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Customs driving high cost of doing business at ports— Akintola Williams Deloitte

Akintola Williams Deloitte, leading Nigeria accounting and auditing group has released a report on the causes of high cost of doing business at the ports and indicted Nigerian Customs Service (NCS) as the worst culprit.

This is coming as the 60 days window given by the presidential committee to drive ease of doing business in Nigeria rolls away with no clear success.

The new report said Customs processes are responsible for not less than 82.1 per cent of the charges incurred by consignees which formed major part of the poor ease of doing business at the Nigerian ports.

Other players in the port business fingered by the report include shipping companies, Nigerian Ports Authority, terminal operators, clearing companies and haulage services providers.

It said shipping companies were responsible for 13.8 per cent of the port charges (N897,000); terminal operators, 1.8 per cent (N117,000); transporters, 1.1 per cent (N71,500); and clearing agents, N78,000.

In a report titled; ‘Public Private Partnership as an anchor for diversifying the Nigeria economy: Lagos Container Terminals concession as a case study’, which the firm has just published, the Accounting group said its value chain analysis of a 20-foot container laden with cargo worth N44.42m ($100,000) imported into Nigeria from China revealed that about N6.5m would be required to clear and transport the container out of the port.

It said out of this amount, about N5.3m (representing 82.1 per cent) is paid to the NCS as Import Duty, Comprehensive Import Supervision Scheme, ECOWAS Trade Liberalisation Scheme, Port Development Surcharge and Value Added Tax.

According to the report, “The value chain of a typical container terminal operations begin with the shipment of the goods through a shipping line to the host country. The consignee pays the freight charges for the shipping as well as the container deposit fees. Demurrage charges may apply where the consignee fails to return the containers on time”.

“Upon arrival of the container at the Nigeria port, the consignees pay terminal handling charges, storage charges, delivery charges and customs examination charges to the terminal operators. In addition, the consignees also pay the relevant Customs import duty.

“Consignees pay for logistics services to get the goods out of the terminal. Consignees pay for the services of the clearing agents (where applicable). Large companies are directly responsible for clearing their goods.”

But in a sharp reaction, NCS through the image maker, Mr. Joseph Attah disagreed with the report saying “The duty payable on anything depends on what you have imported. We have a book called Common External Tariff (CET) which contains the various items chargeable by customs and whose rates come across all the members of ECOWAS sub-region.”