The nation’s port industry is expected to sufficiently return to its ‘hustling and bustling’ state in the last quarter (Q4) of 2017, as importers and manufacturers begin to enjoy the recent Central Bank of Nigeria (CBN) intervention in the foreign exchange market.
The CBN’s intervention has helped to crash the black market exchange rate of the dollar against the naira from a record high of N525/$ to N360/$.
“The shippers, especially the manufacturers, are currently having foreign exchange allocation in peace meals for import oriented transactions. So, it is hoped that from September all through December 2017, there might be an increase in cargo throughput if the CBN intervention in the foreign exchange market is sustained,” Jonathan Nicole, president, Shippers Association of Lagos State, said in a telephone interview in Lagos.
Nicole described the new foreign exchange policy as encouraging, as it now allows importers to bid for foreign exchange for goods that require exchange transfers through the CBN.
“We mean imports that require payment to suppliers after 90 days of receipt of goods. This is indeed a boost and it was how it has always been in the past. From shippers’ perspective, it is a culture we abandoned and adopted a series of negative policies to benefit a few against the best interest of the economy,” Nicole said.
The recent National Bureau of Statistics (NBS) report says that Nigeria recorded 26 percent decline in ship traffic in 2016, which was the highest drop in ship traffic into the seaports in recent time. The decline was largely due to low import volume following the high rate and scarcity of foreign exchange, ban on import of 41 items from accessing foreign exchange from the official window, including the economic recession that enthroned low business activities in the country.
Nicole, who emphasised that the impact of the new forex policy would be sufficiently felt in the last quarter of 2017, stated that it took about three months to complete import documentations and transfers of Form M to suppliers.
“Goods sourced will be in the vessel after four weeks or more, and it takes between 14 and 21 days to receive goods from Europe and one month or more from Asia and the USA. And importer can hardly conclude three different import transactions in a year. This accounts for the number of containers importers bring to secure wasted time.
“We support the CBN for its present flexibility in foreign exchange allocations, especially the Basic Travel Allowance. We hope the CBN will continue with this as imports and exports are already been complemented to strike a balance because countries that receive our exports sometime demand reciprocal trade balance,” he said.
Going forward, he observed that there was need for the Federal Government to employ every official means to curtail black market dealers. “In the early 80s, people hide to buy foreign currencies through the black and if such a person was caught the currency will be forfeited,” he said.
Tony Anakebe, managing director of Gold-Link Investment Limited, a Lagos-based clearing and forwarding firm, who said the new forex policy if sustained, would help to bridge the gap between the demand and the supply of foreign currencies to end users, observed that it was not yet easy for importers to access dollars at the banks.
This, according to Anakebe, is due to the fact that banks currently as stipulated by the CBN regulate the quantity of dollar that should be given to their customers, including the importer. “The quantity of foreign exchange given to importers is still not sufficient enough to completely eliminate the scarcity problem. This is why it will take longer time for the impact of what CBN is doing to be felt by importers,” Anakebe said.
He however called on the CBN to review the much talked about 41 selected items, whose importers were restricted from accessing foreign exchange from the official, especially as it concerns the manufacturing sector by enabling them to bring in critical inputs.
Emma Nwabunwanne, a Lagos-based importer, who pointed out that the new foreign exchange policy had help in reducing the exchange rate of dollar against the naira in the black market, expressed worry that the CBN paid more attention to BTA, medical tourism and school fees, with no direct return on the economy than making dollar available to the real sectors.
He pointed to the need for adoption of a more encompassing foreign exchange policy that would definitely drive business activities in the economy and volume in the seaport by way of import and export trade, and see to the reduction of exchange rate.
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