In keeping with Article 4 of United Nations Conference on Trade and Development (UNCTAD) minimum standards for shipping agents all over the world, the Federal Government has now compelled all shipping agencies to open Disbursement Accounts (DAs) from where they will carry out operational costs for their multinational principals overseas.
The Executive Secretary (ES) of Nigerian Shippers Council (NSC), Mr Hassan Bello, disclosed this during a meeting between the Central Bank of Nigeria (CBN) representative and shipping industry stakeholders in Lagos.
According to him, the maintenance of disbursement accounts as provided by ‘UNCTAD Minimum Standards for Shipping Agents’ stops the agent from going to the local market to source foreign exchange to settle charges incurred by the vessel locally.
The ES who spoke through his Director, Legal Services, Mr Samuel Vongtao, identified such charges to be covered by the DAs as those collected by the Nigerian Ports Authority (NPA); Nigerian Maritime Administration and Safety Agency (NIMASA); ship chandelling costs and other local shipping costs.
Bello said such charges were usually in foreign exchange since “it is assumed that the principal must have wired the funds to the disbursement account of the agent in foreign exchange”.
According to him, it was left for the agents to make such payments in currency that was transferred to the disbursement account rather than going to the interbank market to source for foreign exchange.
He argued that in Nigeria, the practice was completely different, as “shipping agents apply to transfer all incomes to their principal while at the same time applying to Central Bank of Nigeria (CBN) for forex at interbank market rates to service local costs”.
Bello, expressed confidence that the CBN which had set up an Investigative Team that went to all banks to ascertained that there was not a single type of such account operated by any shipping agency in the country would change the narative.
However, CBN’s Deputy Director, Foreign Exchange Management, Trade & Exchange Department, Mr. A.S. Jibrin, said the idea of the meeting with the stakeholders was to ensure that the DA enjoys the support of those in the shipping industry.
Jibrin explained that what the CBN set out to do was to listen to the stakeholders on the DA, adding that the apex bank was interested in policies that will grow the shipping industry and the national economy.
He said that decisions on the policy could not have been taken without hearing from those in the industry.
Jibrin expressed happiness about the opinion being expressed at the meeting that the Disbursement Account should be introduced.
A former Director, Shipping Services of NSC, Mrs Dabney Shall-Holma, said the Disbursement Account when introduced will go a long way in improving the contributions of the shipping sector to the country’s gross domestic product (GDP).
While noting that the shipping sector was nearly absent or too low in terms of GDP contribution, Shall-Holma said that it was not good that shipping operators were not contributing enough to the economy.
At the meeting, stakeholders were dismayed that DA is yet to be introduced in the country considering the time that the idea was mooted.
Participants said the CBN and the NSC should move as fast as possible to ensure that the policy takes effect in Nigeria.
Among those who spoke in favour of having the DA in place were founder of National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Boniface Aniebonam; President of Association of Nigerian Licensed Customs Agents (ANLCA), Iju Tony Nwabunike; a member of the Nigerian Economic Group, Dr. Ikenna Nwosu; President of Nigerian Ship Chandlers Association, Dr, Martins Enebeli; former President of NAGAFF, Dr. Eugene Nweke, among others.
The stakeholders maintained that it was wrong that the shipping agents were sourcing foreign exchange locally to settle NPA, NIMASA and other dues when they ought to have sent such money from their foreign principals overseas.
Enebeli said Nigeria loses $4 billion annually over non-introduction of the Disbursement Account for all shipping agents, adding that such an amount can bring about huge multiplier effects in the industry and the economy.
The NSC had last year given its position on the DA to the CBN during the review of the new Forex Manual while the CBN had in April this year informed NSC of its acceptance of its position on DA.
It was, however, gathered that the meeting which was at the instance of NSC, was to ensure that the stakeholders buy into the council’s position so as to mitigate the impact of the provision on businesses and the attendant likely outcry of the operators.
UNCTAD was established in 1964 as a permanent inter-governmental body. It is the principal organ of the United Nations General Assembly dealing with trade, investment and development issues.