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LCCI: How Nigeria can be Competitive in AfCFTA

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The Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, has said that for the country to be relevant in the African Continental Free Trade Agreement, it needs to be competitive.

He disclosed this in Lagos on Thursday.

While underscoring the importance of competitiveness in AfCFTA, Yusuf stressed that this is the very foundation of any conversation about trade because those engaging in it, whether within or outside the country, have no sentiment about it.

He argued that if what one is providing is not competitive in price, it is of no relevance because the consumer is not interested in whether it is made-in-Nigeria or not.

“What one is interested in, is how he or she can maximise what we call ‘utility’ in economics, how he can maximise or benefit from the little money he wants to spend. So, that is why the emphasis has to be on how we can make ourselves competitive,” he said.

The LCCI boss recalled that the manufacturing sector kicked against AfCFTA, hence Nigeria was one of the last to ratify the agreement. 

“They have looked at all the things around them and said as far as production is concerned, there is no way they can compete. And you can’t blame them because you are the investor, you have committed capital, you have imported machines, have a lot of assets, many of them immovable and you put all these investments in place based on specific competitiveness assumptions.”

Yusuf, however, added that the parameters for the competitiveness have begun to change.

His words, “You have looked at the market, you have done some competitive analysis and said yes, this investment will fly. Now the assumptions have changed, the competition parameter is now changing; you are now facing new competitors.

Meanwhile, the domestic environment has not changed, your tax environment has not changed, the port environment has not changed, the cost of funds, the regulations, the lending and all of that. The infrastructure issues are still there. So, it is a dangerous challenge.

“We have already ratified and so, hopefully and prayerfully, there will be no going back so that we don’t have the kind of thing we have in Brexit, after UK joined and said it is pulling out. I pray we are not going to get there because a whole lot of countries are much better prepared.

MUDA YUSUF, DG LCCI

“It was because of this preparedness issue in 2018, that the President set up a Readiness and Impact Assessment Committee when the manufacturers  complained to know what exactly was needed to ensure that we are better prepared; to ensure that our stakeholders and investors can be part of this system and also benefit from the continental market.”

Yusuf said although the committee had done its investigations and submitted its report, nothing had changed.

“The committee was set up to look at the readiness issues, the committee submitted its report on readiness issues around the ports, around the aviation, road, power and around all the problems that investors are facing. The report has been submitted, the situation has not changed, nothing is even happening, the situation is even getting worse,” he stressed.

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Maritime

NSC, NPA at War with PTOL over Rate Increment

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From all indications, a confrontation may be brewing between the management of  Nigerian Shippers’ Council, the Nigerian Ports Authority, and  terminal operator, Port and Terminal Operators Limited, over increment in terminal handling charges.

The NSC and NPA had, in a meeting on Thursday in Lagos, asked the PTOL to reverse its recent rates increase or face sanctions.

In the meeting, the NSC – as the economic regulator – noted that the increment was arbitrary and without due consultation with relevant stakeholders, including the regulatory authorities.

Both agencies advised PTOL to present its proposed increases for negotiation through official channels as soon as possible, a statement by the NSC’s Head of Public Relations, Rakiya Zubairu, noted.

According to NSC’s Ag Executive Secretary, Ms Ifeoma Ezedinma, who convened the meeting, such act will attract sanctions because the agency, through public notices, visits and correspondences, always advises regulated service providers to adhere to the law.

Citing breach of Clause 5:5 of her agency’s lease agreement with PTOL, the NPA General Manager (Monitoring and Regulatory Service), Mrs Ugo Madubuike, reminded the terminal operator that “the lessee shall not make any increase in the operation rate unless agreed to in writing by the parties and any required persons or governmental authority.”

Also, the NSC Director, Consumer Affairs, Cajetan Agu, asked the terminal operator to revert to its old rates until due process is followed, as its actions contravened its lease contract and violated the NSC Act.

Likewise, the Director, Legal Services Department of NSC, Tahir Idris, advised PTOL to obtain documents on the agency’s legal framework to acquaint itself with the regulatory procedures of tariff increase and to be guided on right protocol.

Meanwhile, PTOL General Manager, Macpherson Nwaukoni, has apologised for the oversight in implementing the new tariff regime, stating that the company took the decision because it was incurring much operational losses.

He attributed the losses to the country’s ban on certain import items, making the company unable to meet its obligations, especially rental debt to the lessor. He appealed for leniency, as PTOL had not increased charges in 16 years and was currently running at a loss.

Nwaukoni explained that in comparison, his company’s rates are much lower than the charges by other terminals, and all these factors have made their operations difficult and prompted the 15-30 per cent raise in tariff.

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