Non-pre-shipment Inspection: Sub-standard Products Flood Nigeria Markets

BY VICTOR BUORO, ABUJA – A peep into the nation’s port management and pre-shipment management has exposed the inefficiency and abuses the Nigerian security has been open to at the expense of the nation.

The development has so badly affected the nation’s steel industry just as smugglers are having an unfettered leverage in bringing all manners of goods into the country.

Worse still, is the seeming display of lack of concern by stakeholders who watch while all manners of arms and ammunitions are being smuggled into the nation with the aim of jeopardising the 2019 general elections. The development has led to a high proliferation of various arms and ammunitions into the country.

Checks carried out by Forefront News in Lagos, Onne, Port Harcourt and Calabar ports, showed leaking holes in national security thus the need for a closer collaboration to put a stop and close revenue losses, threat on economic activities and more importantly, the health of Nigerians.

Economic violence on the nation: A further check indicates that smuggled substandard steel products are being freely traded in most markets in Nigeria while agencies like the Nigeria Custom Service, Standards Organisation of Nigeria (SON), Presidential Committee on Trade Malpractices and Department of State Service (DSS) amongst others have shown the inability to effectively check such unwholesome practices as it appears that intelligence gathering remains low thereby denying the Federal Government the required reports.

Findings by Forefront News indicate that given the dangers of the smuggling of steel products, the Federal Government would need to act fast in enforcing investors protective policies that will put a stop to the activities of economic saboteurs. This is just as it was gathered that the Federal Government loses over N52billion yearly as revenue from the cancellation of pre-shipment inspection. A dependable security source told Forefront News that on a weekly basis, an excess of N1billion is lost to saboteurs following the volume of what is imported into the country for which fees were to be paid despite the low quality of what is imported.

It was also gathered that the revenue loss is perpetuated owing to the neglect of pre-inspection of containers coming into the country which was hither-to the practice before the coming of the Buhari administration.

Economic sabotage:

Another dependable source who does not want his name in print for obvious reasons said; “it is no gainsaying that the smuggled substandard steel products compete not neck to neck but better in comparison with the locally produced qualitative steel products in Nigeria owing to the fact that they are quite cheaper than the locally produced. When you add what we put into production, we are already victimised. 

GISMA, a body under the Manufacturers Association of Nigeria (MAN), said it has been battling with dismal economic sabotage which may lead to the collapse of up to 60 per cent of manufacturers in the production of galvanised Iron and Steel Manufacturing Companies in Nigeria.

The organisation explained that it may also resort to a mass lay-off of more than 50,000 direct employees and crystallisation of numerous associated systemic risks in the Nigerian Steel Industry in a country where unemployment is already on the high side and therefore pleaded with the presidency to immediately rescue the Nigerian steel industry from imminent collapse owing to the illegal activities of the cabal involved in the smuggling of steel products.

Findings:

There is a cartel of economic saboteurs who import huge volume of containers every week valued at over $5m which are never captured under the correct HS code 7210.30.00.00 – 7210.50.00.00 of Nigerian Customs Service portal, thereby making the Federal Government of Nigeria to lose an estimated revenue of about N1billion as a result of the neglect of pre-inspection of containers coming into the country as against former practice in the country.

It has also been proven and verified by different sources that major routes of smuggling steel products particularly the galvanised and coloured corrugated roofing sheet into Nigeria are Port Harcourt, Onne and Calabar ports and efforts to stop these economic sabotage has proved abortive over the years.

The question then remains if the Federal Government and all its agencies are not aware of the massive economic sabotage? This is the question that is yet to be answered.

GISMA and the fear of attack: “The Galvanised Iron and Steel Manufacturing Companies have demonstrated absolute confidence in the Nigerian economy as evidenced by the establishment of verifiable mega steel mills in Nigeria. These are apart from the ones in Oshogbo (Osun State), Aladja (Delta State) and Ajaokuta (Kogi State).

A major player in the industry who crave anonymity said; “we have also demonstrated our trust in the Federal Government’s policy of Economic Growth and Recovery Plan via investments in various projects to enable import substitution for products.”

He bemoaned that in spite of the efforts of GISMA to ensure full achievement of the Federal Government’s strategic objectives of Economic Growth and Recovery Plan with key focus on global competitive economy, employment generation, youth empowerment and improved human capital development, the market is continually recording free flow of smuggled substandard steel products and other allied products.”

It further said that it was apt to note that the thickness and coating quality of all the smuggled roofing sheets are very much below the standard specified by Standards Organisation of Nigeria (SON) for the Nigerian manufacturers, thereby short changing the Nigerian users as the imported products are less durable and of less quality.

How Economic Sabotage Is Concealed: 

An official of GISMA confirmed that they conducted a comprehensive study into the menace of smuggling and its economic deficit on Nigeria and found that importers open the Form M with wrong classification HS CODE and product description, adding that the description is stated as used machinery and shoe parts which, it said, attracts zero duty value for foreign exchange.

It further said that the smugglers by this act successfully sabotage the economy with non-payment of the prescribed 45% import duty on items of steel products smuggled into Nigeria, stressing that imported steel products are shipped in containers and put on fast track and non-inspection category and escorted to their various warehouses around the country. 

According to GISMA; “Upon the arrival of vessels in Port Harcourt, Onne and Calabar ports, no container examination is carried out from any of our reputable regulatory agencies. The activities of smugglers have largely dented the noble objectives of the Federal Government Economic Growth and Recovery Plan for the steel sector of the Nigerian economy.

“Invariably, smuggling will continue to be a determining factor in the quest for Nigeria’s economic independence as no fresh local or foreign investors will be pleased to invest in an economy where despite increasing growth in population and market demand, steel mills are shutting down while those still operating are doing so at less than 30% capacity.”

Textile Industry As Victims Of Smuggling: 

It is pertinent to state that the enumerated factors above also led to the collapse of the once vibrant textile industry in Nigeria.

Pointedly put, the cancellation of Pre-shipment Inspection at the port of shipment has created a loop-hole for the smugglers that took advantage of it to activate the inefficiency and ineffectiveness of the system owing to the fact that no authorised agency of government is specifically assigned to check the declaration document (Form M) of goods coming into Nigeria during containers’ stuffing.

It is in this wise that it is a considered opinion that it is high time the National Assembly came in to help sanitise the ugly practice through its oversight function with a view to amend enabling laws to effectively regulate the missing links in the overall interest of Nigeria by ensuring that pre-shipment inspection is re-introduced in all ports of entry.

If this is carried out, it will not only save the nation about N52billion but would go a long way in enhancing local production, sustain over 50,000 direct jobs, retain over 100,000 indirect employment opportunities as well as guarantee national security and economic independence.