Benin Republic Slams CFA 2m On Nigeria-bound Cargoes

Importers have lamented the high charges slammed on Nigerian-bound transit cargoes by the government of Benin Republic, making it impossible for them to bring in transit cargoes through the Seme land borders.

Nigeria currently pays about CFA2.2m as charges on 40ft transit containers, as against CFA500,000 paid by other neighbouring countries to move the same consignment out of their port.

The Lawyer gathered that cargo importation through Seme border has dropped by 23.09 percent in the first quarter of 2023 as a result of the retaliatory policies introduced by the government of Benin Republic on Nigeria bound import and export cargoes.

Also, export trade in the first quarter of 2023 compared to Q1 2022 dropped by 75,000 metric tonnes.

It was gathered that the drop in the period under review was due to Benin Republic anti-trade policies targeted at Nigeria in retaliation for border closure by former President Muhammadu Buhari in August 2019.

Data seen by this paper showed that trade between the two countries had dipped by 23.09% in the first quarter of 2023 compared to 2022 Q1.

For instance, the Customs command generated a total of N350 million in revenue from imports in Q1 2023 which signified a dip of N150.1 million shortfall as against N455 million realised in 2022.

On export trade, in Q1 2023, the command experienced a shortfall to the tune of 75,000 metric tonnes of cargo.

The command facilitated 1,243 trucks bearing 40,096.47 metric with free on-board value of N4.3 billion and the National Export Supervision Scheme (NESS) fee of N21.5 million in first quarter of 2023

But in the first quarter of 2022, 3006 trucks bearing 116,053.9 metric tonnes of cargo with FOB value of N6.5 billion with NESS fees of N33 million was recorded.

Immediate past president of Nigeria, Buhari, had shut down the land border with neighboring countries, Benin Republic, Chad and Niger over insecurity, smuggling and for food security.

Following the border closure, Benin Republic slammed retaliatory charges on Nigerian-bound transit cargoes making it impossible for Nigerian importers to bring in transit cargoes through the Seme land borders.

Also, the country slammed high charges on Nigeria bound ECOWAS Trade Liberalization Scheme (ETLS) cargoes, thereby making intra African trade expensive and breaching the trade protocol of the Economic State of West African States (ECOWAS) trade scheme.

Confirming the development, the Customs Area Controller (CAC), Seme Border Command of the Nigeria Customs Service (NCS), Dera Nnadi, said the economic policy of the Republic of Benin that charges on goods in transit to Nigeria constitute tariff barriers to trade along the corridor, which also affected the command’s revenue.

Also speaking with press, the former chairman, Association of Nigerian Licenced Customs Agents (ANLCA), Alhaji Lasisi Fanu, said shortfall of cargoes was as a result of the retaliatory policies introduced on Nigeria import and export bound cargoes by the government of Benin Republic.

He said charges on 40ft transit containers is about CFA2.2m as against CFA500,000 paid by other neighbouring countries to move the same consignment out of their port.

According to him, the government of Benin Republic calls the payment administrative charge, but it is definitely not so.

“Third party goods are also known as transit cargoes and they originate from South Korea, China, London among others, but those containers are not coming anymore and even if they come, it may be once in month. The only goods coming into Nigeria through Seme border now are ETLS. The 3rd party goods are not coming anymore because of the charges we pay in Cotonou.

“For instance, Nigerians pay between CFA2m to CFA2.2m in Cotonou. If we come to Seme border, we pay normal duty for Nigeria Customs Service (NCS) before containers can come into Nigeria and it’s the same Pre Arrival Assessment Results (PAAR) for Cotonou that will be used in Nigeria,” Fanu said.

“With this, we are paying twice on a 40ft container and when we add logistics, that is much because the administrative charges we pay in Cotonou is too much and that is why the 3rd party goods are not coming through Seme border for now except for ETLS,’’ the foremost clearing agent stated.

Fanu also stated that the ETLS cargoes coming into the country have reduced due to the high charges slammed on it by the same Cotonou government.

He, however, called on the Nigerian government to engage the Benin Republic government on the high administrative charges on cargoes slammed on Nigeria-bound transit cargoes.

“The ETLS that is coming is 25 percent. Activities at the border before and now, definitely everyone knows that there is a difference. The terminal for transit containers is empty and the main reason is extra money we pay in Cotonou. They call it administrative charge but we call it Customs duty because it is exorbitant.

“If it’s administrative charge as they claim, it shouldn’t be more than 500,000CFA for 40ft because the cargoes are not used in Cotonou but just passing through their country. They said since we have ports in Nigeria we use them. But they don’t give neighboring countries such as Cameroon, Niger these same exorbitant charges. Niger Republic doesn’t pay the same amount of money they charge Nigeria. Land locked Niger Republic pay between CFA500,000 to CFA600,000 for 40ft but they charge us CFA2.2m.”

On the way forward, he said, “For the cargoes to come in, Benin Republic should adhere to ECOWAS protocol agreement that consignment not used in their country should not be charged Customs duty but administrative charges because the customs duty is to be paid to Customs at its point of entry.

Also speaking, the chairman, Association of Registered Freight Forwarders of Nigeria (ARFFN), Seme border, Innocent Elum, said activities are yet to fully return to the land borders after the reopening of the border by the federal government.

He also complained about high administrative charges on Nigerian-bound transit cargoes from Benin Republic.

According to Elum, devaluation of naira also made importation through the land borders unattractive.

He said, “Seme remains as it were since the borders were closed and later re-opened. The policies of government affecting importation of goods through the land borders are still being enforced. So, the containers are not yet coming unless on a skeletal basis and only some people who can finance the clearing of their goods, no matter how costly they are, that now come through the land borders.”

“The exchange rate is also another challenge. Our money is being devalued by so much naira pursuing the CFA. Those are the problems basically between Benin Republic and Nigeria. What is obtainable is not supposed to be full duty payment because it is for transit cargoes. What should be paid by Nigerians making use of their port is administrative charges but because the government of Benin Republic don’t want to enforce the ECOWAS treaty, we pay higher and that makes the corridor unattractive for transit Cargoes.

“But ECOWAS treaty is being followed for other countries. While Nigeria pays full duty of CFA2m on transit cargoes, other West African countries pay administrative charges between CFA200 to CFA300 on a 20ft container of goods.”

He, however, disclosed that all pleas from the clearing agents to the Beninois government have proved abortive with no hope of a change of trade policies.

“We have engaged the government of Benin Republic and received no response. At a point, there was hope but they never changed and the situation continued. We hope this new government will come and engage with them because we believe that the Benin Republic government under President Talon is reacting to the border closure by the outgone government. We hope the new government will take it up and discuss with them to see how things can improve.”

Meanwhile, clearing agents have disclosed that multiple checkpoints by security operatives at the border are hampering transborder trade.

Tony Akabueze, who operates at the Seme border, stated that there are about 100 checkpoints from the Seme border at (J5 around the border Back gate) to Gbaji Bridge.

He also informed that from the Gbaji Bridge/Iyafin axis there are no fewer than 30 checkpoints on both sides of the road before you get to Badagry roundabout.

Akabueze specifically confirmed the presence of a new Police checkpoint inwards the border, alleging that the additional checkpoints mounted by the Customs, Army and Police are basically for extortion and not to checkmate smuggling.

He said, “It is not only Customs that create these additional checkpoints. Like the one we just passed now has the presence of Soldiers, Police, Border patrol and Customs. Concerning the issue of checkpoints mitigating smuggling activities, I would say this is Nigeria and we know that people who man the checkpoints are just pretending.

“Ostensibly it is to checkmate smuggling activities but the reality is that they are just working for themselves. So, I wouldn’t say the multiple checkpoints are mitigating smuggling activities because of course smuggling activities go on in the night unhindered here at Seme and that is the truth.”