Importers in Nigeria are finding it extremely difficult to access foreign exchange needed to do business abroad, Tony Anakebe, the managing director of Gold-Link Investment Ltd, has said.
According to him, about 80 percent of importers now source foreign exchange from the black market at a very high cost, and this was the major reason prices of goods are skyrocketing in the market, and many Nigerians are getting poorer.
While expressing worry over the non-uniformity of the exchange rates in the country, Anakebe said in an interview with BusinessDay, that importers want a monetary policy that will have a human face.
“In the next six months, the number of Nigerians that can buy pharmaceutical products will reduce because almost all the drug importers are sourcing FX from the black market, and this will hike the prices of drugs this year,” he predicted.
A lot of products, he noted, are banned from accessing FX through the official window, and sadly most of those products are essential to many Nigerians.
“When pharmaceuticals cannot open Form M, where do you want the hospitals to get drugs? And when such importer source FX from the black market, the cost of drugs will automatically become very high,” he explained.
On the implication of the high cost of exchange rate, Anakebe said that if an importer was importing one or two containers of goods before the rate went to over N500 per dollar, the volume will reduce to half or one container.
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Anakebe, who is a clearing and forwarding expert, said that transportation in and out of Tin-Can Port has also not been easy such that returning empty containers to terminals at Tin-Can Port can take up to four weeks due to the mounting of checkpoints by security operatives, and the protracted road construction on the Tin-Can axis of Apapa-Oshodi Expressway.
“Despite the Nigerian Ports Authority (NPA) policy of not returning empty containers to the port, some shipping lines still mandate shippers to bring their containers to the port. For instance, an importer that uses Grimaldi Shipping must return the empty to their terminal at PTML and it will take more than three weeks to do so,” he said.
Continuing, he said: “In some cases, importers still take containers belonging to MSC to Tin-Can port as well. The contractor in charge of the construction works on the Tin-Can axis of the Apapa-Oshodi Expressway needs to open up the road for use. Also, there should be a way to handle the volume of tankers coming to that axis to access the tank farms because even if the road is fully constructed the tanker drivers would continue to constitute a nuisance. There is a need for serious planning and organisation of the movement of tankers into the farms.”
On how the port business fared in 2021, Anakebe said that the outbreak of Covid-19 was a huge hindrance in the maritime industry in 2021.
He said that Covid-19 affected the global port industry to the extent that there was a hike in freight cost by shipping companies, and long delay in getting empty containers for loading goods from the port of origin.
“This affected a lot of shippers and industries in Nigeria by limiting their ability to load goods. At a point last year, most shipping companies preferred to load from China to the US rather than coming to Africa because US-based importers were ready to pay over $20,000 to move a 20-foot container from Far East Asia,” he explained.
Shipping companies, according to him, were among those that benefited from the supply chain crisis that occurred in 2021 as they continued to declare high profits in 2021.
On the outlook for 2022, Anakebe said that naira would likely fall the more, and given the increment in the revenue target for Nigeria Customs, business would likely not be rosy for shippers this year because the cost of clearing would be very high.
“Nigerian maritime industry is more than $5 trillion industry and shippers need technocrat at the leadership of the Nigeria Customs to pilot the digitalisation of cargo clearing processes in the port. This will help to reduce the number of Customs units involved in cargo clearance. There is also need for 24-hour cargo clearance at the port to fast track cargo delivery,” he suggested.
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