Piles of containers
Disagreement between customs agents’ regulatory agency, Council for the Regulation of Freight Forwarding in Nigeria (CRFFN), and the leadership of associations of freight forwarders over sharing formula for practising fees to be collected from practitioners at the ports has forced the Minister of Transport Senator Idris Umar to suspend the revenue generating exercise. Francis Ugwoke reports on the politics of sharing the billions of naira revenue expected from every cargo that passes through the air and seaports
After years of calm, customs agents appear to be up in arms again. The bone of contention is the Transactional Fee recently approved by the Minister of Transport Senator Idris Umar to be paid by every agent that clears any container or vehicle at the nation’s seaports or airports. The payment of the fee is expected to boost the finances of the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) and associations of customs agents, notably, the Association of Nigerian Licensed Customs Agents (ANLCA), National Association of Government Approved Freight Forwarders (NAGAFF) as lead associations for agents and others. The fee was approved in July to take effect in September, but was suspended recently following a disagreement between the associations and the regulatory agency on the sharing formula. The CRFFN as a regulatory agency for freight forwarders sees the fee simply as its own and wants to determine what should be given to other associations. But this is being resisted by the leadership of ANLCA which is seeking an equal sharing formula, apparently because the money is coming from mainly its members. ANLCA plans to go to court to stop any sharing formula that does not favour it. But ANLCA appears to be alone. Three new associations are not in support of ANLCA and may be ready for anything they can get. The associations include the National Council for Managing Directors of Customs Agents (NCMDCA), Association of Registered Freight Forwarders of Nigeria (AREFFN), and Nigerian Association of Air Freight Forwarders (NAFFAC). This is simply to spite the leadership of ANLCA and NAGAFF, which are bigger associations. And the reasons are obvious. Some ANLCA members were accused of frustrating the early registration of these associations by CRFFN because of their domineering role in the
Council. NAGAFF also had the same problem, until the leadership used every available resources and forces to achieve its registration.
Transactional Fee from Ports
Transactional fee is simply membership fee or practising fee from members of associations of customs agents like any another professional body. Perhaps this explains why ANLCA has been bitter that CRFFN wants to collect this money and place the associations on subvention for money that is coming from members. If a practising fee is collected from every container coming into the country, the money will run into several billions of Naira, one of the reasons why there is so much interest among various associations and the regulatory body. What is being proposed is N2, 000 for 40ft container, N1, 000 for 20ft container and N500 for every car and N1, 000 for trucks.
Over the years, associations of agents had relied on practising fees from members to run their affairs. But getting this money has not been easy because members who pay claim lack of accountability. Most times, the agents don’t pay these dues, and leaders have had to rely on donations from wealthy members to run the association. This explains why in the past paying the salaries of workers of the associations, particularly ANLCA was very difficult. At a time they were owed months of salaries. It was to address this that the leadership of ANLCA and some other agents came up with the idea to be collecting practising fees from members. But this idea came at a time that the CRFFN also needed funding from associations and agents to run its affairs. CRFFN as a regulatory agency is privately driven. It is not a government funded agency, and that is the problem it has been having with funding. While other regulatory agencies get
their funding either directly from ports sources or subventions from government, CRFFN is in the cold relying on agents to stay afloat. And this is through collection of dues according to the law establishing it.
Efforts by JACOFF to Collect Practising Fee
Sometime last year, leaders of ANLCA, NAGAFF and some prominent leaders of agents formed what was known as Joint Action Committee of Freight Forwarders (JACOFF). The Committee set out to collect practising fees from agents who had goods to clear at the ports. Those behind JACOFF and the practising fee argued that the idea was to equip the various associations to be in a position to have funding to run their affairs instead of being crippled by funds. But aggrieved influential leaders of customs agents who felt they were not part of the arrangement moved to stop the exercise. The leaders moved round the ports asking agents to ignore JACOFF. Following this conflict, those who were not ready to pay the fee became happy that the exercise failed. The result is that most leaders of associations find it difficult to pay their staff. Some of the associations exist only by name, and have no good structure.
CRFFN’s Funding Nightmare
At the take-off few years back, CRFFN relied on subventions from the Ministry of Transport. The money was enough and the leaders were able to tidy up a lot of things while in office. They traveled from one country to the other to study freight forwarding regulations. They also set up offices, and bought good cars for officials, including council members. But for failing to register NAGAFF and some of its members, the regulatory agency was attacked from all fronts. NAGAFF faulted the subvention being enjoyed from the Ministry. The association called for accountability and was pushing the matter seriously until the leadership of CRFFN decided to appease them by according them all the registration requirements. Now, both the founder of NAGAFF, Dr. Boniface Aniebonam and the President of NAGAF, Mr. Eugene Nweke was given fellowship of the Council, an equal treatment given to some leaders of ANLCA. Nweke is also a council member of
CRFFN. In addition, NAGAFF, an association that emerged following crisis in ANLCA above 11 years ago, is rated by CRFFN as equal to ANLCA.
This has in turn shut them up, and while ANLCA is busy fighting CRFFN, NAGAFF has been watching carefully. Although, the President of NAGAFF, Nweke told THISDAY that the association holds the same position with ANLCA as far as the issue of transactional fee is concerned.
However, the subvention from the Ministry was stopped as a result of the protests from NAGAFF and its leaders on this matter. NAGAFF had protested that CRFFN had been hijacked by the Ministry of Transport which treated it as a parastatal. The association had written to the National Assembly, including the Ministry of Finance and the Presidency over this matter, before the subvention was stopped. The result has been devastating for CRFFN, one of the reasons why it is relying on the latest funding arrangement to survive. It was gathered that the council has been finding it difficult to pay staff salaries and other logistics.
The Sharing Formula
At a meeting to discuss the sharing formula, CRFFN came up with the idea of 70 per cent for the council, 20 per cent for the associations, and 10 percent to take care of special needs of the key functionaries of associations. The question being asked by some critics is: who are being referred to as key functionaries of associations? Is the council referring to the leaders of the associations? An unconfirmed source said this appears so, but added that time shall tell. On the other hand, the leadership of ANLCA proposed 40 percent for the associations and 60 percent for the CRFFN. The regulatory agency was later to say that it will only give out subventions to the associations instead of sharing anything with them. The negotiation was deadlocked. So far, the three new associations, it was gathered, are in support of CRFFN, apparently for registering them, while ANLCA and NAGAFF are on the other side.
Plans to Resolve Clash of Interest
A member of the council who pleaded anonymity said that CRFFN and associations of agents will find it difficult to operate without the collection of practising fees from agents. The suspension for the take-off, it was gathered, came to both CRFFN and the associations as a shock. Training of manpower and other logistics will suffer if no agent pays practising fee. It was in consideration that some leaders of the agents, including CRFFN have been meeting secretly to reconcile their differences on the issue. At one of such meetings, it was gathered that the leadership of ANLCA and NAGAFF reminded members of the Governing Council that their membership of the board had expired since August, and insisted that they should leave before negotiation on the sharing formula continues.
Members of the board had obtained an extension of their tenure by six months from the Minister of Transport, Senator Idris Umar. A source said that both associations are waiting for members of the Governing Board of CRFFN to leave before moving ahead for further negotiation on the sharing formula. However, the question is whether the Transport Minister will reverse himself on the approval granted the CRFFN board members for the extension of their tenure or will allow them to stay for more six months. This is however contrary to the provisions of the Act establishing CRFFN on tenure of board members. .