Poor PAAR implementation and high cost of clearing goods

C learing of imports from Nigerian seaports has become a hard nut to crack in the past three months, as goods that were formerly cleared and taken to the importer’s warehouse within 14 days now take a minimum of four to seven weeks to clear.

Industry stakeholders attribute the alarming delay to poor implementation of the Pre-Arrival Assessment Report (PAAR) introduced in December 2013 by the Nigeria Customs Service (NCS) to replace the Risk Assessment Report (RAR) formerly issued by the destination inspection service providers.

Currently, it takes importers over one month after the arrival of goods at the port to obtain the PAAR, which is supposed to be issued by Customs before the arrival of the goods. This slows down clearing activities at the port such that importers and their agents spend long time before taking delivery of their consignment.

As a result of this, the cost of doing business in Nigerian seaports has skyrocketed as importers have to pay huge demurrage and storage charges to shipping companies and terminal operators for late clearance of goods from the port.

BusinessDay check reveals that industrialists and manufacturers are the most affected such that majority of the companies are currently in the dilemma of not being able to meet their production deadline owing to the challenges of lack of raw materials as their imported raw materials have been trapped in the port for much longer than necessary.

“Most goods that are in the port have no PAAR to clear them and they are accumulating huge demurrage and rent for the importers. This has made importers to look for alternative, thus the diversion of cargoes to neighbouring West African ports to reduce delay and cost, which is detrimental to the economy,” said Lucky Amiwero, president, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), in a petition sent recently to President Jonathan.

According to him, the economic impact of the high cost of clearance and delays would result to possible closure of most factories due to inability to access imported raw materials from the ports. He also lamented that the scanning process at the various ports were facing some challenges that hindered trade facilitation in the port.

While calling on the Federal Government to set up a team to monitor the operation of scanning machines at the port by Customs, he advocated the creation of a monitoring and evaluation committee “made of experts in trade procedures to evaluate the process and resolve the implementation difficulties that are creating confusion and delays in the ports”.

Tony Anakebe, a maritime analyst, suggested that there should be holistic approach to addressing the problems in the port system. “This is because if the problem of PAAR is left unhandled, it will not be in the favour of terminal operators, neither will it favour the government in terms of revenue generation or the importer that owns the consignment,” he added.

Anakebe, who said the problem was not with the policy of PAAR but with the inability of Customs to allow the port users to adapt to the new policy before embarking on full implementation, confirmed that Nigeria was losing her cargoes to Cotonou port in Benin Republic.

He called for the restoration of the provisional release of cargo formerly used to clear goods so as to enable more people to clear their cargoes, adding that the provisional release should be allowed to run for the next six months, while Customs would need to embark on serious enlightenment campaign within those six months to educate critical stakeholders, especially the importers and the banks, on their roles in PAAR generation.

Uzoamaka Anagor