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Vehicles Trapped at Nation’s Borders as Import Ban Begins

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  • Vehicles Trapped at Nation’s Borders as Import Ban Begins

Scores of vehicles were yesterday trapped at land borders as the Nigeria Customs Service (NCS) began the full restriction of vehicle importation through those areas. Some stakeholders especially clearing agents who claim that their vehicles were ordered months before the announcement of the restriction are caught on the wrong side.

It was learnt that many of the clearing agents are also considering alternative ways of delivering their consignments through smugglers’ routes, but the NCS said that would not be possible as its officers had beefed up security at all routes linking the borders.

With the takeoff of the ban, the prices of fairly used vehicles popularly called tokunbo will rise as many Nigerians who are contending with economic recession may not be able to buy new ones. It may also increase smuggling, thereby making government to lose revenue. But it has the potential of revving up the local production of vehicles.

The Federal Government had on December 5 placed a ban on the importation of used and new vehicles through land borders with effect from January 1, 2017. The order, however, gave the importers of vehicles through the land borders a grace period of up till December 31, 2016 to clear their vehicles at neighbouring ports.

The Public Relations Officer of the NCS, Wale Adeniyi, confirmed to The Guardian yesterday that the borders were already shut and the officers were at their duty posts to enforce the law.

President of the Association of Nigerian Licensed Customs Agents (ANLCA), Olayiwola Shittu, in a telephone interview with The Guardian yesterday said the government was avoiding the real issues. He urged the Federal Government to solve the problems at the ports; review the auto policy and publish the duty payable on every model of vehicle to halt the regime of extortion by the customs.

He said: “What we expect is a total review of the auto policy by the Federal Government. Where the vehicles come through does not matter. It is because of that policy that people are taking their consignments to the neighbouring country. Blocking the borders against vehicle importation is just like an ostrich burying its head in the sand. The problem is not solved. We need to adopt the Ghanaian model about clearing cars and we have told the customs this in the past four years, we don’t know the reason why, other than protecting themselves because of the extortion they do on vehicles.

“Let them forget about banning vehicles from the borders. What they should do is, the newer your vehicle, the lesser your duty. The older your vehicle, the higher your tariff. If you go to Ghana now, you will see them using new cars, not all these old things they are dumping here,” he said.

Shittu stressed: “Whether you are coming through the border or the ports, everybody should know how much he is paying as customs duty. You will pay the money and take your vehicle. You don’t need to appeal to anybody. Why is that difficult for them to do? It should be a public thing. They should put it on their website. This will reduce the level of extortion on importation of vehicle, if they can do that. It will solve the problem.” On the stranded vehicles at the ports of neighbouring countries, Shittu said the only viable option is that shipping companies should engage barges to bring vehicles from neighbouring countries to Nigerian ports.

“They will use coastal vessels to transfer them. But the problem will continue to be there as long as the customs continues to make the duty payable on vehicles a secret,” he said.

The Public Relations Officer of the NCS, Seme Command, Mr. Selechang Taupyen, said “the Federal Government has directed that importation of cars through the land borders be banned and we are the agency to enforce it and we have started with that.

“The border is close to the point of importation of cars and the command has placed its men and escorts at strategic places to ensure that there is no smuggling of cars through the border.“We also have a good working relationship and synergy with other security agencies who assist us in enforcing this policy because we all work for the same government.

“We advise the public to abide by the government policy and if they must purchase a car then it should come through the sea port as any vehicle that tries to come through the land border would be seized and confiscated. Violators of the law would face the full wrath of the law.’’

It is unclear how the issue of orders that had been made through land borders before the enactment of the policy would be handled. Officials were not forthcoming if such vehicles would be permanently restricted in the ports of first entry or allowed into Nigeria at added cost to the importers. If the latter becomes the case, there will be great wailing among importers and clearing agents who will be made to lose everything. One vehicle importer told The Guardian that ‘‘this is an area the government has to resolve one way or the other to stop people from committing suicide.’’

The President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero is even more concerned about the workability of the policy.

He said: “The same policy was reviewed by the previous government because we were losing revenue. All the old vehicles were in Cotonou and that policy alone enriched that country. Now we are bringing the policy again when we have failed to address the issues at the ports. If you bring in vehicles to the ports with high costs, how do you sell the vehicles? And the kind of valuation that customs are giving vehicles at the point of entry, these are the issues we must address.”

Amiwero lamented that procedures at the ports in terms of valuation of vehicles are worrisome, alleging that the customs are not complying with the valuation principle.

“Government should address the issues of valuation of vehicles; cost of bringing in the consignment into the country; and the entire procedure. That is when you can then start to talk about banning it. Besides, government must understand that it is not every vessel that can come into Nigeria due to shallow draft. Most of the vessels can decide to go to Togo than coming here because of our draft level. Go to Togo, Benin Republic and Cameroun and see how many ships are berthing,” he said, even as he expressed doubts about the capacity of the customs to combat massive smuggling that would arise as a result of the policy.

In another development, the Comptroller-General of Customs, Col. Hameed Ibrahim Ali (Rtd), has approved the redeployment of eight Assistant Comptrollers-General and 238 Deputy Comptrollers of Customs in a bid to strengthen operations and reposition the service to meet the challenges of the New Year. Customs Spokesman, Wale Adeniyi has been redeployed to Apapa Customs Area Command, Lagos.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Energy

Massive Fuel Station Closures in North-East Nigeria Over Anti-Smuggling Clampdown

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In a significant protest against an anti-smuggling operation, nearly 2,000 petrol stations in Nigeria’s North-East have shut down, causing widespread fuel shortages and forcing motorists to turn to the black market.

The closures began yesterday following a crackdown by the Nigeria Customs Service (NCS), which targeted petrol outlets suspected of smuggling fuel to neighboring countries.

Dahiru Buba, Chairman of the Independent Petroleum Marketers Association (IPMAN) for Adamawa and Taraba states, revealed that the closures were a direct response to the NCS impounding tanker trucks and shutting down some fuel outlets.

This crackdown, known as “Operation Whirlwind,” aimed to curb the smuggling of subsidized petrol to Cameroon, Benin, and Togo—a practice that has thrived for years due to the significant price difference.

Buba explained that the operation initially led to the seizure of tanker trucks belonging to IPMAN members. Although the trucks were released following protests by the association, the continued impoundment of more vehicles and the closure of several petrol stations led to the widespread shutdown.

“We wrote to them [Nigeria Customs] again, but there were no responses. That is why we decided to go on strike,” Buba said, adding that over 1,800 outlets had ceased operations.

“This is our business, and we cannot be quiet when our members are treated this way,” Buba added, emphasizing the association’s frustration with the ongoing situation.

In response to the closures, the black market has surged, with fuel vendors in Adamawa’s capital, Yola, selling petrol at N1,400 per liter—significantly higher than the official pump price of between N650 and N750.

This has placed an additional burden on consumers, who now face inflated costs amid the fuel scarcity.

Mangsi Lazarus, the customs spokesperson for Adamawa and Taraba, defended the operation, stating that the impounded tanker trucks were indeed being used to smuggle petrol.

“We are simply carrying out our duty to prevent illegal activities that harm the economy,” Lazarus said.

The fuel crisis comes as oil prices edged higher globally due to anticipated strong driving demand, geopolitical tensions in the Middle East, and drone attacks on Russian refineries.

Brent crude futures for August delivery rose by 0.9% to $86.04 a barrel, while US crude gained 1.1% to $81.63 per barrel.

“The chief underlying reason behind the price strength … is the growing confidence that global oil inventories will inevitably plunge during the summer in the northern hemisphere,” said Tamas Varga of oil broker PVM, referring to seasonal demand for oil products.

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Crude Oil

Oil Prices Inch Down Amid Dollar Strength and Interest Rate Concerns

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Crude oil prices declined on Monday as the U.S. dollar strengthened and concerns over potential interest rate hikes resurfaced.

Brent crude oil, against which Nigerian oil is priced, slipped marginally by 3 cents to settle at $85.21 per barrel following a modest 0.6% decline on Friday.

Similarly, U.S. West Texas Intermediate (WTI) crude oil saw a minimal decrease of 2 cents to close at $80.71 per barrel.

Market analysts pointed to the robust performance of the U.S. dollar, which gained ground after the release of positive Purchasing Managers’ Index (PMI) data on Friday.

Tony Sycamore, a markets analyst at IG in Sydney, noted, “The U.S. dollar has opened bid this morning and appears to have broken higher following better U.S. PMI data on Friday night and political concerns ahead of the French election.”

A stronger dollar typically makes dollar-denominated commodities like oil less attractive for holders of other currencies, putting downward pressure on prices.

Last week, however, both Brent and WTI crude contracts managed to gain approximately 3% each.

This was largely driven by increasing signs of demand recovery for oil products in the U.S., the world’s largest consumer of crude oil. Additionally, ongoing supply constraints enforced by OPEC+ further supported market sentiment.

According to ANZ analysts, U.S. crude inventories continued their decline while gasoline demand recorded a seventh consecutive weekly rise.

Moreover, jet fuel consumption has rebounded to levels last seen in 2019, indicating a robust recovery in travel-related fuel demand.

Speculative activity in the oil market has also been notable, with analysts from ING observing an increase in net-long positions in ICE Brent as traders adopt a more positive outlook heading into the summer months.

“We remain supportive towards the oil market with a deficit over the third quarter set to tighten the oil balance,” they stated.

Despite these bullish indicators, geopolitical tensions persisted, providing a floor for oil prices.

Escalating conflicts in the Middle East, including the Gaza crisis and increased drone attacks on Russian refineries by Ukrainian forces, continued to underpin market sentiment.

In South America, Ecuador’s state oil company Petroecuador declared force majeure on deliveries of Napo heavy crude for exports due to severe weather conditions.

Heavy rains led to the shutdown of a critical pipeline and oil wells, impacting production and exports.

Meanwhile, in the U.S., the number of operating oil rigs fell by three to 485 last week, marking the lowest count since January 2022, according to Baker Hughes’ weekly report.

Looking ahead, the interplay between the U.S. dollar’s strength, geopolitical developments, and economic indicators such as PMI data will likely dictate short-term oil price movements.

Investors and analysts remain vigilant for any shifts in these factors that could influence global oil market dynamics in the coming weeks.

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Gold

First Commercial Gold Transaction Nets Nigeria $5 Million in Foreign Reserves

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The Ministry of Solid Minerals Development has concluded its first commercial transaction under the National Gold Purchase Program (NGPP), bolstering the nation’s foreign reserves by $5 million.

Minister of Solid Minerals Development, Dele Alake, announced the successful sale of over 70 kilograms of gold, refined to meet the stringent London Bullion Market Association Good Delivery Standard.

Speaking at the presentation ceremony, Alake emphasized the economic significance of the transaction, stating that it injects approximately NGN 6 billion into the rural economy.

He lauded President Tinubu for his unwavering support for reforms in the solid minerals sector, highlighting the pivotal role of the NGPP in enhancing Nigeria’s foreign reserves and bolstering the value of the Naira.

“This transaction represents a strategic move to use the Nigerian Naira to acquire a liquid asset denominated in United States Dollars, demonstrating a viable strategy for fiscal and monetary stability,” Alake stated.

He further expressed confidence in the NGPP’s ability to contribute to Nigeria’s economic diversification agenda, fostering greater economic confidence and attracting foreign investment.

Executive Secretary of the Solid Minerals Development Fund, Fatima Shinkafi, explained that adherence to the London Bullion Market Good Delivery Standard ensures that Nigeria’s gold exports meet global trading requirements.

She emphasized that only gold bars meeting these standards are acceptable in the settlement of Loco London contracts, reinforcing Nigeria’s credibility in the global gold market.

President Tinubu, upon receiving a symbolic gold bar, commended the Ministry for achieving a crucial milestone in the nation’s economic diversification efforts.

He described the transaction as a concrete step towards realizing the objectives of the Renewed Hope Agenda, aimed at reducing economic dependence on oil and gas revenues.

Through initiatives like the NGPP, Nigeria aims to further enhance its gold reserves, promote economic stability, and create an environment conducive to sustainable economic growth.

The successful completion of the first commercial gold transaction marks a pivotal moment in Nigeria’s journey towards becoming a key player in the global gold market, driving economic prosperity and resilience.

The Ministry of Solid Minerals Development continues to advocate for supportive policies and regulatory frameworks that promote transparency, efficiency, and sustainability in the mining sector, laying the groundwork for future economic growth and development.

As Nigeria moves forward with its gold refining and export initiatives, stakeholders anticipate continued progress in diversifying revenue streams and strengthening the nation’s economic resilience on the global stage.

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