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Challenges Of Destination Inspection

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Destination Inspectors in Nigerian Ports, otherwise known as Service Providers like the SGS and other risk management and scanning service providers are faced with a lot of challenges in the course of their service delivery.
These challenges which are manifested on the day to day running of their businesses at the nation’s port ranges from Risk Assessment Report (RAR)/Risk Management and price verification and classification of information to cargo scanners and scanning services, as well as training courses and complete handover to the Nigerian Custom Service (NCS).
The aim of the Destination Inspection Policy of the Federal Government was primarily to strengthen the capacity of the Nigerian Customs Service (NCS) by replacing pre-shipment inspection in exporting countries with inspection on arrival in Nigeria using the latest technology tools.
This objective was envisioned to take care of notable irregularities which had characterised the Nigerian Maritime business as the case may be.
Other reasons for the destination inspection include the facilitation of trade through risk management and the use of non-intrusive inspection (x-ray scanning) of selected imports prior to Customs clearances thereby minimising the need for physical examination, as well as to enhance regulatory compliance and collection of import duties/taxes.
In a move to meet the objectives, the Federal Government engaged the services of some service providers like the SGS scanners to assist NCS with the implementation of the Destination Inspection Service (DI).
The three service providers commissioned for the job are SGS, Global Scan and Cotecna, and the function of the service providers are splited into three: port/point of arrival and entry into Nigeria.
SGS zone covers the Port Harcourt main port and airport, Onne Port, Idiroko border post, and the Ilorin International Airport.
Other service providers like the Global Scan covers Calabar Port, Warri, Lagos Airport, and Service Border Area, while the Cotecna canner covers the Apapa Port, Tincan Island Port, Abuja Airport, Kano Airport, as well as the Jibiya and Banki border posts.
In an effort to meet up the stated objectives in their zone, the SGS on their part has said that it has provided both classroom and on the job training for NCS, in all Destination Inspection (DI) aspects, to enable them complete the handover process to NCS at the end of the contract.
Like other service providers might have done, the SGS also said that it has deployed a Risk Management System and X-ray Cargo Scanning Machines to facilitate trade, which have minimised need for physical inspection.
This has also helped to identify suspected containers with contraband goods thereby enhancing the clearance of cargoes as well as reducing the delay caused by physical inspection.
The Managing Director of SGS, Mr Nigel Balchin who dropped the hint when the House of Representative Committee on Customs visited Port Harcourt recently, also posited that the interlink between the service providers system and NCS ASYCUDA system, which is the electronic Customs (e-Customs) and Direct Trade Input (DTI) introduction has helped in compliance and proper accountability.
The ASYCUDA (e-CUSTOMS) which was implemented at Onne Port in November 2007, was later implemented in Port Harcourt in June 2009, which has facilitated documentation/transactions.
Inspite of this progress recorded by SGS, there are other issues that have impeded the smooth sail of the DI activities which have translated to delay in cargo clearing process.
Transmission of documents to service provider(s) is one of such challenges in the DI operations. The guideline requires that Form “M” and other final shipping documents must be received from the bank in Lagos.
The guideline for DI also requires that duly completed and approved form “M” should be submitted to the office of the respective scanning and Risk Service Provider in Lagos not later than five working days after the approval.
According to SGS, this policy has placed importers, particularly those at Eastern ports at a disadvantage as the form “M” application is still in hard copy and has to be sent by courier by the importer’s local bank branch to the bank’s head office in Lagos for approval.
From the SGS presentations, an importer who completes and submits Form “M” in Port Harcourt to his bank, the form has to go by courier to the bank’s office in Lagos, who also will in turn send this document to SGS office in Lagos, which may take up to three days before getting to SGS.
By estimate, a document returned for submission will take six days on the journey, and this will result to delay in cargo clearing process.
Transmission of copies of Risk Assessment Report (RAR) to importees has posed big challenge to service provider like the SGS.
Making a presentation at the seminar organised by maritime reporters in Port Harcourt, Mr Oyebode Joseph of SGS stated that the issue of sending RAR in hard copy to head offices of banks has posed challenges to quick service delivery.
He said RAR contains vital information about the value, and classification for the guidance of NCS to facilitate the final determination for clearing.
According to Mr Joseph, experience has shown that cargoes are not normally presented for scanning by the clearing agents on time. This puts pressure on the scanning operators to cope with the rush at closing time.
The possibility of training Customs officers that will man the scanning and e-Customs services is another challenge facing SGS and other DI contractors before the end to their contract period.
Apart from operating, the maintenance is also vital as well as getting acquainted with the latest technology on scanning and ASYCUDA, before termination of contract.
For the 48 hours cargo clearing process to be effective, the processes of documentation and inspection which have posed challenges to service providers have to be addressed.
As part of solutions to the challenges, Mr Oyebode of SGS has stated that the Central Bank of Nigeria (CBN) is rolling an electronic Form “M” project in the near future and this will assist importers outside Lagos.
Also, SGS is positioning to begin to send copies of RAR by e-mail to bank branches that opened the Form “M”.
On the delay on presenting cargo for scanning, clearing agents are being encouraged to make use of the mornings when cargoes can be cleared without delays so as to leave the port in good time.
Also, the SGS has maintained that it will adopt the train the trainer method for Customs officers, who will in turn train others, and this will be done in batches.
When these challenges are taken care of then cargo clearing process could be easier, and there is hope that 48 hour clearing will be achievable, even outside the Lagos ports environs.

Corlins Walter

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FG, States, LGAs Share N736.782bn In Oct

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The Federation Account Allocation Committee (FAAC) has disbursed N736.782 billion from October 2022 Federation Account Revenue to the Federal Government, States and Local Government Councils.
This amount was augmented by an additional N70 billion distributed to the three tiers of government.
Federal Government received N36.876 billion, States got N18.704 billion, Local Government Councils received N14.420 billion.
An extra N30 billion Augmentation was made from non-oil revenue and distributed, with Federal Government getting N15.804 billion, States getting N8.016 billion, and Local Government Councils getting N6.180 billion.
According to the communiqué at the end of the FAAC, at the meeting for November 2022, the N736.782 billion total distributable revenue was made up of N417.724 billion distributable statutory revenue; N213.283 billion Value Added Tax (VAT) revenue; N5.775 billion Exchange Gain revenue.
In October 2022, the total deductions for cost of collection amounted to N33.555 billion and total deductions for transfers, savings and refunds was N186.749 billion.
The balance in the Excess Crude Account (ECA) still remains at $472,513.64.
The communiqué confirmed that from the total distributable revenue of N736.782 billion, the Federal Government received N293.955 billion, the State Governments received N239.512 billion and the Local Government Councils received N177.086 billion.
The total sum of N26.228 billion was shared to the relevant States as 13 percent derivation revenue.
Gross statutory revenue of N622.270 billion was received for the month of October 2022. This was lower than the sum of N825.710 billion received in the previous month by N203.440 billion.
From the N417.724 billion distributable statutory revenue, the Federal Government received N206.576 billion, the State Governments received N104.778 billion and the Local Government Councils received N80.779 billion. The sum of N25.591 billion was shared to the relevant States as 13 percent derivation revenue.
For the month of October 2022, the gross revenue available from the Value Added Tax (VAT) was N229.041 billion. This was higher than the N203.960 billion available in the month of September 2022 by N25.081billion.
The Federal Government received N31.992 billion, the State Governments received N106.642 billion and the Local Government Councils received N74.649 billion from the N213.283 billion distributable Value Added Tax (VAT) revenue.
The N5.775 billion from the Exchange Gain revenue was distributed as follows: the Federal Government received N2.707 billion, the State Governments received N1.373 billion, the Local Government Councils received N1.058 billion and the relevant States received N0.637 billion as 13 percent derivation revenue.
According to the Communiqué, in the month of October 2022, Value Added Tax (VAT) and Companies Income Tax (CIT) increased significantly while oil and gas royalties, Petroleum Profit Tax (PPT) and Import Duty recorded considerable decreases.

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$1bn Looted Funds Recovered Since 2015 – Malami

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Nigeria’s Attorney-General and Minister of Justice, Abubakar Malami, has revealed that the current administration has so far recovered about $1 billion looted funds till date.
Malami disclosed this while briefing State House Correspondents after the week’s Federal Executive Council (FEC) meeting presided over by President Buhari at the Presidential Villa, Abuja.
He also disclosed that Council has approved a new Anti-corruption Strategy Document to strengthen anti-graft campaigns in the country.
He said the recovered assets had been deployed to various sectors of the economy, including poverty alleviation.
Malami also expressed government’s concern over cases of budget padding, which he described as worrisome, noting that every necessary measure would be explored to address it.
Minister of Humanitarian Affairs, Disaster Management and Social Development, Hajiya Sadiya Umar Farouq, had blamed the Minister of Finance, Budget and National Planning, Zainab Ahmed, for adding N206bn to the Humanitarian Affairs Ministry’s budget.

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Nigeria Loses $2bn To Oil Theft In Eight Months 

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The ad-hoc committee set up by the Senate to investigate oil theft and consequent damage on the nation’s economy has said Nigeria lost   $2 billion (an equivalent of N1.3trillion) to oil theft between January and August this year.
The committee’s report, which was adopted by the Senate in plenary on Tuesday, made far-reaching recommendations for stemming the tide.
It, however, failed to name a single person or corporate entity carrying out the oil theft.
In one of its findings, the committee said, “Nigeria lost over $2bn to oil theft between January and August 2022, with consequent loss of revenue that would support the country’s fiscal deficits and budget implementation.”
The report indicated concerted efforts being made against the crime by all stakeholders, saying that they had started yielding results, with Forcados Terminal now producing 500,000 barrels per day as against zero production in the first six months of the year.
“Bonny Terminals was also producing 87,000 barrels of oil per day now as against zero production a couple of months ago due to activities of economic saboteurs”, the report stated.
The 16-point recommendations of the committee as adopted by the Senate stated in part: “ the Nigerian National Petroleum Company Limited should stop undermining Nigerian Upstream Petroleum Regulatory Commission and Nigerian Midstream and  Downstream  Petroleum Regulatory Authority from performing their functions.
“The provisions of the Petroleum Industry Act should be adhered to by NNPCL as regards functions of the established agencies.”
The report called for an immediate streamlining of agencies present at the terminals in line with the relevance of their PIA-delineated upstream and midstream/downstream statutory functions.
According to the report, the NUPRC should fast-track the upgrade of the National Production Monitoring Systems to enable real-time monitoring of flow station and terminal activities.
The NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for the detection and mitigation of illegal movement of vessels to ensure adequate revenue generation and optimal crude oil production, it stated further.
It continued that the Bureau of Public Procurement should expedite all processes of procurement for NUPRC to ensure immediate deployment of an online real-time monitoring system by the commission across all upstream oil and gas production platforms for accuracy in measuring production volume by producers.
The report further said the NUPRC should resume full regulatory oversight of all existing crude oil terminals in Nigeria, including integrated ones, crude oil pipelines, issuance of loading clearance, and processing of export permits in line with section 8(d) of the PIA, as regulatory activities at crude oil terminals are interdependent and contingent.
It also faulted what it called undue interference of the Minister of State in the operations of NUPRC as shown with letters made available to it by the agency, stressing that both the minister and NNPCL should allow PIA to function.
“The PIA as signed into law by the President, must be allowed to function by all stakeholders in the sector as an amendment on it now, will send wrong signals to the International community”, it stated.
Recall that the Senate on April 14, 2022, constituted a 13- member Ad – Hoc Committee on Oil Lifting, Theft, and the impact on Petroleum Production and Oil Revenues under the chairmanship of Senator Akpan Bassey, who is also the chairman, of the Senate Committee on Petroleum ( Upstream).

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