Editorials

Container Deposit as tool for extortion by shipping companies.

Shipping is a big business. So the shipping companies are in this business to make profit, just like all the players in the sector.

Therefore, container deposit, which is one out of the numerous charges made by shipping companies, is an avenue to make profit.

All over the world, container deposit is not a strange phenomenon. It is a refundable amount charged by a shipping company payable by a shipper for the use of the item but which acts as a guarantee against damage, theft or detention.

This charge is often imposed because containers are valuable properties cherished by shipping companies.

A standard 20″ container can cost above USD3000 while a standard 40″ may cost more than USD4000.

So shipping companies guard this prized possession jealously.

However, how this concept of container deposit applies varies from country to country, depending on the advancement of their economies.

In most of the developed economies of the world, container deposits are not required by shipping companies mainly due to the high level of professionalism and industrial competency within all players in the supply chain, i.e consignors, freight forwarders, haulers, warehousing operators, ship liners etc. as well as proper legal environment which ensures a secured transport environment among stakeholders.

In other words, there is high degree of trust and certainty among the shipping companies that the consignees in the advanced countries shall return the containers on time and in good condition without fear of theft or detention.

In another clime,what is required is letter of indemnity, collective guarantee or insurance which replace the requirement of

container deposits.

However , the case is different with consignees in the developing countries where there are high risk of containers theft, damage, delay or detention.

So, shipping companies do demand container deposits in the developing countries such as Nigeria to indemnify their properties.

So it is not out of place or illegal as some people may want us to believe for shipping companies to collect container deposits.

What we and other stakeholders frown at is the tool of extortion to which this otherwise legitimate concept has been turned by the shipping companies in Nigeria.

The shipping companies in Nigeria, unlike their counterparts in other countries, have converted this concept into an instrument of oppression and economic subjugation of the hapless shippers, taking undue advantage of the system collapse and gross maladministration in the country.

Countries where container deposits are charged, refunds are made within a period of one to three weeks when the containers are returned.

Even at other countries, container deposits are not charged on exports.

But in Nigeria, not only such refunds are not made or if they are ever made, they are mutilated while shippers are often surcharged for other sundry infractions.

The amount deposited for containers depends on the size of container and the place of delivery.

Container deposit for 40 feet container within Lagos is NGN200,000.00.
Container deposit for 40 feet container outside Lagos is NGN400,000.00.

Automatic demurrage for a 40 feet container is NGN100,000.00.

Container deposit for 20 feet container within Lagos is NGN100,000.00.

Also, Container deposit for 20 feet container outside Lagos is NGN200,000.00.

In other words, the consignee loses these deposits or half of them for various infractions such as late return of containers, damage to the containers while surcharge will be imposed on theft of containers.

However, the issue of container deposits in Nigeria is a complex one which does not lend itself to easy solution.

We concede the right to collect these deposits to the shipping companies as being done in some others developing countries as Nigeria.

Even though, critics of this concept may disagree with us but it must be acknowledged that shipping companies, just like other players in the sector, are in business to make profit.

But the area of friction is the failure of the shipping companies to made refunds of the deposits or mutilate them.

Are they justified in their decision not to made refunds or multi-late the deposits?

If the consignee falls foul of any of the terms of agreement such as damages to the containers, late return or outright theft of containers, are the shipping companies not justified in their refusal to made refunds or mutilate the deposits?

The answer may seems obvious but very complex within the context of Nigeria’s peculiar situation.

Why do Nigerian Shippers often fall foul of the rules of engagement?

Was it done deliberately or made inadvertently?

The answers to these posers will expose the complexity of the situation.

Due to the break down of the port access roads, the port environment has been gripped by intractable traffic gridlock which has made evacuation and movement of cargo as well as empty containers in and out of the port slow and cumbersome.

Often times, trucks laden with empty containers meant to be returned to the port are caught up in traffic for more than one week, thereby resulting to delay in return.

In another breath, the shipping companies have continued to defile the directive on having their holding bays to wharehouse the empties.

The hapless shippers are therefore caught in the web of complex situation of government failure that results to infrastructural collapse that engenders traffic gridlock and lack of capacity to enforce the rule of engagement on the recalcitrant shipping companies.

This is the situation which the shipping companies have maliciously exploited to milk the hapless shippers.

We frowns at this unconsciencenable conduct of the shipping companies.

We also blame government lackadaisical attitude towards whipping the arrogant shipping companies to line.

We must however quickly recognise the efforts of the Shippers’Council which has severally confronted the exploitative conduct of the shipping companies.

We are particularly comforted by the move of the Council to prevail on the shipping companies to abolish the concept of container deposits.

In as much as the idea sounds noble, we dare say it would be an uphill task to achieve the objective.

Firstly and as we have earlier mentioned, the shipping companies are in business to make profit.

Asking them to abolish one of the means to achieving this will be like asking a hungry lion to spare a fat goat trapped in its den.

To us, the only feasible alternative for the Shippers’Council to resolve this logjam is to ask for a reprieve for shippers until government does the needful that will ensure that shippers return the containers on time.

As long as the embarrassing traffic gridlock remains unresolved, shippers would continue to lose their deposits due to late return.

As long as government does not put its foot down hard in an uncompromising enforcement of procurement of holding bays by the shipping companies, shippers and importers will continue to lose their deposits or have them multilated .

We feel it is preposterous to wish away containers deposits, if we must be sincere with ourselves.

Unlike their counterparts in the advanced countries with high degree of trust, Nigerian importers often display loose morals.

One can not rule out deliberate act of mischief in terms of theft of containers, damage or outright abandonment of containers on the road sides.

Whoever transverses the country will see scores of containers abandoned along the roads while some are damaged due to poor handling.

We are glad that the Shippers’Council acknowledged this fact when its Executive Secretary, Barrister Hassan Bello said the freight forwarding practice needs to be structured before the advocacy on container deposits could succeed.

He even said shipping companies often complain of outright theft and detention of their containers as 300 of such containers were retrieved from a state government recently.

To us, this lend credence to the almost impossible task the Shippers’Council embarks upon to abolish container deposits.

The relief which the council could seek on behalf of the hapless shippers and importers is to streamline conditions governing return of empty containers, taking into cognizance the decayed road infrastructure which makes early return of the containers impossible.

Nobody can actually predict correctly the number of days importer could return the empty containers after evacuation, given the state of our roads.

The shipping companies know this and that is what they exploit to their advantage.

Since the concept is legal and governed by international standard, the Shippers’Council can only appeal to the emotions of the shipping companies, if they have any, to give mutually agreed concession to shippers and importers on the issue of container deposits until sanity is restored to our roads.

Better still, the Council can act as a guarantor, as done in a sane society,to credible and established shippers to enable the shipping companies to waive the deposits.

We know this option will be too expensive and unattractive for the council to take.

Resorting to blackmail or coercion will not work.

However, the only form of coercion which we think the government could exert on the shipping companies over this issue is to made the procurement of holding bays as a condition for imposing container deposits.

And that is if both the Nigerian Ports Authority (NPA) and the Shippers’Council have the prerequisite political muscle to confront the shipping companies on this issue.

Until these measures are taken, there is little Shippers’Council, as noble as its intentions are,could do to stop the shipping companies from using container deposits as veritable tool for mindless extortion .

We think this is an avoidable extortion made possible by government failure

Customs

Now that Tinubu has confirmed Adeniyi as CGC

Wale Adeniyi, CGC

The Eyewitness Editorial

On October 20th, 2023, President Bola Ahmed Tinubu, through the office of the Secretary to the Government of Federation (SGF), announced the confirmation of the appointment of Wale Adeniyi as the substantive Comptroller General of Customs.

The confirmation of Adeniyi generated as much excitement and widespread endorsement of the people as when he was appointed the Acting CGC on June 26th, 2023.

The confirmation of Adeniyi as the Customs boss four months after he was tapped on the shoulder by Tinubu to lead the Customs came to no one as a surprise, given his blistering performance as the Acting CGC.

Within the four months he spent in an acting capacity before his eventual confirmation, Adeniyi had changed the face of customs operations and administration.

His commitment, passion, and zeal for a new Nigeria Customs service resonated throughout the country and beyond.

His innovative leadership and reformative policies have set the service on the path of irredeemable growth and development.

No wonder President Tinubu didn’t delay the confirmation of his appointment.

If he could do so much in an acting capacity within such a short time of four months, what he can do within his first tenure of four years as the CGC is better left to be imagined.

However, the confirmation of the appointment of Adeniyi as the CGC has only placed more burden of responsibility and leadership on the Modakeke-born customs boss.

This is because to whom much is given, much is expected.

This is the time Adeniyi has to scale up his game much higher than he performed while he was in an acting capacity.

His leadership as the acting Customs boss received accolades from appreciative industry stakeholders who see him as a change agent.

As a substantive CGC, he can’t afford to do less.

As a full-fledged Customs helmsman, Adeniyi would come across many challenges but given his track record, those challenges should be his stepping stones to achieving more success.

Now that he has been confirmed, his critics would wish to see if his performance index would drop so they could giggle that the sparkling performance he posted as the acting CGG which eventually earned him substantive CGG, was a fluke.

Therefore, he can’t afford to rest on his oars as he carries the hope and aspirations of the teaming customs officers who are yearning and already basking in the euphoria of the refreshing change he has so far brought into the service.

Adeniyi can’t afford to fail as he carries the huge expectations of industry operators who have started to heave a sigh of relief on his appointment.

Adeniyi can’t afford to fail as he carries the confidence that the Federal government reposed in him to change the past ugly narratives of the service.

So it is no mean task ahead of the new CGC as he has the onerous responsibility to make customs operations seamless and customs administration top-notch.

There is no gainsaying that Adeniyi knows the task ahead and we believe he is well equipped to confront the challenges and surmount them.

We believe that his passion, commitment, managerial dexterity, and deep knowledge of customs operations coupled with the huge goodwill of the industry stakeholders will propel him to take the service to the greater height we all crave for.

History beacons on Wale Adeniyi as he takes on this difficult but eventful journey of rebuilding the Nigeria Customs Service into a world-class government agency.

He should know all eyes are on him.

Now that he has secured the full mandate of Mr. President, Adeniyi has the golden opportunity to write his name in gold and etch his achievements in indelible ink on the memory of people as one of the greatest and most admired Comptroller General of Nigeria Customs Service.

Instructively, his task is made a lot easier as President Tinubu has also secured a final judicial victory that has eventually secured his presidency and Adeniyi’s headship of the Customs.

Customs

Editorial! The incursion of Chinese into Nigeria’s revenue vault.

Chinese company, Huawei Technologies

The ubiquitous Chinese is gradually getting a foothold in the nation’s economy.

Apart, from giving a huge financial lifeline in form of loans to Nigeria, the Chinese are the ones building the country’s railways, among several other critical infrastructural projects they are involved in across the country.

The latest catch of the Asian country is the Nigeria Customs Service, the cash cow of the Federal Government.

On May 30th, 2022, the controversial concession of the Nigeria Customs Service was consummated at the national headquarters of the service in Abuja.

Despite the outcry of stakeholders against the concession of the operations of the Nigeria Customs Service, the Federal Government signed a tripartite concession agreement with a Chinese company, Huawei Technologies, and their Nigerian counterparts, Trade Modernisation Project Limited with Africa Finance Corporation as the lead financiers.

The agreement was facilitated and midwifed by the Infrastructure Concession Regulatory Commission(ICRC).

The concessionaires, under the agreement, will drive the modernisation project for 20 years.

The concessionaires are expected to invest the sum of $3.2 billion dollars with an estimated income of $176 billion generated for the Federal Government in 20 years.

Last Monday’s consummation of the concession agreement was preceded by the approval granted by the Federal Government in September 2020 to concede the operations of the customs to concessionaires

The concession agreement, which spans a period of 20 years, will involve the modernisation of the processes and procedures of the Nigeria Customs Service, including its revenue generation which the concessionaires will take over through which they are to recoup their $3.2 billion investments.

Expectedly, the decision of the Federal government, which was clinically executed in the mould of a coup d’é tat, caught many industry stakeholders pants down.

It also generated animated discussion as the approval and eventual concession was granted in defiance to the popular wish of the operators.

Since 2019, when the industry got wind of this concession deal before the 2020 approval, there has been concerted opposition mounted by the aghast operators who felt the move was an attempt to give away our common patrimony to the foreign interests.

Then, Hon. Jerry Alagbaso, a former Customs chief and erstwhile member of the House of Representatives, rallied the National Assembly against the move.

But to the chagrin of everyone, the Federal government pulled a fast one on all the antagonists of the project.

We are less disconcerted over this concession deal which we believe was willing away the nation’s cash cow for 20 years to the foreign imperialists and their local collaborators.

We are at a loss on which powerful forces could have forced the hands of the Federal government to enter into this type of deal against the popular counsel of knowledgeable stakeholders.

Modernisation of Customs, they said.

What is there to modernise in the processes and procedures of the Nigeria Customs Service?

At the risk of being controverted, we dare say the Nigeria Customs has the most advanced form of automation process among the government agencies in the industry and one of the most automated in Africa.

The Secretary-General of the African Continental Free Trade Area (AfCFTA), Wamkele Mene said as much when he visited Apapa Customs command last week.

Mr. Mene said Nigeria Customs has the most advanced and comprehensive automation programme among its peers in Africa.

The only challenge which the service has is human.

Some of the men and officers of the service are clearly aversed to full automation due to their selfish and pecuniary interests.

The automation process will eliminate human contacts which is the avenue for extortion and exploitation.

Since 2003, Nigeria Customs has gone through a series of automation processes that have made its processes and procedures seamless.

The Automated System for Customs Data (ASYCUDA) and its advanced form of ASYCUDA+, ASYCUDA++, the Nigeria Customs Integrated System (NCIS1 &11), and Pre-Arrival Assessment Report (PAAR) are some of the automation platforms created by the customs management over the years to make customs operations seamless.

Even, in 2013, the Service developed a web-based application to provide information and guidelines for international trade business processors, export and transit trade which is called Nigeria trade Portal which is interactive.

To our mind, what the service needs is to upgrade these automated platforms, and integrate them with other players in the cargo documentation and clearance chains under the neglected single window project.

With adequate capital outlay, we believe Nigeria Customs can achieve full automation status without the involvement of foreign economic imperialists, aided and abetted by their avaricious local collaborators.

The anti- automation officers, who are averred to technology due to their selfish interests, could be reformed.

If they are adamant, they could be shipped out.

Cargo scanning could be emphasised while physical examination of cargoes could be sparingly used.

With these and all other automation platforms well integrated into the single-window under the supervision of a willing Customs administration, the Nigeria Customs will be a world-class agency.

We are however least surprised at the tenacity of these economic vultures in their quest to lay hands on the Nigeria Customs Service, which is gradually emerging as the cash cow of the nation.

Apart from oil, maritime is the second-highest revenue earner for the country and Nigeria Customs plays a key role in this regard.

With the yearly earnings in the excess of a conservative estimate of trillions of naira and the capacity to do more, as well as the dwindling earnings from oil due to the global crisis in the oil market, the maritime industry nay Nigeria Customs is understandably the preferred bride for these economic speculators.

Various attempts have been made in the past to dip their hands in the Customs’ till without success.

The proposed invitation of Crown agents of London to take over the revenue generation of the customs as was muted by the then Minister of Finance but now the Director-General of World Trade Organization (WTO), Dr Ngozi Okonjo Iweala, under Olusegun Obasanjo’s administration, was promptly shot down.

In 2011, the illegal concession of Customs key functions between the ministry of finance and a company called Single Window System and Technologies was shot down.

In 2017, another move for Customs modernisation was made by the technical committee on the Comprehensive Import Supervision Scheme(CISS) which was pretentiously acting on behalf of the Federal government, with a technical partner called Adani system Nigeria limited.

The attempt, which sought to concession the Customs then for 25 years, was frustrated.

However, in a blatant disregard for popular opinion, the Federal government, after several failed attempts, eventually forced down the throat of the unwilling stakeholders, the concession of the agency.

However, the deeds have been done.

Any further lamentation by the stakeholders on the issue is crying over spilled milk.

Now that the government has had its way, we can only hope that its aspirations for the concession will be realised.

The Minister of Finance, Budget, and Planning, Zainab Ahmed, has said the government stands to realise $176 billion from the project without spending a Kobo.

The question is how much will the concessionaires realise within the 20- year period of the deal beyond the $3.2billion investments they are expected to sink into the project?

What would be the fate of the customs officers whose jobs will be affected by the take-over of the revenue functions of the agency?
Even though the Comptroller General of the service, Col. Hameed Ali, has allayed the fear of job loss, the redundancy of some categories of officers could not be totally ruled out.

It is instructive to note that one of the two core functions of the customs, which is revenue generation, has now been concessioned under the guise of this new modernisation project, leaving them with the anti-smuggling function.

We hope rather than render some crop of officers reductant which may lead to possible right-sizing of staff, they could be redeployed to beef up the anti-smuggling function of the service.

We are worried about the involvement of the Chinese in the project as represented by Huawei which serves as a technical partner.

The ubiquitous Chinese have gradually become a leech on Nigeria, sucking on the economy of the nation.

We can only hope that the modernisation project will leave the Nigeria Customs service better than it met it.

We equally hope the project will not be sabotaged by disgruntled insiders whose means of livelihood is being threatened.

The misadventure of the Professional Import Duty Administrators (PIDA) between 1996 and 2000 in the Nigeria Customs Service is still poignant in the memory of those who were in the know.

At that period, a firm of an accounting/consultant was engaged as professional Import Duty Administrators to complement the Nigeria Customs Service in the task of revenue generation.

They left the service worst off than they met it.

We appeal to the Federal government to ensure that this project transforms the service into a technologically-driven agency whose operations are seamless and paperless.

Editorials

Editorial! Chairmanship of CRFFN: Mortgaging the Freight Forwarding industry

Alhaji Tsanni Abubakar, Chairman CRFFN

For the second consecutive terms(2018 and 2022), a non-professional has emerged as the chairman of the Council of Regulation of Freight Forwarding Practice in Nigeria (CRFFN), sitting atop the regulatory body that is statutorily charged with directing and deciding the fate of the teeming freight forwarders in the country.

To put it more succinctly, Alhaji Tsanni Abubakar, a retired army Colonel who is not a practising freight forwarder, has for two terms, emerged as the number one regulator of an industry he knows little or nothing about.

Ironically, there are 15 hard-core professional freight forwarders, elected by their constituents in the industry to represent and take care of their interests on the Board and who are also on the same board as Alhaji Tsanni Abubakar.

We could not comprehend this act of absurdity and oddity where a retired soldier will be allowed to be the chief regulator of a freight forwarding industry.

The same oddity and absurdity playing out in the Nigeria Customs Service where another retired army Colonel is the Comptroller General.

While we may excuse the career customs officers for allowing this oddity due to the fact that the retired soldier was appointed and foisted on them, giving them no option but to obey as a paramilitary agency, the same thing cannot be said of the CRFFN where there is an option of voting.

We are puzzled why the 15 full-fledged professionals on the board of CRFFN would keep mute while a non-professional was made the industry’s chief regulator.

What makes it more confusing is that the same Act which the present board of CRFFN is operating and used to produce a retired soldier to govern the industry was the same Act that produced the first two chairmen of the board who are practising freight forwarders.

The first governing board was chaired by Tony Iju Nwabunike, the present National President of the Association of Nigerian Licensed Customs Agents (ANLCA) while the second governing board was equally chaired by another crack professional freight forwarder, Alhaji Akeem Olanrewaju who was ironically the Vice-Chairman to Nwabunike in the first governing board in 2008.

Those first two boards have the same membership composition as the present board: 17 government-appointed members and 15 elected freight forwarders as members, making 32- member governing board.

What then has gone wrong?

If the first two boards could produce freight forwarders as their chairmen and deputy despite being in the minority (15 as against 17), why should the freight forwarders in the third and fourth governing boards become so docile and timid as to concede this vital position to an outsider, a retired soldier?

Informed commentators have hazarded a guess.

They said that the elected freight forwarders in the third and fourth governing council were too frightened to stand up against the barefaced impunity of the now – resigned Minister of Transportation, Rotimi Amaechi, who brow-beat them into silence while carrying out this absurdity.

Another set of commentators claimed, though not verified, that the frightened freight forwarders may have been compromised to accept this oddity.

Events that played out in 2018 and 2022 when the principal officers of the council were elected or selected lent credence to these insinuations.

At the 2018 inauguration of the board by Ameachi, he practically imposed Alhaji Tsanni Abubakar as the Chairman as he didn’t allow an election to take place to the chagrin of the elected freight forwarders.

He brushed aside a muffled protest put up by Increase Uche, who was then the National President of NAGAFF and a member of the third governming board.

He bullied and browbeaten them to silence when he said he already knew the chairman while giving them the opportunity to produce the Vice-Chairman.

That was the only position put to vote that produced Chief Henry Njoku as the Vice-Chairman in 2018.

The same scenario played out in the 2022 inauguration or meeting? of the 32- member governing body with Amaechi in Abuja recently.

Prior to that date, Ameachi was said to have told those who were elected that he has gotten his chairman.

So when he met them, he used the same gimmick which returned Alhaji Tsanni Abubakar as the chairman without a voting process.

He was said to have sauntered into the meeting and glared at them before he asked them if they wanted the status quo to remain as he has just only one minute to spend with them.

Obviously, he didn’t want to brood any protest or entertain any long process of voting so they all chorused in affirmation.

Which electoral process could be conducted and concluded within a minute, anyway.

So it was another imposition.

But we are perplexed when some members of the elected freight forwarders, who are supposed to oppose this obnoxious method by the outgone Minister are now justifying and defending the oddity by dressing it as a consensus arrangement.

If there was going to be a consensus arrangement, why not take an elected member of the council, who is a freight forwarder, as a consensus chairman?

How could all the 15 freight forwarders agree to a consensus arrangement that returned a retired soldier as the chief regulator of your industry?

That is why the second postulation by some informed commentators looks credible and tenable to us.

It is even more curious to know that members of NAGAFF who are in the majority among the elected members ( about eight of them) will look on while this oddity in the name of consensus arrangement was shoved down their throats.

It is sad that they tacitly endorsed this impunity that produced this oddity given the stance of the association’s high command on the absurdity in 2018.

Hear what Dr. Boniface Aniebonam, the Founder of NAGAFF said when Alhaji Tsanni Abubakar emerged as the chairman of the CRFFN board in 2018.

On October 31st, 2018, Aniebonam described as a “black day” the day Alhaji Tsanni Abubakar was made the chairman of CRFFN.

“A black day in freight forwarding profession in Nigeria. A day rule of law and constitutional provisions may have been thrown overboard by Hon. Minister of Transportation”,

“Hon. Rotimi Amaechi, the Transport Minister, maybe a man with impunity and gut as he set aside CRFFN Act electoral provisions to appoint the chairman of the Council Board 2018 in mafia circumstances”.

Another chieftain of NAGAFF, Freight Forwarder, Simeon Nwonu, declared in 2018 thus:

“Following Chibuike Amaechi’s imposition of one Alhaji Tsanni as chairman of the governing council, Amaechi’s action, contrary to the legal provisions of the CRFFN Act as regards the position of chairman and vice-chairman, has automatically placed the Council on the precipice.”

“It is absolute disregard of the rule of law. It’s not even healthy for the political future of Mr. President (Buhari).

“In fact CRFFN, and by extension, the entire freight forwarding family in Nigeria may not survive this second coming of Armageddon if President Buhari fails to redress the matter.”

If the NAGAFF High Command could rail and rake against the emergence of Alhaji Tsanni Abubakar as the chairman of CRFFN in 2018 which they described as an imposition, why then changed the nomenclature and coated as a “consensus arrangement” the same process that returned the retired soldier as the chairman.

We sympathize with the teeming freight forwarders who are daily groaning under the heavy jackboot of industry service providers who have taken the comatose state of the CRFFN to subject them to multiple charges and mindless extortions.

That the same CRFFN headed by Alhaji Tsanni Abubakar in 2018 which the freight forwarders unanimously condemned as inefficient, inactive, and self-serving, is now returned with the same principal officers, leaves a sour taste in the mouth.

The freight forwarders would do well not to expect a miracle from the fourth governing council of CRFFN as it is a new wine in the old bottle.

We wonder how a non -professional freight forwarder as the chairman could empathize with the freight forwarders and address their welfare issues and other matters that impinge on their professional well-being.

It is only who wears the shoes that knows where it pinches.

If none of the 15 thorough-bred professional and practising freight Forwarders on the board couldn’t find themselves qualified to be the chairman of the body that is statutorily charged with regulating their industry, then the freight forwarders should brace themselves up to accept what comes to them in the next two years of this council since they found it expedient to mortgage the future of the industry and its teeming players by putting its regulation in the hands of a retired soldier.