- 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.
Increased Demand Paves The Way for Expansion of Africa’s Sugar Industry
Africa, June 2021: A new focus report produced by the Oxford Business Group (OBG), in partnership with the International Sugar Organization (ISO), explores the potential that Africa’s sugar industry holds for growth on the back of an anticipated rise in regional demand. The report was presented to ISO members during the MECAS meeting at the Organization’s 58th Council Session, on June 17th 2021.
Titled “Sugar in Africa”, the report highlights the opportunities for investors to contribute to the industry’s development by helping to bridge infrastructure gaps in segments such as farming and refining and port facilities.
The report considers the benefits that the African Continental Free Trade Area (AfCFTA) could deliver by supporting fair intra-African sugar trade efforts and bringing regulatory frameworks under a common umbrella, which will be key to improving competitiveness.
The increased international focus on ESG standards is another topical issue examined. Here, the report charts the initiatives already under way in Africa supported by green-focused investment with sustainability at their core, which will help to instil confidence in new investors keen to adhere to ESG principles in their decision-making.
In addition, subscribers will find coverage of the impact that Covid-19 had on the industry, with detailed analysis provided of the decrease in both worldwide sugar production and prices, as movement restrictions and social-distancing measures took their toll on operations.
The report shines a spotlight on sugar production in key markets across the continent, noting regional differences in terms of output and assessing individual countries’ roles as net exporters and importers.
It also includes an interview with José Orive, Executive Director, International Sugar Organisation, in which he maps out the particularities of the African sugar industry, while sharing his thoughts on what needs to be done to promote continental trade and sustainable development.
“The region is well advanced in terms of sugar production overall, but several challenges still hinder its full potential,” he said. “It is not enough to just produce sugar; producers must be able to move it to buyers efficiently. When all negotiations related to the AfCFTA have concluded, we expect greater investment across the continent and a clearer regulatory framework.”
Karine Loehman, OBG’s Managing Director for Africa, said that while the challenges faced by Africa’s sugar producers shouldn’t be underestimated, the new report produced with the ISO pointed to an industry primed for growth on the back of anticipated increased consumption across the continent and higher levels of output in sub-Saharan Africa.
“Regional demand for sugar is expected to rise in the coming years, driven up by Africa’s population growth and drawing a line under declines triggered by the Covid-19 pandemic,” she said. “With sub-Saharan Africa’s per capita sugar consumption currently standing at around half of the global average, the opportunities to help meet increasing domestic need by boosting production are considerable.”
The study on Africa’s sugar industry forms part of a series of tailored reports that OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.
Global Demand for Investment Gold Plunged by 70% YoY to 161 Metric Tons in Q1 2021
Last year, investors flocked to gold as stock markets crashed on a gloomy economic outlook due to the spread of the COVID-19 pandemic. In the second quarter of 2020, global demand for investment gold surged to over 591 metric tons, the second-highest level since 2016. However, the investors’ demand for gold has dropped significantly this year.
According to data compiled by AksjeBloggen, global demand for investment gold plunged by 70% year-over-year to 161 metric tons in the first quarter of 2021.
The Lowest Quarterly Figures after Record Gold Investments in 2020
In 2016, the global gold demand amounted to 4,309 metric tons, revealed Statista and the World Gold Council data. By the end of 2019, this figure rose to 4,356 metric tons. Investment gold accounted for 30% of that amount. Worldwide gold jewelry demand volumes reached 2,118 metric tons that year. Central banks and technology followed with 648 and 326 metric tons, respectively.
Statistics show the global demand for investment gold surged amid the COVID-19 outbreak, growing by 35% YoY to almost 1,800 metric tons in 2020. Demands for gold used in technology also rose by 17% to 383.4 metric tons, while central banks and other institutions bought 326.2 metric tons of gold in 2020, a 50% plunge in a year.
However, after record gold investments in 2020, the global demand for gold for investment purposes dropped to the lowest quarterly level in years.
The Price of Gold Dropped by 5% Since January
The average gold value tends to increase during a recession, making it an attractive investment in uncertain times. In February 2019, a troy ounce of gold cost $1,320.07, revealed the Statista and World Gold Council data. By the end of that year, the price of gold rose to $1,479.13.
The gold price continued growing throughout 2020, reaching an all-time high of over $2,000 in August. By the end of the year, the precious metal price slipped to $1,864 and then rose to over $1,950 in January 2021.
However, the first quarter of the year brought a negative trend, with the price of gold falling to $1,684 by the end of March. Statistics indicate the price of gold stood at around $1,860 last week, a 5% drop since the beginning of the year.
Gold, Other Safe Haven Assets Plunge Ahead of Fed Rate Hikes
Gold and other safe-haven assets plunged last week as the Federal Reserve signals the possibility of raising interest rates twice in 2023 given the ongoing economic recovery post-COVID-19.
The price of gold dropped by 6.04 percent last week as investors rushed to move their funds out of safe-haven assets including the new gold, cryptocurrency.
The entire crypto space sheds $898 billion in market value to hover around $1.625 trillion last week, down from $2.523 trillion recorded on Wednesday 12, 2021. Its highest market capitalisation till date.
The Federal Reserve raised inflation expectations to 3.4 percent and shifted the year it is expected to increase interest rates from near-zero to 2023 from the previously projected 2024.
The new hawkish stance of the central bank led to capital outflow from safe havens and subsequently boosted dollar attraction.
The United States Dollar gained across the board with the dollar index that tracks its performance against six major currencies, rising by 0.63 percent to 91.103 last week.
However, on Monday morning the gold showed signs of recovery, gaining 0.5 percent to $1,772.34 per ounce following the retreat in U.S. treasury yield that boosted the attraction of non-yielding metal.
Bitcoin, the most dominant cryptocurrency coin, pared losses to $33,245 per coin, up from the $32,658 decline it posted last week.
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