Importers and exporters sending and receiving cargoes through the Murtala Muhammed International Airport (MMIA) Lagos have seen a halt in their businesses in the last one week over the strike action of customs agents.
The Association of Nigerian Licensed Customs Agents (ANCLA), MMIA chapter, withdrew their services on April 25 after Nigerian Aviation Handling Company (NAHCO) and Skyway Aviation Handling Company increased ground handling charges by 100 percent.
A visit by BusinessDay on Tuesday to the export wing of the cargo handling shed at NAHCO showed several cargoes piled up with perishable goods at the facilities.
“I have lost a lot of money in the last one week over the strike action of the customs agent. I was supposed to export fresh vegetables to London last week. I had paid for the clearance and had expected the vegetables would have arrived in London the next day only to be told that customs agents were on strike and the products are still at the cargo shed,” Ogonna Felicia, an agro cargo exporter, told BusinessDay.
Felicia said she usually exported agro produce at least twice a week to London but in the last one week, business has been shut down because she has not been able to export any of her produce.
“One of the reasons my friends and I started this export business was because we got assurances from the Nigerian Export Promotion Council that export will be made seamless for us. This is so discouraging for young entrepreneurs, especially at a time the government is looking to grow the non-oil sector of the economy,” she added.
Chisom Ude, a spare parts dealer who is also affected by the strike action, told BusinessDay that his customer had ordered for some spare parts, which arrived in the country a week ago but he hasn’t been able to access the goods because of the strike action.
“I prefer to ship my products into the country. However, this time, the customer was pressed for time and had insisted that the products be sent through airfreight. I was happy to hear the products arrived five days after we made the orders. But one week after the goods arrived, we have not been able to get the goods out,” Ude said.
Davies Chukwuneye, vice chairman of ANCLA, told BusinessDay that there has been no progress since the strike commenced.
Chukwuneye confirmed to BusinessDay that people have not been able to clear their goods, adding that the impact on businesses is getting very bad.
“Perishable cargoes are laying waste at the facilities. Those who were not able to take their products back abandoned them. The farmers already know the situation and know they can’t keep their goods at the warehouse. So, for now, no exporter is bringing perishable goods,” he said.
During a press conference last week, the ANCLA vice president said the association viewed the increase as obnoxious and highly insensitive and has held series of meetings with both ground handling companies, pleading with them to reduce the tariff but to no avail.
He said: “At the second week of February, the ground handlers sent a circular to the executive of ANLCA, introducing an upward review of 300 percent on their handling and other charges.
“In view of this, the union excos entered into negotiation with the ground handlers specifically to make them realise that increment at this time is ill-timed and that it will definitely have negative effects when it was still less than three years they had the last increment.”
He said the increment will send many customs agents out of business. “That is why the agents are pleading with the relevant agencies and stakeholders to intervene, so that it would not generate a crisis that would be difficult to control.”
Seyi Adewale, chief executive officer of Mainstream Cargo Limited, said the ANCLA strike will have a significant long-term negative impact on aviation cargo or trade services to Nigeria.
Adewale said airlines may choose to aggregate their aircraft spares in another African country and turn it into its ‘repair and return’ hub, adding that this also has implications for promoting the building of MRO in Nigeria.
He said: “We are already losing this to Morocco; non-competitiveness in export of agro products and perishables. Imagine those that want to export green vegetables, and pineapples, among others, to Europe.
“What is the shelf life of these items? EU clients and importers will surely prefer a relatively more stable and predictable environment like Kenya for procurement of these products or produce,” Adewale said.
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Segun Ajayi-Kadir, director-general of Manufacturers Association of Nigeria, said in a statement that the implications of the increase in excise duty for 2023 will reduced production volumes with its attendant result on downward trend in capacity utilisation; increased illicit trade in some of the affected products; and erosion of members’ market share and revenue, especially following continued devaluation of the naira against major currencies,
Ajayi-Kadir said the increase will lead to inflation and increased security challenges faced around the country; freeze on employment and redundancies in the manufacturing industry and squeezed margins as its members are unable to pass additional costs to consumers by way of higher prices, given their eroded income and dwindling purchasing power.
“Apart from the above challenges faced in the business environment, manufacturers also have to contend with currency devaluation and increasing inflation resulting in higher cost of production as our members have little to no access to foreign exchange at the official window and have to resort to the parallel market at an extra cost of around N300 to $1.00,” he said.
He recommended that the government should maintain the status quo regarding the already government-approved excise duty increases on these items in the three-year roadmap as contained in the 2022 Fiscal Policy Measures.
