We have the economy and potential to grow, not survive
We have the economy and potential to grow, not survive-Elochukwu
Erudite, fearless and outspoken, Chief Ernest Elochukwu is Member, Board of Trustees of the Association of Nigeria Customs Licensed Agents (ANLCA). The frontline customs broker and business tycoon is also a former National President of ANLCA.
In this exclusive chat with EGUONO ODJEGBA, he cleared the fog that appeared to have forever beclouded the relationship between ALNCA and the National Association of Govt. Approved Freight Forwarders (NAGAFF), accused the Central Bank of Nigeria and Nigeria Customs Service of inhibiting free trade and economic growth.
Elochukwu also not only declared Proffesional Operating Fees (POF) a fraud and illegality, he said lawful steps will be taken to frustrate its collection. Excerpt:
How do you react to subsisting issue of rivalry between ANLCA and NAGAFF, for example issues of who is playing an infinitesimal role in freight forwarding as recently canvassed by Dr. Boniface Aniebonam, founder of NAGAFF.
Well these arguments have been provoked by the unguarded statements credited to the so-called founder of NAGAFF, Chief Boniface Aniebonam. But then we can trace back this rivalry to history. That history is the formation of these associations. Prior to 1990/91 or so, there were associations at various ports, which we can refer to as port based associations. In Port Harcourt, we had Port Harcourt Association of Licensed Customs Agents, registered at the CAC. In Onne we had Association of Licensed Customs Agents; they were based in Aba but operating in Onne. In Lagos there were also associations that were registered. But when ANLCA was resuscitated around that time, there was the need for one strong national voice in the clearing and forwarding arena and that gave rise to the people who resuscitated ANLCA. There was one baba, a Yoruba man…he was one of those who was part of the 1954 formation of the association. So, he did so much in reactivating ANLCA, bringing information and many more for the resuscitation of ANLCA. Everybody saw the need to have one strong national voice, knowing that the business is vast and it is easier to solve issues with one strong national voice. After the resuscitation, Rafiu Ladipo became the president but he did not stay long, maybe because he had interests in football supporters club and all that. So Kamba was brought in and Kamba did so well in making every part of the country feel a part of ANLCA. It is to his credit that those of us in the East have to discard our individual associations to join ANLCA. So ANLCA was quite strong. Somewhere along the line, some persons felt that the strength of ANLCA was been misused by Kamba, because he was seen to be very powerful and these persons started nursing the idea of whittling down both ANLCA and Kamba’s power. That was what led to the formation of NAGAFF. The so-called founder of NAGAFF was an executive member of ANLCA. A lot of incidents happened which is historical. Aniebonam nursed a kind of revolt against kamba and discussed it with some of us, we said no, we cannot destroy the association but can always find a way to make sure that the right things are done. In 1996 or 1997, they were the people that went to court to seek for Kamba’s removal because he had actually overstayed as the National President and appeared to be frustrating any attempt to have a change and succession. So to that extent, yes, they succeeded in doing that, but they did something else that we didn’t accept, going to hold an election not in tandem with the standard of ANLCA. So that election they held at Mobil Pengassus whereby they claimed to have elected Peter Eloka Okocha as president, we rejected it in the East and that led to a lot of crisis that was later resolved and then Okocha came in as acting National President. Eventually an election was held in 1997 and he came in as National President. Between these times we saw Aniebonam trying to play the role of a godfather because he felt he facilitated Okocha becoming president. So, when he saw that ANLCA could not contain him, because ANLCA members from the East could not tolerate such behaviour, with some help outside, especially those who felt ANLCA was getting too strong, they helped him to form NAGAFF, but we don’t have to mention names, but we know them, especially from the other side. So abni tio, the formation of NAGAFF was to counter ANLCA. So long after Kamba had gone, including Okocha and others, that same agenda of countering ANLCA is still the agenda of NAGAFF. So I am not surprised that it is his preoccupation of wanting to continue to sell the failed impression that NAGAFF is more relevant. No discerning observer or stakeholder can in the widest imagination start to compare ANLCA and NAGAFF because one, ANLCA is an association that was formed based on the ideals of an association, which is to project and protect the interests of members. It was formed with mass participation. On the other hand, NAGAFF is a one man empire, it has always been running like that. Nobody should be deceived whether Aniebonam have gone from becoming National President to Chairman to Founder, presently. Everybody knows who calls the shot in NAGAFF. So the question is…I have asked some people, what is an association? Association is coming together of people with a common interest, with a view to protecting that their interest. And those interests are such that individually, they cannot protect it. So in other words nobody owns an association and nobody should be founder in an association. For me those still asking where do ANLCA and NAGAFF stand in the area of cooperation, what is the basis of cooperation? However, it is also good, there were also splinter groups like the National Council of Managing Directors which again was formed by someone who was also an official of ANLCA. Lucky Amiwero was the National Publicity Secretary of ANLCA at the time, 1992/93 or so. He fell out with some of the executives and based and he used the opportunity of mass revocation of licenses in 1996 to form the Council, and then we found it a bit odd because in the Managing Directors of Licensed Customs Agents, he cannot be the only one….if you say Council of Managing Directors, the MD is not the only one operating a company. A company that has say five directors, where do you place the other four directors since only one can be MD. So these semantics can be used to cause deceit, to show that there is something different from one another. I have always asked them, what is the job of your association, and like I have always said, when legality is no longer the issue, morality becomes a burden to be discharged. You know when you want to form an association; there are many questions to be asked, this association you are forming, what is it out to achieve? What interests is it there to protect? Are there already existing associations that is doing that same thing, if so, why form a new one? And like people will say, oh because things are not going well with one, that’s why, no.
Interest is about the job you do, so you find that somehow, those who clamour to form associations seem to be among those who are not active in the job or business. A licensed customs agent that has jobs to do will be more interested in doing his job, if he has issues, he calls on the association to help resolve it. But then, when people don’t have jobs they go form association, to have access to a complimentary card or letter head, to throw himself around. I am so, so, so. So all this talk of playing infinitesimal role or marginal role is poor thinking.
Freight forwarding and customs agents as far as Nigeria is concerned is one and the same thing, and so for anybody who now want to appropriate freight forwarding because it tallies with the name of his clearing association is only an exercise in futility.
ANLCA recently took a position against the 2020 Customs N2trillion revenue target, in the fear that the figure is artificial and may drive up the cost of port business. Do you subscribe to this concern?
First and foremost, it is really a national disgrace that Nigeria appears to be the only country in known history where agencies collecting revenues that are depending on other parameters are given target. Let me explain…we went for a FIATA Conference in Los Angelis sometime ago and when the then Registrar of the CRFFN was giving an address, he mentioned among other things that the job of freight forwarders in Nigeria and by extension the role of CRFFN includes helping customs to meet its revenue target. The whole world stared at us and they were curious to know what revenue target meant. They asked is it that the target now determines how much TEUs, volume of trade that is coming to Nigeria or what? It took certain intervention to let them know that we operate a peculiar economic system just for them to drop the matter. So the question is, this things are supposed to be standardized measures, the duty rate for any item is already there in the tariff, so in other words, the only way volume in terms of revenue can increase is increase in the volume of jobs that are coming in or going out, import and export. Over time the FG has operated this and the customs have gleefully accepted it as a means of keeping their job. So if they meet one target threshold, they are given a higher one, so what they have been given in 2020 will only be to enable them escalate what they have always be doing. In other words, forget about the duty rating, forget about other things, indiscriminately issuing duty demand/demand notices on cargo that is coming to Nigeria without regard to whether it is paying a particular rate of duty. For instance, for an item that is paying five per cent rate of duty and within certain value range, one is not expecting that item to pay the same with the one that is paying 20percent. But you now find that in the Nigerian system you hear things like ‘this duty is not enough..so it is not about duty being correct but that it is not enough. So what it means in essence is that the customs have been given license by the FG to demand for duty according to their thinking, so nothing you pay is ever enough. It is like hunting for money in other to make a target.
Standards no longer suffice; arbitrary duty demand has taken over. So what we are doing actually is primitive practice, whereas, all over the world trade is based on standard rules. The pity of it all is that the government that has given this target is only looking at revenue to be able to fund budget, and this same budget has over 70percent recurrent content, funds used in serving machinery of government, not providing infrastructure that enables the economy to develop. Apart from Customs, FIRS is given revenue target, agencies of government established to regulate standards and safety have also become revenue generator such as SON, NAFDAC etc. How long can we continue to live like this and still hope to be among developing nations?
Overall, do you see the customs revenue target impacting negatively or positively on the national economy?
It is definitely impacting negatively on the economy. Its archaic because it has no modern or economic basis, except that it is supported by an irresponsible system. It has to be changed. Elsewhere, revenue earning is depended on volume of import or export, so there are such other indices that are put into consideration. Was there more trade from which part, containing what? These data is meant for statistics purposes. For instance if more of so, so, so items are brought into the country, in a particular time, it helps to plan…are the items of essential nature, are they of semi manufacturing nature, are they ostentatious in nature, these are the indices that should guide us in planning. If you see more ostentatious items coming in, you can put higher duty to discourage them.
Under this revenue regime, do you think some segment of the economy are struggling
Definitely because what it has brought about is that like I said, no duty is ever enough, so even imports for industrial use, you still see customs officers querying them, these are supposed to be like factors of production, they are not end products. Even raw materials, machineries, they are indiscriminately querying duty on them as not been enough.
Are agents and importers helpless?
Yes, they are helpless; there is nobody to run to seek redress. Protesting is so difficult…first and foremost, you are not even sure it will be resolved in your favour. Even if after all the time wasted it is resolved in your favour, the demurrage that accrued is sickening; it is really a very terrible situation.
CRFFN has said POF is for everybody and not limited to registered members. Can you justify this position?
I have always said that POF is not only a fraud but is an illegality. And it is surprising that the government is aiding fraud and illegality, it is so shocking for me, because everything about POF is an illegality. Act 17 of 2007 that established CRFFN did not make any provision for POF. Some have argued that POF is based on regulation, it is all a lie, there was no such regulation then. I was in the first and second council, there was no such regulation, the only reason…and this is actually the cause of backwardness in this industry, unfortunately, it bleeds my heart that after the efforts that Nigerian Shippers Council made in sponsoring the CRFFN Bill and the enactment of the CRFFN Act with the help of people like us, that over ten years after, in fact this is the twelth year, all that is been talked about in CRFFN is how to make illegal money to share and pay to government instead of talking about how to enforce standards in the industry, which was the major reason for the formation of RCFFN.
But ANLCA your association has endorsed the collection of POF, yes your position on this matter has been unshakably same, but does it not worry you that you stand on a separate page from where the larger interest of your association stands.
I can assure you that the larger ANLCA family do not endorse POF, that the NECOM or even BoT have endorsed POF is not material. What is important is the answer to the question, is POF legal? I have said that it is illegal and fraudulent.
ANLCA was in court over POF, the case hanging when the current leadership withdrew it from court. Where does that effort leave us?
That was also area why I said it is unfortunate, things that are done in Nigeria are often done with hidden motives. You cannot pull the wool on everybody’s eye. Yes ANLCA went to court and at a particular point in time, overtures have been made and the position of ANLCA was that the right thing should be done. All this while we kept talking about POF, it was an idea by the then registrar, Mike Jukwe along with maybe, some officials of ministry of transport with some stakeholders in the industry, it was entirely their creation. And somewhere along the line, some people in the process of seeking what is known in Nigeria as political solution, started saying they should go and gazette it. And they put it in gazette but let’s take for the purposes of argument, that a law was not made by the National Assembly but was concocted by some individuals and gazatted, does it make it a law? That is where we are, and so, when the new leadership of ANLCA came out to say during a NEC meeting that they be allowed to look into it and see how to resolve the matter and that they will report back to the house. Reporting back to members of ANLCA should be in another NEC meeting, because NEC is the highest decision making body. There was no such report. All we heard through grapevine is that the matter has been withdrawn. So was it with the consent of members of ANLCA, is it binding on members? And so that’s why some persons in their individual capacity have gone back to court.
Yes, the matter is right now in court. We are waiting to see how anybody will whether through single window or triple window or whatever it is will come and put that charge as say they want to collect, then we will tell him he cannot. Nigeria should not be run like a lawless country, so whether somebody has endorsed…the essence of leadership is for you to carry out the wish of the majority of your members. Again because we …the initial position of ANLCA was that the governing council which was last constituted in 2011 and it expired in 2012, since 2012 there has been no governing council because the idea was that the governing council was to be the main engine of the CRFFN in tandem with the provision of the Act, because the Act says there shall be a chairman elected from among the freight forwarders, and a vice chairman elected from each zone among the registered freight forwarders and appointees of government. What did you get? We had appointees of government, and then what was supposed to be the election turned out to be a charade, a mockery. Have you seen where someone won a contested position with one vote? And so somebody, somebody has even been put to be representing the Eastern Zone who is an agent in the Western Zone. So within those operating our association, they shared the position, it does not matter how they do with the election. These things were done and they are expecting that some of us will take it that way.
You said the Governing Council was designed to be the engine room of decision making, but the Registrar of CRFFN appears to be the de facto decision maker
As a matter of fact, the Nigerian phenomenon is really baffling and nauseating. You see you will normally expect that government agencies will be steeped in law and order, so a situation where the supervising ministry of transportation could endorse anything that is emanating from the council, from that point the vision of CRFFN failed because at a particular point in time, the then registrar, Mike Jukwe elevated himself to the position equivalent to that of Executive Secretary of the shippers’ Council. And acted in that wise and of course as he was going, the ministry of transportation was following. Even in the present understanding, it is the ministry that appointed the present registrar, yet the provision of the Act says it is the Governing Council that should employ the registrar, because the registrar should be an employee of the council. And the duties of the registrar are spelt out in the Act to keep and maintain the register of freight forwarders and do other things assigned to him. His function is purely administrative and subject to the supervision of the Governing Council. Now he gives directive, because everything now is on arrange basis. In Nigeria we thrive on arrangee, and it is a pity that we expect that we will progress like other countries that are been run normally. The average Nigerian is suffering from the arranggee mentality where we are doing the wrong things and expecting the right answers.
What is your take on the rejuvenation of the Eastern Ports which was started with Hull Blyuth to Maerskline and then Nigerian Ports Authority and diversion of vessels to the area from Lagos
I have always advocated for the maximum use of the ports all over the country. The belief that the Eastern Ports have always been starved of cargo was a failure on the part of government
Government all over the world develops ports in their coastlines, which is a natural gift from God because countries which have large coastlines did not apply for it. All they do is to maximize the benefits. So it is surprising that after spending so much to build the ports, that some ports are been neglected. I say this because Government can through its policies determine ab nitio how cargo will be shared including allocating route to shipping lines. But having let the thing flow on its own whereby cargoes were concentrated in Lagos, and the consequences of congestion and then diversion of cargo vessels, there have been a school of thought that the carriage contract of cargo that says this cargo is going to be landed at so, so, so port, and that should end it, but then even in such instances, there is always provision for diversion, it is just like if passengers have been taken by an aircraft from one airport to another. They get to the landing airport and there are issues, they can’t hang in the air, they will go drop them in the next available airport. So also is cargo diversion due to congestion. But am saying it should not just be about problems cropping up first, government should see to even distribution of cargo to all ports. How can we ensure that every part of the country receives adequate cargo? Because it doesn’t make sense that there is congestion in some while there is draught in others. Because we are not talking about Warri Port for instance now, and you know these things are all interrelated, the cargo stops coming to certain areas, there is always the possibility that it affects the living standard of the people and probably will be the reason why crime soars. The duty of the government is to run the country in such a way that everything is seamless. In our own case we neglect certain areas, problem comes and we start treating the problem as not the product of our negligence because if we have talked about it, maybe the problem would have been avoided. The government should see this period as a wakeup call, even in this days of concession many people use their money bidding for some of these ports. Ordinarily they shouldn’t be the one going to insist cargo should be made available to their port, government should ensure cargo gets there, put rules and regulations down on how cargo are evenly distributed to get to all ports so that investors can recoup their investments and develop the nation.
What about situation where government appears to have hidden under the cover of militancy in the Niger Delta and allowing the ports there to waste away
That too is unfortunate because if we are really running a country selflessly, the issues of criminality or militancy should be given attention that is not superficial. Like I said earlier on, one, the government should concern to it with proper administration because every port in this country is a Nigerian port. It should be interested in seeing business done, if there are problems in any area, government should be thinking of how the problems should be tackled because whether ports in the east, that is ports in Port Harcourt, Onne or calabar or Warri is seen as unsafe, meaning that it is port of Nigeria that is unsafe. If these ports are adjudged unsafe, of course it will overwhelm the ports in Lagos. I don’t want to subscribe to this idea that people played ethnic cards in trying to maybe they are comfortable with the ports in Lagos and decided ‘oh other areas should be starved of operation; I don’t want to believe that.’ I still want to see it as inefficiency and negligence that is present in Nigeria ports administration; it is the same inefficiency and negligence in the other ports.
Would you say criminalities in the ports of the Niger Delta is same criminality that upstream operations in the same Niger Delta suffers, yet activities have continued.
Unfortunately, it is not even that because if you want to know the truth, the downstream and upstream operations should be the one to be most affected by the said militancy. But then if it is not so affected, the issue of cargo ship passage which is a minor in comparison, shouldn’t be because if the same measure that were put in place to ensure that oil and gas exploration is continuing within the same environment, offshore and onshore, and yet, the passage of ship is now such a difficult thing, then something is wrong somewhere, somebody is trying to be economical with the truth.
How would you describe effects of CBN import policies and their implementations by Customs on port trade and the freight business particularly in 2019?
There is no gain saying that the whole problems we see in the port industry in terms of importation and cargo clearance has its root in the faulty policies of CBN. Somewhere along the line, or in fact if you look at it historically, there was a time, virtually everything was banned. Textile, foods, and many things banned, I know what it took some of us agitating, campaigning, for the authorities to take a commonsensical look at some of them again. For instance, in 2007 at the CGC’s Conference in Sokoto, I made an observation to the then minister of finance, Dr. Shamsudeen Usman, I said that since I grew up to know things, textile have always been banned, and incidentally I have made a survey to see how many textile companies that are operating in Nigeria and they were few, the ones in Kano, Kaduna, Aba and Lagos, which specializes in Wax prints. The ordinary ones that people want, the day to day fabrics, few companies were producing them, yet it has always been banned, yet those are the fabrics used in the country, in fact, I made an example that when I was growing up, two people were brought before the magistrate, one a thief, one buyer of stolen goods. That the buyer of stolen goods gets the higher punishment because it is believed that he encourages the thief. So everybody laughed. In this case now, we are talking about smugglers. But all of us, during festivities want the best materials for our family, and yet these are smuggled. So it means that if the law I gave example of is to apply, it is not the smuggler that is guiltier than Nigerian people. Then a situation where the entire people and country is wrong, then there is something we need to check, we need to know whether something is right with the laws and policies. Now recently, when some of these policies had been relaxed, the CBN again came up with a list of 41 items which they said they cannot fund with the forex. It is clear, since CBN cannot fund the items with available forex, should not be that they are banned, because it is only be lawful process you say these things are banned, and everybody knows they are banned. But CBN said they are not banned, but that you cannot provide the forex, it means that should anybody have any means of getting the required forex to bring them in, then they should. But what happened, the CBN stopped opening Form M on those items, and when they stopped opening Form M on the items…it is almost like saying they are now banned. These are essential things that are of everyday use, and so the traders still try to go and bring them because they are not banned officially. Because you have to use documentation to be able to bring them in without which maybe the economy would have grounded to a halt. And so when these things are brought in, Customs comes up with wrong declaration and all that. So I can tell you that the CBN policies, especially of the issues of the 41 banned items have been our major problems. Because if they weren’t doing that, assuming those who have the forex to bring them in are availed Form M, nobody will complain, and these are essential items.
What is your projection for the current fiscal year 2020?
Everything is repeating itself that has been done, but somehow we have always survived. God has provided us with everything we need for progress and growth; it is our refusal to doing the right things that has pushed us to the point of merely surviving instead of making progress. So we will continue to survive, as to growth, real growth and progress, I don’t see it coming under this regime until we do things right.