Business

POF: Non-compliance dips CRFFN’s revenue by 95%

The Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) is currently collecting less than five per cent of its revenue target due to non-compliance by the freight forwarders it was directed to regulate, BAYO AKOMOLAFE reports

Non-compliance by freight forwarders to the payment of Practitioners Operating Fee (POF) has made the monthly revenue target of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) to shrink by 95 per cent. In January 2020, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, gave the approval through the Director, Home Finance, Okokon Udo, to CRFFN that all cargoes exiting the port must pay N1,000 on every imported 20-feet container and 2,000 per 40-feet container. The approval further stated that the receipt of payment of POF must be presented before cargoes exit the ports. The move was initiated to enable the Council achieve its mandate of revenue collection. Prior to this development, there had been disagreement among customs agents, freight forwarders and the Council over payment of Professional Operating Fee in the port industry. For instance, while the council said that the payment of POF would help Nigeria to build real capacity for effective participation in the African Continental Free Trade Agreement (Af- CFTA), the Association of National License Customs Agents (ANLCA) complained that the fee would increase the cost of doing business.

Lamentation

Lamenting the non-compliance to the payment, the Registrar of CRFFN, Samuel Nwakohu, said that the annual projection of the Council was N5 billion in a year, saying that presently, the Council was collecting bellow N2 million per day. The council is expected to generate N13.7 million daily. However, the registrar said that the amount being collected was very small. He said: “Compliance is still very low. If you look at the projection that we have, it is about N5 billion a year, but presently on the average, we get less than N2 million daily. “It is going to be tough. But I believe that the more the terminal operators begin to enforce, the better. “The fact with the terminal operators is that when they all start enforcing, the level of compliance will go up considerably, because right now, it is less than five per cent. “We have achieved less than five per cent of our projected revenue, which is poor. But the good thing is that we have started.” The registrar noted that if the terminal operators begin enforcement compliance, the level of freight forwarders’ compliance would increase.

The fee

When the fee was first introduced in 2015, the charges approved by the Council included N1.50 per kilogramme for air cargo, N1,000 per 20-foot container, N2,000 per 40-foot container, N500 per car/suv, N1,000 per truck or 20-foot equivalent, N2,000 per truck or 40-foot equivalent, N3.50 per tonne for general cargo and N1,000 per tonne for dry bulk cargo.

Approval

However, the council finally secured approval from the Federal Government to commence the collection of the fees in all Nigerian seaports, airports and border stations last year. At the 2022 budget defence by the Minister of Transportation, Rotimi Amaechi, last week, the Senate and House of Representatives Joint Committee on Land and Marine Transport charged the minister to prioritise collection of the fee from CRFFN. The joint committee said that the Federal Government was expecting CRFFN, one of the agencies under the ministry, to rake in as much as N10 billion annually from the imposition of POF on Nigerian shippers. The Chairman of the joint budget committee, who is also the Chairman of Senate Committee on Marine Transport, Senator Danjuma Goje, said during the budget defence by the minister, that eyes would be on the revenue due from CRFFN. It would be recalled that Nwakohu had explained in Lagos at a stakeholder’s sensitisation that the Council had applied to the finance ministry to make payment of POF a condition precedent to exit of cargoes at any of the ports and border posts, stressing that the directive had equally been communicated to relevant agencies, including Nigerian Ports Authority (NPA), Nigeria Customs Service (NCS), terminal operators, Nigerian Civil Aviation Authority (NCAA) among others. Nwakohu said: “The Federal Executive Council (FEC) gave the approval for the commencement of POF. “We also had to put ourselves together and we have held several meetings with leadership of the various associations; we have explained all to them.”

Procedure

To pay for POF, the Council said that applicant must be an existing and registered freight forwarder with his membership number, adding that such a freight forwarder must have completed up to date payment of all subscription dues and must not be indebted to CRFFN in any way.

Last line

There is the need by government to set standard, build capacity, regulate freight forwarding practice before enforcing revenue collection from the stakeholders.

 

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