The year 2020 was visibly a very challenging year across the globe as a result of the COVID-19 pandemic which disrupted economic growth coupled with several attendant consequences. Thus, it birthed several economic policies with a view to ensuring that everything is not brought to a standstill and the economy progresses, even minimally.
The Federal Government of Nigeria through it’s various institutions strived in a quest to stabilize an economy which has ran into recession for the second time in six years, through several policy decisions targeted at keeping the economy afloat.
However, the Central Bank of Nigeria and Corporate Affairs Commission had not faired well in terms of policy decisions while the Apapa Gridlock continues to impact and keeps taking tolls on several businesses and thus, not fairly managed. In this light, this Editorial seeks to assess how the Federal Government in the year 2020, has underperformed in these key areas of the economy with a view to having a seamless 2021 in perspective.
THE LAGOS PORT
The unfortunate condition of the Lagos Port is not a strange issue in Nigeria. The incessant congestion at the Lagos port has over the years become a menace both to importers and the Nigerian economy at large. However, the situation has become uncontrollable under the present federal government administration.
Studies have shown that the main causes of this immense congestion are lack of automation, lack of proper infrastructure, poor rail transport massive gridlock, and the lack of discipline among port officials.
The custom officials at the Lagos port have not adopted the inspections of cargos through automated means. Instead of carrying out inspections in a much faster way, they carry out inspections physically thereby waisting a lot of time.
As a result of the poor rail transport, 90 percent of cargo are left with no option than to go by road, and this has overtime led to the massive gridlock. The Nigerian Port Authority has claimed to work on effecting rail transport but nothing has been done to improve the situation so far.
The languid attitude that the federal government has adopted in solving this issue has caused tremendous setbacks in the nation’s economy at large. Importers, agents, and other concerned parties are not left behind as it now costs $4000 (N1,920,000) to carry goods from the port in Lagos to the Nigerian mainland.
Financial Times quoted senior executives at logistics firms as saying most importers now prefer to pay spot prices to fleet operators, who charge N1.5 million ($3,953) to drive a 40feet container from Tin Can to warehouses within Lagos rather than pay lower rates for a truck that could take several weeks to enter the port.
This cost has been reported to include road access charges and bribes but does not include terminal or storage charges on the port; general prices (which can run into tens of hundreds of dollars) associated with ships parked at the sea or money extorted by criminals and officials while trucks wait days in traffic jams.
Due to the frustrating delays and the level of indiscipline among port officials, cargos directed to Nigeria are now being preferred to be offloaded at the ports of other countries like Lomé (Togo), Ghana, Cameroon, Cote d’Ivoire, and Congo-Brazzaville. This unenviable development has visibly added to the image-denting vices of the nation.
THE CORPORATE AFFAIRS COMMISSION (CAC)
The Corporate Affairs Commission (CAC) is a major stakeholder in the business sector in Nigeria. The efficient running of activities at the CAC, is thus, a major tool for the ease of carrying out business across the country. The CAC is also a stakeholder in the federal government’s ease of doing business drive. However, the year 2020 was laced with several controversies as a result of the ineffective, and unnecessarily prolonged service delivery being witnessed at the CAC.
Despite the fact that Nigerian lawyers and business organizations alike constantly have daily business with the CAC, the commission has not deemed it necessary to minimize the exhausting procedures required to carry out important tasks. Both lawyers and business organizations have the same complaint, and that is the difficulty in getting tasks done.
Based on a survey carried out by a presidential task force set up by the NBA President, Mr. Olumide Akpata, these complaints involve a delay in the registration of a company, delay in post-incorporation, delay in issuance of Certified True Copies, courier service complaints, delay in obtaining the Registrar-General’s consent, delay in the reservation of names and so on.
The effects of these on Lawyers are ranging from the inability to meet specific deadlines, clients losing trust in lawyers, the increase in bribery for faster-desired results, and so on. Albeit, the task force set up by the NBA to see to this menace had reached significant agreements with the CAC, there are still records of complaints bordering on the same issue.
Meanwhile, when certain lawyers decided to protest against the poor service delivery of the Commission, they were sadly greeted by a letter from the Commission which states that due to their “role in disrupting and causing confusion in the peaceful activities of the Commission, thereby hindering customers from accessing the Commission to conduct their normal activities, inciting the customers against the Commission and behaving violently”, they were delisted from the Commission’s database as accredited users.
This unruly reaction from the Commission is a proof that the rule of law is blatantly ignored. Rather than focusing on ways to improve its service delivery, the CAC focuses on dealing with people who appeared to it, as dissidents.
THE CENTRAL BANK OF NIGERIA (CBN)
President Muhammadu Buhari recently directed the Central Bank of Nigeria (CBN) to stop providing foreign exchange for the importation of food items. The premise for his decision is based on the fact that seven states were already engaged in the planting and harvesting of rice which he believes would be enough for the citizens’ consumption. He again reiterated the same in September 2020 when he directed the CBN not to release a dime for the importation of food items and fertilizers.
The reason for the President’s halt of monies for the importation of food items to states is rather shallow as is not commonsensical for seven (7) states out of the 36 states in Nigeria to cater to the agricultural needs of over 200 million citizens. Besides, this directive was made by a government that has provided meagre attention to the agricultural sector of the state.
However, according to GiftedAnalysts.Com, it argues that the decision of the Federal Government to restrict forex for food importation is “a misplaced priority”. It was asked “When you look at the size of Nigeria’s neighbours, you wonder what all the fuss is about. You worry about smuggling but look at the total size of Benin’s imports – ridiculously low. Others too. How are these tiny, poor countries preventing Nigeria’s industrialisation?”. In addition, it further added that “What if our neighbours import just as much as we do? In this case, you find that the excess import from the four countries is $4.75bn. If all that flows into Nigeria, it raises our import to GDP ratio by only 1.1% to 13.4%. If this tiny amount ($4.75bn or 1.1% of GDP) can make such a difference in consumer prices, then you wonder where the Nigerian economy is at. This means you don’t actually need a lot of import to support cheaper prices for consumers.” See https://giftedanalysts.com/why-restricting-fx-for-food-import-is-a-misplaced-priority/
The year 2021 provides an opportunity for the Federal Government in conjunction with the Lagos State Government collaborate with a view to ending the gridlock affecting businesses. We applaud the Lagos State Government for rising to the task by setting up a team, to take over control of the situation from the one set up by the Federal Government.
In addition, we implore that with the commencement of the implementation of the Companies & Allied Matters Act, 2020, the Corporate Affairs Commission will step up to the task and right the wrongs that had bedevilled the Commission in the year 2020 and save itself from unnecessary controversies that had trailed its service delivery amongst others.
Finally, it is our view that the decision to restrict forex on food importation may need to be revisited and thus, the Central Bank of Nigeria by the dint of Section 2(e) of the CBN Act, empowered to provide financial and economic advice to the Federal Government of Nigeria must do so accordingly and in the best interest of the country and her citizens.
- The government’s construction of more roads and the maintenance of already constructed ones are necessary to ease the congestion in Lagos Port.
- The Lagos Port officials should be checked while carrying out their duties for the alleviation of bribery.
- Automation of inspection processes by custom officials.
- The Corporate Affairs Commission (CAC) should embrace the use of better technology to ensure better service delivery to users.
- There should be a complaints system to monitor the CAC and its officials.
- The government should divert a substantive focus on the agricultural sector of the nation.