...Stakeholders say rise in transport cost impacts regional trade volumes
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He stated this at the 18th Roundtable of Managing
Directors/Exhibition of the Port Management Association of West and Central
Africa (PMAWCA) hosted by the Nigerian Ports Authority (NPA) in Lagos.
Adeniyi spoke on the topic: “What does the AfCFTA offer to
African Ports after three years of implementation.”
He said unfortunately, the free trade area is poised to
usher in significant changes that will have a profound impact on customs
operations, which is the shift in customs’ focus, moving from the import side
to the export side of trade facilitation.
Adeniyi said this adjustment presents a crucial trade-off
between revenue collection and trade facilitation, adding that Customs will
need to strategically allocate resources to enhance export procedures and
ensure that exporters can thrive in a streamlined environment that ultimately
benefits the government through increased foreign exchange earnings.
“While this shift is poised to bolster exports, it may lead
to a trade-off in terms of lower revenue from the import side. Port preferences
favoring the most efficient and infrastructurally sound ports may lead to lower
import volumes and consequently reduce revenue for customs.
“In this regard, the service has implemented a number of
adjustments to cope with these implications. These measures include efforts to
mitigate some non-tariff barriers as we delve into customs’ strategic response
to these multifaceted challenges. It is clear that a delicate balance between
revenue generation and facilitation of trade is at the forefront of our
efforts,” he said.
The customs boss also stated that the implications of AfCFTA
are multifaceted, encompassing the shift of origin control, separation of
certification from regular procedures and the creation of an African
continental free trade portal.
“Let me quickly jump to some of the implications of free
trade area, customs, and the maritime industry. These implications include the
following: After we prompt the need to shift origin control from the import
side to the export side, verification of origin status before export
operations, we enhance predictability for business and customs while ensuring
that only qualifying groups participate in the agreement.
“Secondly, after we prompt the separation of certification
from regular procedure, certifications and associated verifications should now
occur before export clearance, streamlining processes, and ensuring that only
eligible goods receive necessary documentation. Third, the agreement entails
the creation of an African continental free trade portal that should serve as a
central source of information for tariff and origin certification. This portal
will be crucial in providing real-time accessible information to customs, the
maritime industry, and traders. There are a couple of other implications,” he
said.
The Customs boss said in response to a number of the
challenges, the NCS has adopted a combination of operational and procedural
adjustments, administrative collaborations, technological advancement and
measures to mitigate the long tariff barrier.
He said notably among the initiatives include transforming
Nigeria into Africa’s most efficient trading nation, addressing the
longstanding issue of port congestion and enforcing the presidential directive
for the 48-hour clearance of goods at sea ports in accordance with Executive
Order 001.
He said customs is redefining performance measures for key
government agencies to emphasise trade facilitation, implement the National
Single Window Trading Platform, and launching a comprehensive transformational
programme to support exports development.
The Chief Executive Officer of the Namibia Port Authority,
Andrew Kanime, said a 10 per cent increase in transport cost reduces volumes of
trade by as much as 20 per cent and the competitiveness of Africa on the global
market.
He stressed on the harmonisation of activities and policies,
which relate to transportation, logistics, operational corridors, ports, and
harbors.
Kanime said Africa’s core competitiveness globally is often
better attributed to the quality of institutions, infrastructure, macroeconomic
policies, education and technological innovation.
He said the persistent infrastructure deficits and trade
barriers are a failure of production, regionalisation and facilitation of the
smooth movement and interchange of goods across networks.
He said this obviously calls for the development of suitable
and efficient infrastructure systems, as well as harmonisation of trade
policies to eliminate these barriers and catalyse intra-Africa trade and
growth.
The Executive Secretary, National Action Committee on
AfCFTA, Olusegun Awolowo, said AfCFTA represents a good opportunity to harness
and leverage the vast potential of the blue economy within the ports and
maritime sector.
Awolowo said the AfCFTA is the biggest thing the African
Union and leaders have come up with for the continent with zero tariffs on
imports from Africa into Nigeria.
He said it is a market of 1.2 billion people and has a
combined Gross Domestic Product (GDP) of some $3 trillion, adding that the NCS
has realised that revenue is going to fall short when the continent starts full
implementation with no duty payment.
Awolowo said 16 per cent of Africa participates in global
trade, which is the lowest trading bloc in the world, adding that this is why
the trade facilitation process is very important for the customs service,
especially with borderless trade through e-commerce.
He said the Afreximbank is introducing the Pan-African
Payment and Settlement System that will allow countries to pay for goods in
their currency wherever country they export to.
He said over the next three years, AfCFTA can further boost
the blue economy by promoting sustainable practices, in fishing, aquaculture,
maritime transport and resource management for the overall development of
African nations.
Awolowo recommended that for the positioning of the West and
Central Africa as a hub, there must be investment in infrastructure, including
terminal modernisation, closer collaboration among the countries to align their
standards and regulations.
He said this is to minimize non-trade barriers and ensure a
consistent and smooth operational environment for businesses in the maritime
sector.