Cargo diversions loom on back of import processing delays

Nigerian businesses are considering routing their imports through the neighbouring ports of Benin Republic to by-pass time consuming import documentation bottlenecks instituted by the local authority.

Recall that the Central Bank of Nigeria (CBN) recently issued a directive, which requires all form ‘M’ (a letter of intent to import goods to Nigeria) to be submitted for processing by the apex bank, with documents such as the pro-forma invoice, insurance certificate and written confirmation from the authorised dealer bank, showing the source and evidence of funds.

These documents are expected to be validated and approved by the apex bank before the importer would be allowed to carry out such transactions.

This is coming at a time when importation into Nigeria is largely slow and affected by the devaluation of naira against dollar, a slow economic climate and difficulty in accessing foreign exchange, owing to the recent CBN policy placing restriction on importers of 41 selected items from accessing foreign currency in the official foreign exchange market.

BusinessDay search reveals that though the CBN assured importers that Form M processing would be brisk , importers and their agents have started getting flustered with the pace which they describe as slow.

“If shippers find it difficult to open Form ‘M’ for incoming cargo, they may consider diverting their cargo through neighbouring countries. Processing Form ‘M’ through the CBN is not the normal procedure and it is causing a lot of delay in cargo imports through the ports,” said Kayode Farinto, the National Publicity Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA).

The association, which recently petitioned the Central Bank of Nigeria (CBN) over delays in the issuance of Form ‘M’ by banks, also said that a letter of complaint had been dispatched to Godwin Emefiele, the CBN governor, stating the position of the association on the new directive requiring importers to open and process Form `M’ from an authorised dealer bank through the CBN.

According to Farinto, importers and exporters are experiencing hard times as a result of delays in getting the Form ‘M’ needed for their transactions.
He further observed that the inability to quickly process Form ‘M’ could lead to the diversion of cargo to neighbouring countries, adding that over 1,000 forms were currently crawling through the bureaucratic process in the banks.

“I see Nigerian cargoes being diverted to ports in the neighouring countries where it is cheaper and easier to clear and bring in goods through the land borders into Nigerian markets”, said Tony Anakebe, managing director of Gold-Link Investment Limited, a clearing and forwarding company.

“If the problems already created by the new CBN procedure for registration of Form ‘M’ for goods not valid for foreign exchange are not handled in earnest, I also see a situation where Nigerian ports will lose some cargoes to other ports of Benin Republic, Togo and Ghana”, he said.

He added that the new CBN directive was already impacting on the import system in Nigeria and showed signs of bringing more hardship on importers, especially those importing the 41 items restricted from accessing foreign exchange.

The system is becoming over-regulated and does not help business to thrive, especially in an import dependent economy, where even raw materials for the manufacturing sector are mostly imported,” said Muda Yusuf, director-general of the Lagos Chamber of Commerce and Industry (LCCI).

Yusuf questioned the rationale for subjecting importers to such rigorous processes, given that such importers are not importing contraband goods and have been denied access to foreign exchange from the CBN’s approved foreign exchange market.