Nigerian Shippers - The Challenges of Clearing

As Nigeria, a country with huge trade volumes contemplates adopting the single window (SW) platform for cargo clearance, experts have identified it as the solution government needs to eliminate sharp practices, revenue leakages and boost the nation’s march towards full compliance with international best practices.

 

Two major challenges have been identified to cause a setback to Nigeria’s adoption of a single window platform for cargo clearance-lack of transparency and inadequate infrastructure. But experts say if the country adopts the SW platform, which is a tool for simplifying cargo clearance processes and eliminating unnecessary bottlenecks, it will result in surge in economic growth.

Transparency is still a luxury agencies of government cannot afford willingly and since the SW works effectively on it, different strategies will be used to frustrate its adoption in the country. Infrastructural challenge will also threaten the system once it ensures fast clearance of cargoes from the port, which may clog the deplorable roads network.

Meanwhile the Nigeria Customs Service is still battling to fully automate its systems and procedures. In spite the destination inspection regime, it still carries out 100 percent examination on more than 80 percent cargoes at the seaports, airports and land borders. This has effectively rendered scanning operations redundant, operating at less than 10 percent capacity utilization according to industry sources.

Inability of customs to reduce the human element in cargo clearance, a booster for sharp practices currently the hallmark in the ports, is what has also been identified as a challenge to adopting the SW platform. Revenue leakages in the system going to the individual pockets will now go to government coffers.

For Valentino Mintah, a Ghana born British citizen who spoke during a workshop organized by Nigeria Customs Service on single window, she noted that with Nigeria’s sheer size and strategic position, Single Window platform for cargo clearing is the elixir needed to move the country forward. It would significantly remove the human touch points, by which the manual processes have been used to encourage some amount of leakages.

“Those who want to serve the nation in the most transparent manners would find it a great environment. But for those who may have something to hide, the SW may pose an issue to them.” She said.

According to Mintah, SW is for creating an enabling effective environment for importers, exporters and agencies that are involved in international trade to make a simple, fast and cost effective choice, in the course of moving their goods from one country, across the border into another country

She said the implementation of the SW platform will not involve the surrendering of some degrees of relevant agencies autonomy or independence as being speculated, stressing that there would in fact, be no power loss.

All that would happen, according to her, is that there would be need by all agencies involved in trade facilitation to increase their level of transparency. At the moment, there may not be need yet, for such a high level of transparency. At that point, there may have to be a higher demand for transparency, collaboration and information sharing (exchange) so that traders could have a full grasp of control of what they are doing, as they would become better informed especially in terms of how long and how much it could take or cost them to complete their documentation and move their goods.

“It is going to simplify the clearing process by effectively automating them. But the SW is not going to take away anybody’s mandate, powers or control.

She also observed that the cost of initiating the measure was minimal once the right model was identified and chosen. The authorities could either go for a purely Public Private Partnership (PPP) model, a Build, Operate and Transfer (BOT), donor model or a combination of the options, so as to ensure that the country begins to enjoy its widespread benefits on time. She added that it was good that the legal environment in Nigeria allows a PPP; which could be one of the most cost effective options.

The SW, she notes, is a policy that would benefit everyone; from the man on the street, right up to the government. And that is why a lot is dependent on the issue of having a true understanding of what the whole concept is all about. That is the main challenge.

Once this is understood, and responsibilities are understood, there can be good start. However, not all the stakeholders might be equally informed or enlightened on day one; so that means, there must also be a program for sensitization, while the real program is running, she said.

Mintah posited that special efforts could be adopted to let everyone understand SW as a national agenda, and that it is a program that would benefit everyone, beginning from the decision makers to the importers and exporters and the agencies that support them in the international trade, alongside the private sector stakeholders, as well as the consumers who utilize the goods or services within the whole economy.

“Every aspect of the program is a challenge. Moving cargo from point ‘A’ to ‘B’ would no doubt involve documents processing as probably not being practiced before. But you also have to move the goods back and forth in the ports, which means you must equally talk of infrastructures too. And since you will have to move your goods on the road; when it leaves the ports; that in itself also takes you to the issue of not only road, but also your rail, and your river ports where available, etc. so, the SW is essentially all about infrastructures.

“The country is also going to need enhanced telecommunications (IT), which would enable the documents I spoke on earlier move freely from place to place.

“So, once we are looking at the SW implementation, there must also be another group who would be looking simultaneously at the infrastructural challenges on ground; with the aim of tackling such problems, which may include the reduction of illegal bottlenecks on the roads.

“There would be no point in achieving all the benefits that come with being able to clear the goods in 24 hours, if you cannot take them to your warehouse on time because the roads were now blocked as a result of so many containers having to leave the ports simultaneously.”

This, according to her, means that SW must be seen as a trade facilitation measure, which must run towards achieving a nation’s overall cargo facilitation agenda. In other words, there must be a national road-map, as well as a SW road-map, to ensure a holistic efficiency of the ports’ system.

SW, she added, is a vital measure which is highly needed, if Nigeria actually wanted a surge in the dreams of a national economic growth.”

On the one-stop investment shop (OSIS) arrangement presently put in place by the Ministry of Trade and Investment, she described it as a great initiative, though it could not be extended to the realm of international trade.

The SW is the tool for handling international trade. So, it is for buying or selling goods; paying and shipping the goods, as well as clearing the goods, she stated.

“Now, if you look back at an importer or an exporter, you would find that they would have gone through a number of processes, which may include the process of registering a business name, then registering a particular business of interest; opening a bank account, obtaining a Tax Identification Number (TIN) and every other regulatory document that are needed to help them set up as a business entity. That is where the one stop shop idea, at the domestic level, comes in. I believe that the OSIS idea in itself is a great initiative.

“But, a holistic approach would take you beyond that, in case you actually want to either import or export. So, what would they need to make life easier for them?

“That means that after registering my business through the OSIS guidelines, I could thereafter, through a seamless processes link up to the SW regime without first coming out of the OSIS platform, to continue my vision in business on the international trade environment, as either an importer or exporter. The system should be able to store my vital information (data) and also be able to pass them accurately and timely to all other stakeholders or Government agencies that might equally need them.”

In the long run, she said, the SW would actually enable the government to also entrench an overall e-government administration strategy, where the citizens’ interest is being looked at from the cradle to the grave.

“The SW would also be a great environment to compliant traders. But it may not provide a hiding place for those who may want to indulge in sharp practices. Obviously, while the SW may however not solve all problems, it would go a long way in creating a highly effective environment for importers, exporters and other operators to rapidly grow the country’s economy” she highlighted, debunking the notion that its implementation could in any way further increase the cost of running business in the ports.

“The SW also takes away a lot of cost, uncertainty, un-predictability and unnecessary stress because from your smart phones, you can access how far your documents have gone.