Business
MAN Accuses NCS, NPA Not Giving Priority to Trade Facilitation
The Manufacturers Association of Nigeria (MAN) said this morning that some of the government’s agencies are not “walking the talk” on ease of doing business, citing the recent introduction and implementation of the 4% Free-on-Board Levy by the Nigeria Customs Service ( NCS) and the NPA 15 percent ports tariff.
Segun Ajayi-Kadir, the Director-General of MAN, stated that the Association views those development as an unfortunate addition to the 1% Comprehensive Import Supervision Scheme (CISS) fee being paid by its members at a time that all Government agencies should be seeking ways to deescalate cost of doing business in Nigeria, as it is being done in other economies.
Ajayi-Kadir noted: ” It is equally worrisome that this is coming at a time when there is a planned 15% hike in port charges and industries are struggling with the astronomical increase in the effective import duty calculations rate.
” We had expected that the NCS would give priority to trade facilitation in view of the prevailing economic downturn, rather than exacerbating the spiraling cost of production.”
The statement reads: “This is in view of its potential wider implications on the economy in the form of low productivity, increased unemployment rate and consequent higher propensity to criminal activities and insecurity, not to mention the negative impact on the disposable income of the overall economic wellbeing of the over 220 million Nigerians.
We had expected that, in line with the prevailing economic reform agenda of government that seeks to streamline fiscal policies and engender a progressive and business friendly tax regime, we should be witnessing a winding down of regulatory and official fees by government agencies and institutions.
All government institutions should recommit to the reduction of the cost of doing business, expanding the scope of businesses and broadening the nation’s revenue base.
Our aversion to the introduction of the levy is further predicated on the following reasons:
1. The already high rate of calculating the customs duty exchange rate and the new levy will further escalate the cost of imported raw materials, which had earlier jumped by over 118 percent from ₦2.07 trillion in the first nine months of 2023 to ₦4.53 trillion in the same period of 2024.
- 2. The levy will cause heavy disruption in supply chain, trigger raw materials stock-out in many manufacturing concerns, inflict higher cost of demurrage, further increase the huge volume of unsold inventories and worsen the competitiveness of Nigerian manufacturers.
- 3.The levy is coming at a time when the headline inflation has hit a historic record of 34.8 percent in nearly three decades and majority of Nigerians are struggling. Therefore, the impact on the cost of locally produced items will be instant and far reaching.
4.The introduction of the levy contradicts the principles of the ongoing Fiscal Policy and Tax Reforms and the spirit behind the tax bills currently being considered by the National Assembly.
These efforts are targeted at eliminating multiplicity of taxes and reduction of tax burden for households, manufacturers and other private businesses.
- As an addition to the existing 1% CISS fee, extant duties and other cargo clearance charges, the new Customs Operations levy will increase import transaction costs, compound the already high cost of doing business significantly.
- The introduction of the levy is an additional incentive to smuggling, trade diversion, under declaration of duty and other trade infractions that has bedeviled our country, stretched the capacity of our Customs Service and undermined the revenue profile of the country.
- It will jeopardize the plan of the Federal Government to boost forex earnings through non-oil export, as many manufacturing exporters rely on imports for vital inputs and machines that are not available locally.
- The levy will jeopardize our aspiration to be an investment destination of choice and an industrial hub in the West African sub-region.
The need to increase government revenue is not lost on manufacturers. We have consistently advocated for the expansion of the tax base and not introduction of new taxes or increase in existing ones. It is not helpful to kill the goose that lays the golden egg.
Appreciable improvement in trade facilitation infrastructure and processes would encourage significant increase in volume of transactions and give rise to the much needed revenue for Government.
This is the way to go. It is in view of the foregoing that we implore the Federal Government to urgently direct the Nigeria Customs Service to halt the implementation of the 4% Free-on-Board Levy.
We equally urge Mr. President to direct the Service to engage with relevant stakeholders and the Presidential Committee on Fiscal Policy and Tax Reform in order to align with the ongoing landmark and wholesale reform agenda of Government.
Business
Israel-Iran conflict sharply drives Nigerian petrol prices up as crude oil hits $74pb
According to Petroleumprice.ng, the depot prices of petroleum products would continue to rise in the coming weeks, due to instability of the global oil market.
The ongoing Israeli-Iran conflict has triggered an upward adjustment in petrol prices by 10 marketers as crude oil rose 8.8 per cent to $74 per barrel from $68 per barrel.
The 10 oil marketers that adjusted depot prices included Aiteo, Pinnacle, Dangote, MENJ, Swift, Rainoil, First Royal, Emadeb, First Fortune and Ever.
EMADEB made the highest adjustment to N845 from N827 per litre, indicating an increase of 2.18 percent while Ever implemented the least adjustment to N870 from N866 per litre, showing a marginal increase of 0.46 percent.
Also, Aiteo adjusted its depot price to N840 per litre from N835 per litre; Pinnacle adjusted to N845 per litre from N829 per litre while Dangote Petroleum Refinery adjusted to N840 per litre from N830 per litre.
MENJ, Swift and Rainoil (Lagos) adjusted prices to N850 from N810 per litre, N845 from N830 per litre and to N850 from N840 per litre, respectively.
First Royal and First Fortune also adjusted their depot prices to N838 from N826 per litre and N860 from N850 per litre, respectively.
According to Petroleumprice.ng, the depot prices of petroleum products would continue to rise in the coming weeks, due to instability of the global oil market.
Crude prices are expected to rise further should Iran carry out its threat to block the Straight of Hormuz, which is responsible for the shipment of more than 20 per cent of global oil and gas.
Business
Israeli-Iranian war: Good News for Nigeria’s Oil Sector — CPPE
Economies around the world [Nigeria inclusive] would witness a surge in the price of petrol, diesel, jet fuel, gas and related products in the near term.
Dr Muda Yusuf, the Director/Chief Executive Officer Centre for the Promotion of Private Enterprise [CPPE], says that the outbreak of war between Israel and Iran , if it persist, is beneficial for the Nigerian economy, especially the oil industry.
In a statement on Sunday, Dr Yusuf, noted : ” A major driver of energy prices in Nigeria is the global crude oil price.
With the outbreak of the Israeli-Iranian war, crude oil prices had surged to $75 per barrel from $65 per barrel a week before. This is a 15% jump within days.
This has obvious implications for petroleum product prices globally.
Economies around the world [Nigeria inclusive] would witness a surge in the price of petrol, diesel, jet fuel, gas and related products in the near term.
This would have far reaching implications for many economies and businesses.
“He continues: ” Crude oil price has surged to $75 per which is about 15% higher than before the outbreak of the Israeli–Iran conflict.
This development would also positively impact the country’s foreign reserves, ensure better forex liquidity and ultimately the stability of the naira exchange rate.
Revenue Effect.
The oil sector currently accounts for about 50% of government revenue.
An improvement in crude oil price would therefore have a significant impact on government revenue.
An improvement in revenue would positively impact fiscal consolidation and hopefully moderate the growth of the fiscal deficit.
Oil And Gas Investment Effect
Investments in the oil and gas sector would post better returns if the conflict persists. High oil price is good news for upstream oil and gas investors.”
Business
BACITI Urges NPA to Accelerate Ports Digitization, Peering Kenya, Morocco and Rotterdam
BACITI further noted that without the full digital upgrades, the full promise of AfCFTA remains out of reach.
The Bashir Adeniyi Centre for International Trade and Investment (BACITI) of the Nigerian Institute of International Affairs (NIIA), called on the Nigerian Ports Authority (NPA) to accelerate full digitalization of the port community system (PCS) across all major ports in the country.
BACITI made the call in its just released May Economic Insight, noting that the competitiveness of Nigeria’s sea ports are still below that of Morocco, Kenya, Singapore and Rotterdam.
Said the report: “The World Bank recently ranked Lagos ports at 311 out of 370 ports globally in its Container Port Performance Index (CPPI).
” Nigeria is West Africa’s trade gateway. According to the Nigerian Ports Authority (NPA, 2024), Nigerian ports handle over 80 percent of national trade volume.
In 2023, Lagos ports alone processed 1.5 million TEUs (Twenty-foot Equivalent Units) — about 70% of Nigeria’s container trade.”
Conversely, in digitalization and smart ports, Singapore and Rotterdam lead the way: over 95 percent of port transactions are fully digital.
“Equally, in Africa, Tanger Med (Morocco) has become a continental model, reducing dwell times from 12 days to 3 days through Port Community Systems (PCS) whereas, in Nigeria, long port dwell times further raise costs, undermining the competitiveness of African businesses.”
BACITI further noted that without the full digital upgrades, the full promise of AfCFTA remains out of reach.
It added : In a world of unpredictable shocks, Africa’s best defense is a strong, flexible continental trading system. Building resilient port and trade logistics in Africa will nothappen overnight, but the trajectory is set. Nigeria, with its immense economic weight, has a leading role to play in this journey.
By modernizing its ports, investing in infrastructure, embracing digital efficiency, and championing the tenets of AfCFTA, Nigeria can transform to a powerhouse of regional trade.
This transformation is already underway – seen in projects like the Lekki Deep Sea Port and initiatives to streamline port operations.
The ripple effects of a more efficient Nigeria’s ports will be felt across the continent: smoother supply chains, more robust intra-African commerce, and better insulation from global turbulence.”
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