Manufacturers have accused the Nigerian Customs Service (NCS) as well as other government ministries, departments and agencies (MDAs) of abandoning their primary responsibility, trade facilitation, for revenue collection.
The stakeholders alleged that agencies of government have chosen to focus on revenue generation rather than introducing policies that are aimed at promoting trade.
Reacting to the claim that NCS exceeded its Q1 target by 29.96 per cent, Chief Executive Officer, Multimix Group and logistics/export expert, Dr Obiora Madu, regretted that despite the failing economy, customs and other government agencies are surpassing revenue targets at the detriment of growing trade and businesses.
“Globally, customs’ role is centred on trade facilitation, but for as long as I can remember, Nigerian Customs has been a revenue collector for the government, abandoning its primary role of facilitating trade. There was a time that manufacturers were given a certificate, Export Expansion Grant, which can be used to pay customs duty, but if you present that certificate to pay duty, customs will ignore you because it will not count as revenue for them.”
He lamented that this particular emphasis on revenue generation is affecting competitiveness, pointing out that local manufacturers are needlessly suffering. He wondered how those still operating manage to cope.
“Unless we re-engineer our customs and other government agencies, the industrialisation we have been talking about will not see the light of day. This re-engineering must start from the government side, which puts pressure on customs to bring in revenue as well as the customs themselves, who derive pleasure in this assignment given to them. We must re-channel customs’ focus to trade facilitation, which is their primary assignment,” he explained.
He added that while government agencies can collect revenue for the government, such an endeavour should be secondary. He urged the government to involve the manufacturers and other critical stakeholders in the budgeting process, adding: “I am not saying government, through customs, should not source revenue, but that should be secondary to trade and investments. In Malaysia, before the budget is passed, the prime minister calls manufacturers and SMEs to a meeting and asks for their pain points and they list them. Those are what guide their government’s decisions, and they adjust their budget based on the recommendations and needs of the real sector.
“They ensure that the geese that lay the golden eggs are well taken care of. Sadly, the reverse is the case in Nigeria, where our economy runs on autopilot, unlike what happens in other countries. Here, the government is only interested in generating revenue from companies and businesses that are already paying a myriad of taxes. I truly wonder how businesses and the economy itself are still surviving and if this anomaly is not corrected soon, we should not be surprised at whatever happens.”
In his comments, the Executive Director, Universal Luggage Industries Limited and former chair, the Manufacturers Association of Nigeria (MAN), Apapa branch, Frank Ike Onyebu, said it is shameful that the government does not appreciate the importance of manufacturers or the real sector and is only concerned with generating overnight revenue.
He said it is extremely sad that the government has not realised that if properly developed and harnessed, the real sector can generate ten times what customs and its other agencies bring in yearly.
His words: “Customs and the other agencies are supposed to be service-providing agencies while manufacturers and businesses are the employers of labour and the lifeblood of the economy. Unfortunately, the government is only concerned about getting revenue and worse still, now that many manufacturers and businesses are closing shop, with many people being laid off every day. I do not understand the government’s priority. The government needs to understand that the real sector is the backbone of any economy and till it realises this, the economy will keep going from bad to worse.”
Citing examples of other countries that have developed their manufacturing sectors, which have in turn become huge revenue-generating arms for their respective governments, he regretted that the reverse is the case in Nigeria, as manufacturing has become unbearably draining and unattractive to investors.
He added, “Manufacturing is so unattractive in this country, and the only way to turn this around is to make the environment attractive to both local and foreign investors. I can tell you this for free because I am in this sector; most foreign investors have exited or are in the process of exiting, while the local ones are quietly dying off or moving to other climes.
“Everything is working against manufacturing in the country. The so-called Band A electricity we were promised is a scam because we are not getting Band A service, but are being forced to pay Band A money, and when we complain, the electricity distribution companies behave exactly like a government agency instead of a private one, which they supposedly are. Today, it rained in Lagos and the power went off and believe it or not, we would not see power till tomorrow afternoon, most likely. How are we expected to be productive like this?”
Lamenting that customs is not the only clog in the wheel of trade and manufacturing, he said all the government agencies are active disruptors of trade as well.
“They all come to collect all manner of taxes and revenues from us. It has become worse in the last two years. As more manufacturers and businesses are dying, the revenue collection agencies are increasing in number. The worst part is that the money being collected is not being used to improve the economy in any noticeable way.
“One would think that as the cost of production goes up, we would hike the cost of goods to counter this increase, but we cannot even do this because the purchasing power of Nigerians is extremely low. This is a big problem for us, and instead of the government focusing on these issues, it is only interested in generating more revenue for itself through its hundreds of agencies; this is not sustainable for business survival.”
