Over N800bn goods trapped at borders nine months after …MAN says COVID-19 stalled implementation of border closure report
More than nine months after the Federal Government shut its land borders with neighbouring West African countries, export products belonging to Nigerian manufacturing firms including Cadbury Nigeria PLC, the Dangote Group, Unilever, Nigerian Bottling Company PLC and PZ Industries PLC, among othersare still trapped at the borders, a development that has affected the profitability of these firms.
Recall that President Muhammadu Buhari had in August last year announced the closure of the country’s land borders, especially those in Seme and Idiroko that link the Republic of Benin as part of measures to check the influx of fake and substandard goods as well as light weapons into the country, thus leaving the already packaged export products trapped at the borders.
Also recall that following the closure of the land borders and the resultant trapping of some export products, the embattled companies had switched to exporting their consignments through the air and seaports in order to retain their market share, which in addition to being more expensive, takes a lot of time.
Meanwhile, President of the Manufacturers’ Association of Nigeria MAN, umbrella body for these manufacturing firms, Engr. Mansur Ahmed has said that report of a tripartite meeting held between the representatives of the association, the office of the National Security Adviser NSA and the Nigeria Customs Service, which would have addressed some of these issues could not be implemented due to the outbreak of the novel coronavirus that is currently ravaging most countries of the world.
Competent industry sources, who spoke with our Correspondent, noted with regrets that those consignments are still trapped at the borders, a development that has tied down both capital and expected profits from the export goods for nearly 10 months, saying that efforts to get them to the market have approved abortive.
The source, who also disclosed that the outbreak of COVID-19 and the resultant lockdown of the economy as part of efforts to stem the spread of the virus has further worsened the plight of the manufacturing firms, who even before now operate under severely harsh economic conditions occasioned by poor infrastructure, high cost of funds and dwindling sales due to decline in consumers’ purchasing power, among others.
It was as part of measures to cushion the effects of the harsh operating environment that many of these indigenous firms began to explore other markets within the West African sub region including the Republic of Benin, Togo and Ghana under the Economic Community of West African States ECOWAS Trade Liberalisation Scheme ETLS to boost turnover and ultimately profitability.
The source noted that the Federal Government should as a matter of urgency consider opening up the borders to enable them move out the affected goods as part of incentives and palliatives to enable them cushion the effects of the lockdown occasioned by the pandemic, especially having devised some palliatives for the Small and Medium Scale Enterprises SMEs through the Central Bank of Nigeria CBN to enable them stay afloat.
While speaking on the effects of the lockdown on their businesses, he noted that though the government granted a waiver for the movement of essential goods like food, water and other medicaments during the lockdown, some overzealous security men would always detain trucks bearing such essential items on transit to other parts of the country, which leads to delays and unquantifiable losses.
“Ordinarily, no manufacturing firm would have loved to be transporting goods by road to other parts of the country, especially in the absence of functional rail transport system but for the very harsh operating environment. Under normal circumstances, one would have loved to establish small manufacturing units across strategic locations in the country to service certain regions. But you cannot contemplate that. First you will think about power; the electricity to power the factory and other incidental costs that would make such idea impossible. Using generators is killing because of the high cost of Automotive Gas Oil AGO, also called diesel.
“Come to think of it, we should have set up manufacturing plants in some of these West African countries, at least one to service that region and all these challenges with land borders, airports and seaports and the attendant logistic cost would have been a thing of the past”, he said.
However the MAN President, who spoke in an exclusive interview, disclosed that there was a tripartite meeting between MAN, National Association of Chambers of Commerce, Mines and Agriculture NACCIMA, the Rice Millers Association, the NSA and Customs at its headquarters, where submissions were made and decisions taken on how to address the issues around the border closure.
He also disclosed that a comprehensive report was written that would have covered the interest of all parties but regretted that the report was yet to be implemented due to the distractions that followed the outbreak of the coronavirus, which relegated the issue of border closure to the background.
He however urged members of the association, whose goods are still trapped at the borders to write the association on individual basis so that the issues would be taken up with the NSA, Customs or any other relevant agency, adding that the association has for now received only one of such applications and is handling it.
On incentives and palliatives for the real sector operators, he noted that the President was clear in his last broadcast to the nation on a set of incentives and palliatives for companies operating in the country as part of deliberate efforts to jumpstart the economy in the post COVID-19 era.
While insisting that the government is concerned about the wellbeing of the players in the economy, including the real sector operators in terms of incentives, he assured that the association would keep tab on the government to ensure that such incentives were achieved.