Maritime stakeholders kick as CBN FX policy fails to ease imports

Maritime stakeholders have frowned at the recent pronouncement by the Central Bank of Nigeria (CBN) to maintain its stance on restriction of access to the dollar of the 41 items classified as “Not valid for Foreign Exchange.”

Though the industry players see the entire move by the CBN as a welcome development, but still argue that its measure on imports will continue to hamper activities at the nation’s port industry. This is even as they await the implementation process of the FX interbank trading window, which they see as a determinant factor to the improvement of activities at the ports.

“The CBN pronouncement is not bad, but the problem is implementation. It is at the implementation stage that we will know the effect of the policy on the maritime sector,” Lucky Amiwero, national president, National Council of Managing Directors of Licensed Customs Agents, said.

Amiwero questions the sufficiency of FX to the demanding market, saying the apex bank should come up with a clear-cut fiscal policy, noting that there was no clear-cut fiscal policy by the CBN.

According to Amiwero, many people are confused about the direction of the CBN, and “the maritime sector has gone down completely. The sector has lost about 70-80 percent of its activities due to the CBN FX policy, restricting about 41 items from accessing FX for import.”

Since the FX regime came into force, activities at the ports have dwindled, leading to revenue loss to the country. In the last quarter of 2015, the Nigeria Customs Service (NCS) recorded N230 billion revenue shortfalls, which Hameed Ali, comptroller-general, attributed to the CBN policy.

Only recently, the NCS said its average monthly revenue had fallen to about N50 billion from an average N80 billion.

The stakeholders maintain that the continuous restriction of access to FX to importers would further compound the challenges in the industry.

Kunle Folarin, chairman, Nigerian Ports Consultative Council, said the CBN measure on imports would definitely affect the maritime sector because it was rather a stiff measure.

“Already, you can see the previous restrictive measure on FX and how it has affected the cargo traffic in Nigerian ports. And you can see how the ship traffic has been reduced. And that pronouncement would affect the employment situation at the ports. It will also create a bottleneck in the supply chain of goods and services in the country.”

Many industries are folding up because they cannot access FX, Folarin said, noting that terminal operators are finding it hard because they have to pay Nigerian Ports Authority (NPA) bill, which is dominated in dollar.

He maintained that any restrictive measure would affect the maritime sector and the port industry “as we have seen and it will have negative effects on the economy.”

Aminu Umar, president, Nigerian Ship owners Association, said, “for now, we are still waiting to see how the banks, which are the primary dealers, would be operating. The availability of the dollars in the market and the rate at which the banks would trade would determine the activities at the ports.”

Umar emphasised that until the banks come out with their modalities before the effect of the policy would be known, saying if importers were able to access dollars easily for their imports, it would increase shipping activities. But if importers do not have easier access to dollars, then maritime activities will still remain down.