists of the implementation of the CTN that the Bill of lading used by other agencies of the government and captures the relevant information to be supplied by the CTN is unfounded, because the Bill of lading is a mere receipt of contract of carriage which is private to the originator and others concerned. Governments of nations do not have control over bill of ladings and as such it cannot be used as a strategic security document.
We also wish to highlight the relevance or otherwise of Pre-Arrival Assessment Notice of the Customs under Destination Inspection regime together with Form M documentation therein, they are local documents limited for Nigerian use and does not add any value in warding off external aggression. This puts a big hole in the argument by a fractional President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) Mr. Lucky Amiwero in an open letter to President Muhammadu Buhari on the overriding function of the Pre Arrival Assessment Report (PAAR) above Cargo Tracking Note (CTN). (Copy of Mr. Lucky Amiwero’s letter to the President dated 16th November, 2015 attached). Customs operations are limited to the entry points of Nigeria and do not go beyond the border of Nigeria with another country. The cargo tracking device as contained in the Customs law is localized whereas CTN under a consultant as approved by the Government is global in operation. The Americas take war to their enemies instead of allowing them into territories and Nigeria should not be an exception.
Your Excellency, the ideal cargo tracking operations starts with the Shipper (Importer) who genuinely declares his import on the portal provided by the consultant for the CTN. Thereafter, at the point of consolidations, the representative of the consultant (the checker officer, whose integrity has been Profiled), witnesses and counts the stuffing of the cargo alongside the consolidator, into an approved means of carriage (container, truck, etc). Then he files his reports of Findings/Inspections into an Equipment Interchange Receipts (EIR), and then tags a temporary seal on the container. The container then proceeds to the Marshalling Segregation Area for a reconciliation by another checker officer.
Finally, the carrier cross-checks the information on the EIR and then issues a bill of lading, after which an electronic device/seals is tagged to the container for tracking purposes. Therefore, sincere documentation and proper cross-checking of documentations reports and observing stuffing activities are the essence of cargo tracking anywhere in the world; else, the integrity of the cargo can be compromised if tracking is only dependent on the sealing device.
Your Excellency, for once it is important that we draw your attention to the activities of this organized private sector in the Nigerian economy. There is no doubt that the relevance of the manufacturing sector cannot be over-emphasized in terms of employment opportunities, transfer of technology and generation of statistical data for trade policies and formulations.
But the fact remains that it is high time we scrutinized the roles and activities of this so called organized private group (MAN) in our economy. Experience has shown that this groups of persons has been taking undue advantage over the
greater numbers of practitioners in the informal sector.
Overtime, the informal sector has been neglected and our economy is the worst for it. At the moment, the GDP of Nigeria is more of the product of the informal sector standing at 70% than that of the formal sector which stands at 30%. We consider this an injustice to the greater number because the name informal sector is a direct attack and derogatory to the concerned. It is cheap blackmail perpetrated by a group of operators driven by selfish interest.
We recall the incentives to the majority of the Manufacturers in Bond Scheme and waivers granted to some bonafide manufacturers. The abuse was unprecedented as the records are available with the Customs. In the past, these various abuses led to the review and subsequent cancellation of the entire incentives by the Government in some cases. The truth of the matter is that Government should focus on the informal sector if we must attain the goal of greater economic development. Some members of the so-called formal sector group have since turned to ordinary traders since our power generation and distribution became epileptic. However, we commend the doggedness and commitment of the present administration to revamp the power sector.
Your Excellency, you may recall that former President Chief Olusegun Aremu Obasanjo in the last lap of his administration was about to profile the true relevance of the organized private sector’s input into our economy. He was disturbed at the rate at which prohibited goods were entering into Nigeria and the destruction of imported textile materials through burning. A committee was set up to find out our manufacturing capacity rather than paper triggering which necessitated the various bans on traded goods. It was discovered that these so called organized and respected groups (MAN), may have been deceiving government through bogus and unverifiable trade and manufacturing indices.
Your Excellency, it is unwise for us to continue in this manner to the detriment of the greater numbers of our traders. The Customs, and other regulatory agencies may not have been left out in the onslaught of MAN in the guise of manufacturing. We wish to state clearly that manufacturing may not attained viable capacity today in Nigeria because we have not fixed electricity supply. Ask any genuine investor in the manufacturing sector, he/she will tell you the simple but naked truth.
Your Excellency our finding is that most manufacturers are now at a point of survival of the fittest, using propaganda and cheap blackmail. A situation where the private sector groups cannot stop protesting over security matters and safety of goods and high cost of doing business is most regrettable. It is now time to tell you the truth in the interest of our foreign trade, rule of law and government revenue. There is no doubt that we are strategically positioned in our ports to give an insight into all these malfeasances.
If members of the M.A.N. are genuine and sincere, why have they not protested against 7% import surcharge levy, the progressive storage charges of the concessionaires, the transfer charges of containers to outer terminals and bonded warehouses, the sale of auction containers, the 70% auto levy and other illegal charges in our ports. The entire burden is on the informal sector groups investments. They will not complain or protest because their goods are moved from the port on fast track delivery in the name of the so-called raw material imports.
With the evolution of e-commerce in Customs operations, imports made by majority of the M.A.N. members are taken on green lane of the asycuda++. Physical examination of such imports are not allowed as long as it is routed on green lane. It is very simple for your Excellency to understand why they are protesting against CTN - it is because illegal documentation of their imported items will be exposed.
Your Excellency, let it be on record, that, we are tired of illegal businesses occasioned by concealment, false declaration and wrong description of cargo as being masterminded by some shippers. We must not be seen to encourage Shippers to cheat the government and the people of Nigeria any more. All shippers either as organized or unorganized must be prepared to pay correct import duties and taxes by making genuine declarations. CTN which has the ability to provide description of cargo, quantity, weight, origin and country of supply will greatly assist in higher revenue collection. Above all, it will ensure security of the state and safety of cargo at any given time.
At the moment, Importers Association of Nigeria, (IMAN), National Association of Government Approved Freight Forwarders (NAGAFF), members of the Association of Nigerian Licensed Custom Agents (ANCLA), National Council of Managing Directors of Licensed Custom Agents (NCMDLCA), Indigenous Shipping Associations, Council for the Regulation of Freight Forwarding of Nigeria (CRFFN), Nigeria Customs Services, Nigeria Port Authority (NPA) Nigeria Shippers’ Council (NSC), NIMASA, NACCIMA, etc may have nothing against CTN implementation in the interest of security and safety in the nation's maritime trade. We as members of Importers Association of Nigeria are directly affected by the consequences of untrue declaration of goods for Customs purposes as it is contained in Sections 46, 47, 161 of CEMA.
There is now a divide between the informal sector group and some of the formal sector group and MAN. The informal and some formal sector groups are in the greater number and MAN is a minority. Among others, CTN is in force in Europe, Asia, Americas and Africa including countries in the sub-region such as Benin, Cameroun, Togo, Angola, Cote d’Ivorie and Burkina Faso, as such it is not limited to Nigeria alone. It is also on record that in the past, the Federal Government may have been misled by this same group through the alleged falsification of trade data and statistics that led to the banning of certain trade goods like vegetable oil, jeans trousers and brief cases for instance, giving the government the assurance that they could produce enough for the country. At the end of the day they embarrassed the government to make policy reversals on some of these banned goods.
It is now imperative your Excellency that the government should begin to pay more attention to the informal sector by getting them organized for more effectiveness especially in trade policies formulation and implementation. We would want to place it on record that the total number of containers of goods imported into this country by the so-called organized private sector (M.A.N.), vis-a-vis the informal sector as at today stands in a ratio of 70:30, the informal sector brings in 70% of the total imports into the country while the formal sector’s importation is a distant 30%. In cognizance of the importance of the informal sector, the past governments have made spirited efforts to dialogue with them so as to see how best they could be organized and articulated for effectiveness in driving the economy.
It is pertinent to note, your Excellency, that all over the world especially the less- developed economies, the informal sector is the sector that drives the economy. Nigeria cannot be different especially now that we are seriously talking of robust economic advancement. It is the informal sector that adequately drives this economy to achieve great heights. We therefore implore the government to make every effort to nurture this group that has the financial means to drive the economy rather than those who have inflicted so much financial injury on our banks and depositors' money.
We want the government to remain focused and not lose sleep because of what the Manufacturers Association of Nigeria (MAN) has put forward in their publication. When the chips are down this group does not have what it takes in terms of capacity to hinder the smooth operations of our ports. Critical stakeholders have thrown their weight behind this noble and good policy of government.
It is our candid advise that the Manufacturers Association of Nigeria (MAN) should embrace the principle of genuine cargo declaration and encourage their cargo consolidators to comply with the CTN guidelines. CTN does not attract cost in its implementation. On the part of the government, we sincerely advise that issues of energy should be further accelerated with vigor, so that investors, manufacturers and other concerned stakeholders will not hide under epileptic power supply to blackmail or intimidate anybody. The world is about free market enterprises and operations. Your Excellency, for God’s sake, may we know what Manufacturer Association of Nigeria (MAN) has been able to do in helping these agencies of the government to achieve set objectives? We shall begin to take them serious only when we see them contribute to the welfare and logistics needs of agencies of the government rather than what they will get at all times.
To show the insincerity in the statement of MAN, in the Vanguard Newspaper under reference, we may want to draw your Excellency’s attention to a paid advert on page 46 of the Punch Newspaper of 2ndMarch 2010, a honest Nigeria, then, the National Vice President of NACCIMA, Alhaji Sulaiman Hameen-: which stated inter alia; “A lot of people will go abroad, they will shop for raw materials or spare parts and they will collude with their suppliers to put other things in the container; things that are not declared, things that are even expensive than the so called manufacturers. When a cargo arrive in Nigeria, they will use what we call fast track system to fast track the cargo into their warehouses in their factories… without paying duty to government on the extra in the container. With the Cargo Tracking Note (CTN), that will be virtually removed”.
One would begin to wonder where the Manufacturers Association of Nigeria really belongs. The Importers Association of Nigeria and a host of the informal sector groups are worried over their trade set back’s occasioned by the deceit and pampering of this so-called organized private sector. Government needs to address this and create a level playing field for all the bonafide stakeholders. The informal sector groups create over 60% of employment opportunities in Nigeria and yet government seems not to appreciate this because of the falsehood of this so called organized private group. For the last time, we want to state categorically, that CARGO TRACKING NOTE IS GOOD FOR NIGERIA IN TERMS OF SAFETY OF CARGO AND SECURITY OF THE NIGERIA STATE. ITS IMPLEMENTATION HAS NO ADDITIONAL ECONOMIC COST TO THE SHIPPERS AND END-USERS. IT WILL HELP GOVERNMENT TO COLLECT APPROPRIATE CUSTOMS DUTY FOR DEVELOPMENT PROJECTS. THE POLICY OF CARGO TRACKING NOTE IMPLEMENTATION SHOULD BE ALLOWED AND SUSTAINED.
This document is prepared by IMAN and NHTUA together with the greater numbers of the organized body of freight forwarders, licensed customs agents and Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), who are our agents/regulator in the Customs ports and approved border stations. They include; NAGAFF, NCMDLCA, NAFFAC, AREFFN and CRFFN. We encourage you to disregard the rantings of the paid agents of the formal sector groups and all those who may not want to buy into the mantra of change in Nigeria as time shall tell.
CHIEF DR. OSITA OKEREKE
National President
Importers Association of Nigeria (IMAN)
CC: The Vice President Federal Republic of Nigeria
The Senate President
The Speaker, House of Representatives
The Secretary to the Government of the Federation
The Honourable Minister of Finance
The Honourable Minister of Transport
The Comptroller General of Customs
The Inspector General of Police
The Executive Secretary Nigerian Shippers’ Council
The Managing Director Nigerian Ports Authority
The Director General NIMASA
The Director General SON
The Registrar CRFFN
The Director General MAN
The National President NAGAFF
The National President ANLCA
The National President NCMDLCA
The National President NAFFAC
The National President AREFFN
The National Coordinator MAAG
The National President Customs Brokers Association of Nigeria
The National President Igbo Maritime Association of Nigeria
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