THE DILEMMA OF IMPORTERS AND CLEARING AGENTS TO THE DEVELOPMENT OF NIGERIA: A CASE STUDY OF TINCAN ISLAND, APAPA, LAGOS

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CHAPTER ONE

INTRODUCTION

1.0       BACKGROUND TO THE STUDY

Nigerian sea port practices continue to present major obstacles to trade.  Importers report erratic application of customs regulations, lengthy clearance procedures, high berthing and unloading costs, and corruption.  Due to lack of space at Lagos Sea ports, ships reportedly queue up for days, and in some cases weeks and months, before being able to berth and discharge their contents.  Due to delays caused by congestion and the poor condition of the port access roads, operations at Nigerian ports are among the most expensive in the world (Barros, Assaf and Ibiwoye, 2010).

Seaports play important roles in the development of trade as they serve as gateways and transit points through which imports and exports flow into and out of a country. As such, seaports are critical elements of global supply chains. Global trade enhances economic development, and many countries have taken advantage of this linkage by reducing or eliminating obstacles that slow down the movement of cargo through their seaports (Munisamy and Jun, 2013).

Clearing and forwarding professionals play pivotal and significant roles in facilitating Ease of import business in Nigeria and this can be divided into three stages: Pre– Import Role, Role Play When Goods Arrive and Clearing Process and Forwarding Goods to the Consignee. Many people tend to underrate this stage before importation and it determines whether the commodity when imported, can be cleared quickly or otherwise from the ports. It is the responsibility of the clearing agents to insist that, his consignee should consult with him because many importations that have difficulties during clearing process arise due to the importers neglecting this stage before embarking on importation. There are extant laws that must be obeyed and there are commodities placed on imports prohibition list and also many commodities that attract levies. The only person that can avail an importer of this information is the clearing and forwarding professional hence, it can be described as a determining factor to the success of Ease of imports (Munisamy and Singh, 2011).

Port efficiency studies of Tincan Island and other African seaports have been approached from different perspectives by different researchers. Okeudo (2013) amongst the relatively few studies that have an economic perspective which empirically demonstrate that the high dwell time of cargo, which negatively impacts on port efficiency, could be the result of factors other than transport infrastructure inadequacies, as has been previously held. Indeed, other port researchers have discussed port efficiency of non-Sub-Saharan Africa ports from different perspectives, including the use of physical and financial indicators such as:  vessel turnaround time and income.

1.1       STATEMENT OF THE PROBLEM

Most of the challenges facing the clearing and forwarding professionals in the maritime industry have been blamed on ignorance of clearance procedure/operations. Most of the suspects arrested for under declarations and concealment often claimed that they are not aware. This is largely because, most of them, have not been part of the pre-clearing documentation, abnitio, they just jumped on an importer that is desperate and because of their gullibility, may run into problems (Carine, 2015). Many at times during physical examination of imports, lots of discoveries which are in variance to what is declared are made. It varies from wrong classification of imports, to query on value, to under declaration and at times capital flight. And all these mentioned above are Customs and Excise Management Act (CEMA) related offences, which are punishable under the law.

Economic progress through global trade has been slow for many developing countries particularly in Sub-Sahara Africa (SSA). The slow rate of trade growth could be attributed to the high cost of trade which appears to be driven by (amongst other factors) the inadequacies in transport infrastructure and regulatory issues (Lu, Park and Huo, 2015). Over the past two decades, whilst efforts have concentrated on improving port efficiency through the provision of seaport infrastructure, and the adoption of relatively modern port management models, such as the involvement of private sector port operators and customs reforms, relatively little effort has been exerted to understand the root causes of port inefficiency at the operational level, particularly in Sub-Saharan African countries.

1.2       AIMS AND OBJECTIVES OF THE STUDY

The general objective of this study is to examine the dilemma of importers and clearing agents to the development of Nigeria. The following are the specific objectives:

1. To examine the relationship between importers and clearing agents and development in Nigeria.
2. To find out if erratic applications of customs regulations have effect on importers and clearing agents.
3. To find out how high berthing and unloading costs affect the development of Nigeria.
4. To examine the dilemma of importers and clearing agents with respect to the development of Tincan Island, Apapa, Lagos.

1.3       RESEARCH QUESTIONS

1. What is the relationship between importers and clearing agents and development in Nigeria?
2. How will erratic applications of customs regulations have effect on importers and clearing agents?
3. How will high berthing and unloading costs affect the development of Nigeria?
4. What are the dilemma of importers and clearing agents with respect of Tincan Island, Apapa, Lagos?

 1.4       RESEARCH HYPOTHESIS

The following Hypotheses were formulated for the study:

H_o: There is no significant relationship between importers and clearing agents and development in Nigeria.

H₁: There is significant relationship between importers and clearing agents and development in Nigeria.

 1.5       SCOPE OF THE STUDY

This research study examines the dilemma of importers and clearing agents to the development of Nigeria. The scope of the research is limited to Lagos Sea Port with special reference to Tincan Island, Apapa, Lagos.

1.6       SIGNIFICANCE OF THE STUDY

The significant of this research work are enormous. First, the work addresses the key issues facing Nigerian importers and clearing agents. It touches areas that affect the poor condition of the Sea port access roads. Hence, the study is of benefit to Nigeria Port Authority, Customs, Sea Port workers, clearing and forwarding agents and others.

Secondly, this study will contribute to the growing body of knowledge to importers and clearing agents as it looks at the concept from a different angle.

Thirdly, this study will aid other researchers who might want to carry out research in related areas.

1.7       DEFINITION OF TERMS

Importer: The individual, firm or legal entity that brings articles of trade from a foreign source into a domestic market in the course of trade (O’Sullivan and Shjsnsbeffrin, 2003). For customs purposes, the party who makes (or on whose behalf an agent or broker makes) the import declaration, and who is liable for the payment of duties (if any) on the imported goods. Normally, this party is named either as the consignee in the shipping documents and/or as the buyer in the exporter’s invoice.

Clearing Agent: Clearing Agent is a licensed person or company that is involved in the customs clearance of imported or exported goods from one country to another The company operating as Clearing Agent may at its election perform all or any business undertaken or provide advice, information or services, whether gratuitous or not, either itself or it may procure that any other person undertakes such business or provides such advice, information or services as principal upon and subject to the terms and conditions contained herein which shall apply mutatis mutandis to the Customer and any such person. A Clearing agent arranges the customs clearance and pay over any taxes on behalf of the buyer. The Forwarding agent arranges the movement of the cargo. The Forwarding Agent may also do clearing. The clearing and forwarding (C&F) instruction is a document completed by the exporter/importer for their forwarding and/or clearing agent. This will cover all the activities that are required to move the goods either from the seller to the Incoterms handover point (in the case of exports) or from the Incoterms handover point to the buyer (Vid, 1996).

Sea Port: A Sea port is a maritime commercial facility which may comprise one or more wharves where ships may dock to load and discharge passengers and cargo (Munisamy and Singh, 2011). A land facility designated for reception of personnel or materiel moved by sea, and that serves as an authorized port of entrance into or departure from the country in which located.

Development: Development is the growth of something such as a business or an industry. An event constituting a new stage in a changing situation. Development can be defined as a process of economic and social advancement in terms of quality of human life. (Vid, 1996).

Customs Duty: Customs Duty is a tariff or tax imposed on goods when transported across international borders (Thomas, 2000). Customs Duty is a tax levy on imports and exports of goods. The rates of customs duties are either specific or on ad valorem basis, that is, it is based on the value of goods.

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