Published On: Tue, Jun 18th, 2019

How government bureaucracy hinders exporters business in Nigeria’s airports

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By Albert Akota

Exporters in the country over the years have expressed worry over the challenges causing the low airfreight in the country, ranging from government policies, high quarantine tariff on farm produce, high cost of doing business, limited airline operators, lack of agriculture policy to support farmers, inadequate infrastructure facilities and logistics problems amongst others.
However, looking at these enormous challenges, the Nigerian Shippers Council (NSC) has been looking for ways to resolve the challenges causing low airfreight at the various international airports leading to exporters using other neighboring countries rather than Nigeria.
Recently, NSC organised a one-day Airfreight Summit with the theme “Diversification of Nigerian Economy, Exploring the Potentials of Airfreighting of Agro-Allied Commodities” to highlight the challenges stakeholders face.
Mr. Toyin Olufade, the National Chairman of Airfreight Stakeholders Forum (ASF) has attributed high tariff by government agencies at the airports as part of the challenges affecting freight in the country.
Olufade said there should be government policies that will give waivers when it comes to trade, stating that government agencies should not see trade as an avenue to generate income.
“The state and federal government has to make it a policy not to overtaxed, they should be tax waivers to encourage the use of those airports.
“We are talking to them, it’s not everything you make money from, even if you are to be making minimal to encourage export and have new comers invest in the export and import trade.
“There have been various challenges we have been facing, particularly in the area of cost and procedures, when we say cost, we are talking about either multiple charges ,FAAN cost ,tax charges airline cost as well as exchange rate.
“All these challenges affects trade in the country,” he said.
The chairman, however said that the forum plan to partner with state governments to encourage exports by the use of those cargo terminals.
He said that government should create a single window transaction to cut down the strenuous documentation at the airport during exports.
“We’ve also been asking for single window of transaction from the government where we don’t need to go from one office to the other because it delays the processes but we are hoping to put that in place.
“Although, the government said there should be single window, we are now in the process of designing the map that will tell you what the exact processes are, you will know what to do at any point in time.”
He however, tasked freight companies at the various airport to get the necessary equipment for exports especially having a cold room for Agro products.
Capt. John Okakpu, Managing Director of Abx World, an airfreight company, said that Nigeria policies do not encourage export, that is why exporters would rather go to other countries to export than exporting from Nigeria, adding that to export from Nigeria, exporters would spend almost 32,000 US dollars on tariff and taxes above other competitors from other countries.
According to him, most of the agricultural products found in European countries are Nigerian products with Ghana tags, just because Nigeria exporters go to Ghana to ship them abroad because it is cheaper over there.
“We are mono economy, everything is import and when you look at our policies, it doesn’t encourage export and that is the reason why the airliners, the sea liners, the ocean liners don’t want to carry anything out from here.
“Because you pay so much taxes. Imagine spending 32,000 dollars above your competitors, you can’t compete, the yam that people eat in Europe, American, they say is Ghana yam, they are not Ghana yam, they are from Nigeria, people find a way to take this product to Ghana and export it from there.
“I have a lot of farmers that come to me to help them export their products through Ghana because of all these policies, we have finally identified the problems, we have the solution and we will put it in place.
“There is a lot of issues in respect to government policies, most of those policies needs to be changed, it’s been there for years, people that put those policies some years ago, didn’t see today., he said.
He said that NSC and other agencies of government have been putting document together for the President to sign, stating that in the next few weeks, that will be done.
He added that the other challenges with export, is that they have been too much levies by the government, multiplicity of agencies at the airport and seaport causing delay.
Looking at the causes of low airfreight at Nmandi Azikiwe International Airport in Abuja, Mr Sunday Akintunde, Chairman of the Airfreight Stakeholders Forum (ASF) said that the cost of exporting from Abuja was too high with so much bureaucracy.
According to him, for enabling environment to be created, government needs to review some policies and agencies of government must make export guidelines accessible to exporters.
He attributed the outrageous quarantine tariff under the Ministry of Agriculture as a major factor hampering the exports business.
He noted that the Nigerian Agricultural Quarantine Service (NAQS), is responsible for issuing clearance for agro exports/imports, issuance of certificate for the passage of agricultural plant products into or out of the country.
“The cost of doing business in Abuja is on the high side, customers are complaining as well as the agents.
“We don’t have the enabling environment to make export happen in Nigeria, we need policy makers, and we want the President to know that nothing is happening in freight if we need to diversify our economy.”
However, Mr Lanre Akerekan, from National Association of Government Approved Freight Forwarders (NAGAFF) said that quarantine services charges N5,000 per kilo of any farm produce which was outrageous.
“The major goods that is exported out of Nigeria, majority of them are foodstuffs which is being regulated by quarantine service but their tariff now, one kilo is N5000 and you have a weight of 200kg, if you multiple that N5000 by 200kg how much will it give you?
“The whole 200kg will not cost you more than 20,000 from the market especially in the case of yam, how much will you pay to clear it.
”This alone is one of the major challenges discouraging farmers from going into export business because you will end up paying so much charges without profit,” he said.
Speaking on the challenges of low airfreight in Kano, Alhaji Kazeem Akande, the Chairman of Association of Nigerian Licensed Customs Agents (ANLCA) Kano Chapter decried the high charges by cargo airlines.
According to him, the high export fees have contributed greatly to the low export of agricultural products from the country.
“When you look at the airfreight charges in Kano, it’s so high compared to that of sea and you know when you talk about business, everybody is trying to look at the profit margin he or she is going to make.
“They find it way cheaper by using the sea and I think that is one of the main reasons why they have decided not to use airlines, some exporters who still preferred to transport their goods by air had to go all the way to Lagos in order to avoid the high fees charges by airlines in Kano.
“We have only two cargo flights that operate through the Kano airport; that is the Turkish Cargo and the Ethiopian cargo and there are some routes which some of these airlines don’t like to operate through”
Akande disclosed that efforts were being made by the agency in partnership with the NSC on ways to get more cargo airlines in Kano to reduce the airfreight charges.
Barr. Hassan Bello, the Executive Secretary of Nigerian Shippers Council (NSC) said the summit was organised to meet with stakeholders and identify challenges in the airfreight business.
He said that Nigeria needs to focus on export and stop depending on import stating that exporting agricultural products can generate revenue for both the state and federal government.
“Nigeria is diversifying it economy and one of the ways to diversify the economy is to export, we cannot be import dependent economy for a long time.
“There is a rising demand for Nigeria product like agricultural products especially ginger, Shea butter, many other crops and fruits, which airfreight can be used to export them.
“Why we are having this summit is to identify the problems and to see how Nigeria shippers council, Kano State government with other regulatory agencies will resolve those challenges.”

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