Unstable exchange rate to worsen cargo volume decline at Nigerian ports – Farinto

The unstable exchange rate set by the Central Bank of Nigeria (CBN) for payment of import duty will continue to lead to a further drop in cargo volume at the nation’s seaports if the government fails to take prompt action to address the problem, frontline Customs broker, Kayode Farinto, has warned.

The nation’s seaports have been experiencing a decline in cargo volume in recent months, with many importers and clearing agents struggling to cope with the fluctuating exchange rate.

Speaking in a chat with newsmen in Lagos on Friday, Farinto, a former Acting President, Association of Nigerian Licensed Customs Agents (ANLCA) lamented that many importers are currently unable to import due to the unpredictive exchange rate, resulting in a significant drop in importation levels, with bulk cargo imports dropping by 20%, containerized goods by 30%, and vehicle imports by 55%.

He noted that the situation has also been difficult for freight forwarders, with many losing their jobs and some even losing their lives.

He said, “On Wednesday, the exchange rate was N1,474 by Thursday and Friday morning, it has increased. A cent is important to every business man because if you’re using bank loan you have to put all these into consideration. We had a week where we have more than five exchange rates. That is not too good for our economy.

“We have three levels of importation. We have bulk cargo, containerised goods and vehicles. The level of import on vehicles has dropped to about 55 percent, level of import on containers has dropped to about 30 percent, on bulk cargo it is about 20 percent. So we are not really winning the war.

“The situation has not been very rosy for us in the industry particularly the freight forwarders. We are not faring well. We have some people who have actually left the job, some still remain thinking tomorrow will be a better day and we have some who have died. I can tell you that we lost a lot of members this year.

“My prediction is that the volume of import will continue to nosedive if nothing is done. I’m also an importer. If you want to appreciate what I’m saying, go to manufacturers’ association and ask them what they have imported in the last few months.”

Farinto, who is also the CEO, Wealthy Honey Investments Nigeria Limited criticized the CBN governor for refusing to listen to the concerns of stakeholders, stating that a predictive exchange rate is necessary to enable importers predict and plan their costs.

“I keep saying we have a CBN that is so arrogant they believe because of their new law that has been amended they can do whatever they like. I told the CGC that he’s not helping issue. Negotiate with the CBN, draw them to the minister of finance, seat on a round table and involve us. I even suggested a tripartite meeting between CBN, Customs and Ministry of Finance or CBN, Customs and freight forwarders and we will be able to tell the CBN that what they are doing is not helping the economy and if we continue like this, the economy will just go in shambles, perhaps they will listen to us but up till now nothing has been done about it.

“The only solution is for us to have predictive exchange rate for Customs purposes alone. It’s not too much to ask. We pegged the exchange rate for pilgrims going to Saudi Arabia and Jerusalem during Buhari’s era. Why can’t we do the same for importers?”

“If they have pegged exchange rate for import purposes alone at N1000 since January, importers will be able to predict.We have a lot of importers that are not importing now because they cannot predict the FX rate.”

Speaking on the recent revenue milestone recorded by the NCS, Farinto stated that the high revenue was merely a result of the increased exchange rate, nothing that it’s not a cause for celebration.

“If you look at my analysis of the Customs CG, Adewale Adeniyi, I scored him 55% on revenue. Nobody has deemed it fit to ask me why. If you generate revenue at an exchange rate of N1,900, it’s obvious that your revenue will increase. It’s simple arithmetic.

“You need somebody with the technical know-how to tell you that you are not suppose to celebrate and that’s why I scored him 55 percent. It’s a very technical thing.

“Of course you should expect that the revenue will increase because if you have 40 cargo last year within this period and now let us even assume that you have 20 cargo but you are generating at N1,700 per dollar definitely your revenue will increase. That’s why I said we are not suppose to celebrate, ” he said.