As the Federal Government concludes plans to have Nigeria Customs begin a collection of excise duties on some products such as carbonated beverages, water, tiles, among others; MMS Plus newspaper is set to organize a business summit to deliberate on the policy.
The event themed; “X-raying the Proposed Excise Duty Regime for Carbonated Beverages in a Recovering Economy” is scheduled to take place on Tuesday, November 9th, 2021 at the MMS International Image Centre in Festac, Lagos while Facebook and Zoom virtual connections will also be available.
According to the organizers of the hybrid conference, a discourse on the subject has become pertinent following the reservations that greeted the proposed re-introduction of the Excise Duty regime on beverages and other sundry items by the Organized Private Sector (OPS).
Some high profile personalities such as the Comptroller-General of Nigeria Customs Service (NCS), Col. Hammed Ali (Rtd.); Executive Secretary of Nigerian Shippers’ Council (NSC), Hon. Emmanuel Jime; Director-General of National Agency for Food, Drug Administration and Control (NAFDAC), Prof. Mojisola Adeyeye.
Others are the President of Manufacturers Association of Nigeria (MAN), Engr. Mansur Ahmed; a trade expert with the Nigerian Economic Summit Group (NESG), Dr. Ikenna Nwosu; National President of Water Producers Association of Nigeria (WAPAN), Mr. Mackson Odiri Egberi and an ex-banker and CEO of Quiet Dimensions Limited, Mr. Ime Udoma; are expected panelists at the event.
Other panelists include the President, Association of Food, Beverage and Tobacco Employers(AFBTE), Engr. Patrick Anegbe; President, Lagos Chambers of Commerce and Industry(LCCI), Mrs. Toki Mabogunje; Executive Secretary, National Action Committee on African Continental Free Trade Area(AfCFTA),Mr. Frank Anatogu.
Meanwhile, the Chairman of Nigerian Ports Consultative Council (PCC), Otunba Kunle Folarin is expected to moderate the dialogue as a refined economist.
Speaking ahead of the event, Editor-in-Chief of MMS Plus newspaper, Mr. Kingsley Anaroke stressed that it has become exigent for the Customs to embark on the engagement of stakeholders to explain the inherent benefits of the policy.
He noted that some questions which should be answered at the one-day business discourse are: “How competitive could Nigerian products be with Excise Duty under the African Continental Free Trade Agreement (AfCFTA)? Should the government insist on the Excise Duty collection despite the complaints of economic challenges?
Marine insurers express frustration, confusion over loosely -worded EU sanctions on Russia.
WESTERN SANCTIONS TARGETING RUSSIAN PRESIDENT VLADIMIR PUTIN’S ABILITY TO SHIP OIL VIA INSURANCE RESTRICTIONS ARE PROVING TO BE A DIFFICULT CHALLENGE FOR THE INSURANCE MARKET TO NAVIGATE.
The lack of detail and loosely worded legislation in Europe’s latest set of sanctions against Russia has posed a series of difficult legal scenarios for the insurance sector to considerMarine insurers are struggling to interpret the ambiguous detail behind the European Union’s sixth package of sanctions targeting Russia and have warned that pending UK legislation may yet complicate matters further.
According to the legal framework released last week, EU countries will phase out imports of seaborne Russian crude over a six-month period and prohibit insurance and reinsurance of maritime transport of crude and petroleum products to third countries.
However, because the EU legislation is not immediate and contains several staging points with multiple caveats allowing continuation in given circumstances, the porous nature of the rules is proving difficult for insurers who demand legal clarity.
There are also concerns over how the UK plans to treat the issue of EU states as ‘Third Countries’.
It is widely expected that the UK, home to the world’s largest shipping insurance market, will follow the bloc’s move with its own insurance bans, however no details have yet been shared by the UK Treasury with the industry.
The UK is a third country from an EU perspective, and it remains unclear whether the UK would treat supplies to the EU differently to supplies to other countries, especially as the EU is treating the UK as a third country.
That means that EU insurers, including the subsidiaries of UK insurers, cannot insure transportation of spot cargoes coming to the UK, and likely vice versa.
‘The issue of supply insurance can be closed at the expense of state guarantees within the framework of interstate agreements with third countries,’ says former president
The lack of details has posed a series of difficult legal scenarios for the insurance sector to consider.
It is not clear, for example, how the Luxembourg-based insuring subsidiary of a P&I Club headquartered in the UK would respond to questions about cover from a Greek member which is asked to carry a spot cargo from Russia to the UK during the wind-down period.
Even if the UK is able to iron out any inconsistencies, the loose wording of the EU’s current guidance has left insurers scratching their heads trying to work out how to apply the EU legislation.
Phrases such as “as soon as possible”, “should be possible” and “exceptional temporary derogation” contrasts with the insurance sector’s requirement for legal black and white.
The EU guidance details an eight-month transition in relation to the transport of crude oil and more than 80 different petroleum products.
There are five wind-down dates, the latest being December 31, 2024 for Bulgaria, with at least 11 other caveats on top.
Specific exemptions such as those detailed under Article ‘3m’ allow for one-off transactions for near term delivery — the implication being that these are for delivery into the EU.
However, Article ‘3n’ does not, so any insurer of a vessel carrying crude or petroleum products to a third country must check that there is a pre-existing contract in place, and not just rely on what could be called the spot cargo exemption.
Lawyers still in the process of interpreting the EU guidance also argue that the notification framework is very unclear in its current format.
The responsibility lies with member states to notify the commission, but there is no guidance on who tells the member state and which one if there is a nexus to multiple different member states.
What happens if a commercial party fails to inform a member state is not yet clear.
Given the extensive nature of caveats and clauses, implementation of the sanctions is likely to prove difficult.
According to guidance note 19 in the EU legislation, states could theoretically declare a temporary derogation.
The clause states: “If the supply of crude oil by pipeline from Russia to a landlocked member state is interrupted for reasons beyond the control of that member state, the import of seaborne crude oil from Russia into that member state should be allowed, by way of an exceptional temporary derogation, until the supply by pipeline is resumed or until the council decides that the prohibition on the import of crude oil delivered by pipeline is to apply with regard to that member state.”
“The implementation of ‘19’ is likely to be particularly challenging in practice as it’s entirely subjective,” explained one senior insurance expert.
EU ban covers ‘insurance and re-insurance of Russian ships by EU companies’.
Compromise will allow Russia’s pipeline oil exports to the EU to continue temporarily, while seaborne shipments are blocked by the end of the year
Despite the lack of clarity, assuming that the UK eventually prohibits the insurance and reinsurance of Russian oil shipments to third countries, lawyers and insurers agree that the combination of jurisdictional approaches will likely prevent many mainstream tanker owners from lifting Russian cargoes.
According to Broker BRS, however, it will not completely choke off Russian exports.
As Lloyd’s List reported this week, alternative, albeit smaller, insurance markets, notably in China and Russia, will remain open.
“Although this will discourage mainstream tanker owners from lifting cargoes, it will not likely discourage ‘niche’ tanker owners whose vessels are already involved in the transport of illicit Iranian and Venezuelan oil,”
BRS said in its latest research note. “Since the sanctions package was finalised, we are already hearing of significant insurance issues.”
Western companies are reluctant to insure voyages passing via the Black Sea.
Meanwhile, due to the restrictions placed on the Russian banking sector, companies are reluctant to insure tankers loading from the CPC terminal close to the Russian port of Novorossiysk.
Although CPC blend is composed of 90% Kazakhstani crude and thus not embargoed, if there was an accident at the terminal, it would be difficult to compensate Russian entities without falling foul of sanctions.
Lawyers and insurers await details from UK Treasury over planned Russian sanctions to match EU sixth package as concern mounts over ‘Third Party’ countries application of rules
Fidelity Bank boosts local rice production with N34bn
Fidelity Bank has facilitated the disbursement of over N34 Billion in direct credit to players in the Nigerian rice value chain.
The bank’s interventions in recent years have helped to unlock spontaneous financing opportunities for a large swathe of paddy rice farmers with significant contributions to the expansion of national paddy rice output.
Only recently, the bank part-financed the construction of a 400 metric tons per day mega rice mill in Kano state owned by the Gerawa Group of Companies.
Commenting on the development, Mrs. Nneka Onyeali-Ikpe, Managing Director/CEO, Fidelity Bank Plc, said, “Through our interventions in the rice space, we have created a positive impact in rural communities by way of farmer empowerment and employment generation. This is also in alignment with the business sustainability imperative of our banking business.”
Shedding light on the bank’s activities further down the value chain, Mrs. Onyeali-Ikpe stated that the bank directly financed the construction and installation of several integrated rice mills across different geo-political zones in Nigeria. These rice mills have a combined rice milling capacity in excess of 500,000 MT per annum.
Recognizing the importance of the last mile traders in the value chain, she noted, “We have also provided low-cost funds to rice traders to purchase rice from indigenous rice millers for sale to the final consumers. This has helped in stabilizing the prices of locally produced rice.”
Whilst stressing the importance of imbibing sustainability practices, Mrs. Onyeali-Ikpe points out that the bank has modeled effective social and environmental sustainability frameworks into its agribusiness deal structuring workflow to address social and environmental sustainability requirements.
This, she said, follows the CBN’s Sustainable Banking Principles and Sector Guideline, IFC Performance Standards and Equator Principles.
The bank’s activities have continued to receive recognition by operators, funding partners and all other actors in the agribusiness space.
At the Bankers’ Committee meeting of December 2019, for instance, Fidelity Bank was awarded 2nd position in Sustainable Agriculture Transaction of the year.
Stakeholders express concerns over continued closure of land borders
They argued that the Federal Government only opened its borders with Benin, Cameroun, Chad and Niger in December 2020 for the movement of people while the movement of goods remained blocked.
The stakeholders warned that if the borders are not fully opened, the economy would be negatively affected with impacts on the Africa Continental Free Trade Agreement (AfCFTA) as many African countries may blacklist Nigeria this year 2022.
President of the Association of National Licensed Customs Agents (ANLCA), Tony Nwabunike, said more than 3,000 businesses have closed, with over 300,000 jobs lost due to the closure of some land borders to trading activities.
According to him, the reduction in trans-border trade contributes to the weakness of the naira.
Nwabunike claimed that keeping the borders closed where there are no security issues is a sign of non-compliance with the Economic Community of West African Countries (ECOWAS) and African Continental Free Trade Area (AfCFTA) treaties, of which Nigeria is a signatory.
“And as a country, we should not be signing treaties and agreements we won’t comply with, because compliance concerns all of us.
“Nigeria, her agencies and private business operators all have a responsibility to be compliant. Let us all build a culture of National integrity on all fronts at home and in the eyes of the global trading community,” he said.
The ANLCA president urged the Federal Government to reopen all approved borders, particularly, in the Southwest and other areas with less threat of insurgency, to allow trading activities to resume with its accompanying benefits of economic growth and job creation.
A lecturer at the Nigeria Maritime University (NMU), Okerenkoko, Charles Okorefe, said while Nigeria continues to shut its borders to trading activities, the Port of Lome currently records 30 percent higher cargo throughput than Lagos ports, as investors and importers prefer to do business in other neighbouring countries.
Okorefe, who is also the author of ABC of Shipping and ports operation in Nigeria, said such imports end up in the Nigerian market despite the continued border closure, which he said has multiplied smuggling.
“This act of “protectionism” itself negates the spirit behind AfCFTA.
“We cannot continue to take extreme measures, which hurt genuine businessmen and run counter to the letter and spirit of treaties and agreements signed by Nigeria.
“There is a need for concrete inter-agency dialogue with the Organised Private Sector to have a short, medium and long term plan to ensure proper cross border trade facilitation, which will engender security of life and property, improve the ease of doing business and our economy,” he stated.
A former Assistant Controller General of the Nigeria Customs Service (NCS), Baritor Kpagih, said the border closure has been counter-productive to its aim, especially, as smuggling still persists in Nigeria despite the presence of customs officials.
He said the Benin Republic records a high import volume of parboiled rice cargoes, which are sent to Nigeria for consumption.
He questioned why the 41 import prohibited items flood the Nigerian market despite the presence of the special border patrol.
Kpagih stressed that the border closure is contrary to the ECOWAS trade law and could hurt Nigeria in AfCFTA, suggesting that there should be an urgent reopening of the closure, which has outlived its usefulness.
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