Business

Revenue generation: Regulatory council faces govt challenge

Crisis ridden Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) has been tasked by the National Assembly to bring money from the seaports to government coffer in order to justify its establishment, BAYO AKOMOLAFE reports

Six years after resistance, criticism and litigation by port stakeholders, the Senate and House of Representatives Joint Committees on Land and Marine Transport have compelled the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) to generate at least N10 billion from the port into government’s coffer.

Issue

Before now, there had been disagreement among Customs agents, freight forwarders and CRFFN over payment of Professional Operating Fee (OPS) 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 Area (AfCFTA), the Chairman of National Association of Government Approved Freight Forwarders (NAGAFF), Apapa chapter, Mr. Ndubuisi Uzoegbo, differed that instead of the POF collection, CRFFN should rather focus on the numerous challenges confronting stakeholders in the freight forwarding sector. He added that freight forwarders had no interest in the POF collection at this time, adding that there were pending litigations against the CRFFN over POF. Prior to the latest development, ANLCA had complained that the fee would increase the cost of doing business and that the collection of the fee by the Council would amount to violation of an order of a Federal High Court sitting in Lagos, which had directed that status quo be maintained pending determination of a case instituted by the association.

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 Practitioners Operations Fees (POF) 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 Committees on Land and Marine Transport charged the Minister of Transportation, Rotimi Amaechi, to prioritise collection of the Practitioners Operating Fee (POF) from CRFFN. The joint committees said that the Federal Government was expecting CRFFN, one of the agencies under the ministry, to rake in as much as N10 billion yearly 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 defense by the minister that eyes would be on the revenue due from CRFFN. At the budget defence, it was gathered that neither the chairman nor any of the committee members said anything about the trouble the collection of POF was posing as they made no pretence to knowing that there have been issues. For instance, Goje said that the committee would continue to extend all the support needed for the maritime sector to boost its revenue generation and increase its remittances into the federation account through the collected revenue. He noted: “The bottom line is that government needs more money and this agency under the Ministry of Transportation is the key revenue generating agency. I want to urge you to double your efforts; we are going to ensure that you increase your revenue generating efforts so as to bring more money into the federation account.” It would be recalled that the Minister of Finance, Budget and National Planning, Zainab Ahmed, gave the approval in January 2020, through the Director, Home Finance, Okokon Udo, saying that all cargoes exiting the port would pay N1,000 on every imported 20-feet container and 2,000 per 40-feet container.

Trap

he approval further stated that the receipt of payment of POF must be presented before cargoes exit the ports. It would be recalled that the Registrar of CRFFN, Samuel Nwakohu, explained in Lagos at a stakeholder’s sensitisation that the Federal Executive Council (FEC) and the Ministry of Transportation had given approval that the collection of the money should commence. The registrar explained 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) and all other relevant agencies. 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 be up to date in the payment of all subscription dues and must not be indebted to CRFFN in any way.

Power

Nevertheless, Nwakohu said that POF had become a law, saying his duty was to enforce it. According to him, CRFFN had the mandate to set standard, build capacity, regulate freight forwarding practice and generate revenue for the government.

Last line

Government should prioritise the ease of doing business at the seaports before imposing additional burden that will affect Nigerians.

 

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