• Saturday, February 24, 2024
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Delay in Form M processing, PAAR issuance stifling businesses at ports

NEPC harps on non-oil exports for effective economy diversification

The long delay in processing of Form M and issuance of Pre-Arrival Assessment Report (PAAR) to importers by the Nigeria Customs Service (NCS) is stifling businesses at the ports.

Importers, manufacturers and other businesses that depend on the nation’s seaports to bring in both critical production inputs and finished products told BusinessDay that the delay in the processing of Form M, which is sent to Customs and the Central Bank of Nigeria (CBN) for approval through an authorised bank, means that goods ordered by Nigerian importers would not be shipped to the country. If it takes one month for Customs to approve Form M, the goods would be delayed for that length of time. The supplier would keep the goods in his warehouse in the originating country and the Nigerian importer would be made to pay the demurrage such goods would have accumulated before they would be shipped to the country.

In the event that the goods are shipped – that is, if the supplier in the originating country had already loaded the goods, the ship would bring them to Nigeria as expected – they could get trapped at the ports as the importer cannot clear them until he gets all the documentation right. The importer would have to pay demurrage on the goods depending on how long they spend at the ports. All these constitute additional cost to the importer.

E-Form M is an online mandatory document introduced by the Federal Government through the Federal Ministry of Finance to monitor goods that are imported into Nigeria as well as enable the collection of import duties at the arrival of the goods.

The import guideline mandates all Nigerian importers to first process the e-Form M through an authorised dealer bank, irrespective of the value of the goods and whether or not duty payment is involved.

But the delay in the processing of Form M is now posing a serious problem for importers, Tony Anakebe, managing director, Gold Link Investment Ltd, a Lagos-based clearing and forwarding company, said in an exclusive interview with BusinessDay.

“Some banks would push in Form M to Customs and the CBN and would not receive any feedback for two months or more. Our application for Form M hangs with the Customs and the Service has failed to give feedback to importers on whether the application was either rejected or queried,” Anakebe said.

“Today, Customs approves Form M at its leisure and if the supplier has already produced goods that are waiting for shipment, such cargo has to wait till the issue with the Form M is sorted out. With the delay, the importer, who has no other contact except the bank that submitted the application, would be stranded,” he said.

Jonathan Nicol, president, Shippers’ Association of Lagos State, confirmed to BusinessDay in a telephone interview that processing of Form M has become very slow, as well as other unnecessary bottlenecks in the system that pile additional cost on importers.

“Due to these delays, one cannot import regularly as before and in some cases, an importer would end up importing just three times in a year,” Nicol suggested.

“We believe goods not meant for foreign exchange transactions from the Central Bank should be exempted from using Form M, which was the way it used to be. Only goods that require foreign exchange from the CBN should be made to have Form M,” he said.

Nicol said importers are levied as much as $700 by their principal suppliers if they fail to bring Form M to take delivery of their goods, adding that the travail of the Nigerian shippers was growing by the day as in some cases the value of the goods in question would be less than $3,000.

“The importers sometimes pay much more than the value of the imports on levies. Shippers are leaving Nigeria to other liberal and more serious environments. We pay insurance, Customs duty, shipping charges, terminal charges, clearing charges, Customs incidental expenses, transport and 15 percent on Value Added Tax (VAT),” he said.

Similarly, Customs delays issuance of PAAR, a document that is not supposed to take more than 24 hours because it is automated. Many importers have had to wait for PAAR for more than a week, Anakebe said.

Las Alli Shobande, deputy chairman, Freight Forwarders Trade Group of the Lagos Chamber of Commerce and Industry (LCCI), confirmed to BusinessDay that issuance of the e-document now delays for up to two weeks.

“When PAAR was introduced as a compulsory document for importation, it was being issued within 24 hours. Importers were going online through their banks to receive the document same day. However, for some reasons, it is taking much longer these days, up to a week or two,” Shobande said.

The delay being experienced in PAAR issuance has further subjected the document to corrupt practices by Customs officers, said Chinedu Agim, a Customs licensed agent.