Nigeria Loses $2bn Annually to Informal Export Trade from Lagos Airport
Investigation by THISDAY has revealed that on the average, Nigeria loses about $2 billion annually to exports, which are not documented but exported informally as personal effects.
The investigation further revealed that the foreign exchange earned by the country does not reflect in government’s financial system.
It was learnt that so many products are exported from Nigeria, which are not captured in Form M, indicating that the foreign currencies earned are not documented because the export of the products do not follow acknowledged official channels.
This is because the general opinion is that products and produce from Nigeria do not meet European and American certification, so they are informally exported to individuals overseas as personal effects.
Personnel involved in the process who do not want their names in print told THISDAY the volume of such export from the Murtala Muhammed International Airport, Lagos is huge.
Cargo management expert and the Managing Director of Flights and Logistics Solutions Limited, Amos Akpan, said the informal export trade has been going on apparently to circumvent these cumbersome regulatory requirements.
He explained that when export trade is not captured by form M, there would be no record of foreign currency earned and there would be no documentation that meets global trade standards.
“Consequently, the agencies of government are unable to officially articulate a growth path for this category of business. This lapse negatively impacts on our overall performance in terms of export trade when our business performance is measured,” he said.
THISDAY investigation also revealed that some of the items shipped as export from Nigeria to West and Central African countries include household utensils/consumables, electronics, pharmaceuticals and most of them are manufactured in Nigeria, some imported and transshipped from Nigeria.
Akpan said: “The export warehouses at the cargo terminal of MMIA processes these export shipments as long as they are opened for business all year round. There are always 20 tons of cargo minimum per week to export from Lagos to each of the following cities: Kinshasa, Monrovia, Freetown, Conakry, Bamako, Brazzaville and Libreville. Some foreign airlines carry these as direct traffic from Lagos but document them as transshipment. All the agencies of government in the airport are part of these processes. These are not in the agencies records yet there are unofficial revenues in the process. We need to find a way to bring these into the official system. We should grow this informal trade and gain from its multiplier effect in our economy.”
THISDAY also learnt that there are other informal export trade building up through the intercontinental flights that depart MMIA Lagos daily to Europe, America, Asia, and UAE.
“Nigerians are sending cargo to their families and friends in Diaspora on every flight. About 10kg to 200kg per shipment consolidated by agents into three tons minimum per flight. That is three tons of export cargo on each international passengers flight that depart MMIA. These cargoes are for family consumptions, for African restaurants, African designed wearsand some test products for international market trials. Whether these foodstuff and produce meet the certification of destination countries is asubject for another discussion,” Akpan added.
He urged aviation agencies and other concerned authorities to capture this trend and articulate them as small private entrepreneurs with ability to impact the overall export trade performance, noting that “politics is involved in trade, so we input this as factor while we are discussing if our native foodstuff is fit for consumption abroad.”
“We should also note that we are taking in native foodstuffs from China and India, therefore reciprocity should be considered in selective cases.
I agree that we must encourage local processing of our agricultural produce and turn them into products so that we gain better value in the international market,” Akpan further said.
Reacting to this development, the Chief Executive Officer of Mainstream Cargo Limited, Seyi Adewale, said local and international trade laws are in favor of items categorized as ‘Personal Effect’, describing it as a liberal terminology that guides the ease of exportation for personal goods and belongings because the world needs to allow for ease of migration, transfer of residence and / or relocation.
“Therefore, many items are shipped under this broad category for favorable and tolerable customs clearing terms. It potentially shields the very strict export requirements of receiving country especially when it concerns perishables. I believe customs in the recipient countries allow tolerable amounts/ quantities since foreigners or people with foreign origins are used to certain foods that are not readily available in the host countries,” he explained.
Adewale said: “Even if these items find their way into local corner shops or open markets, the very strict legal and regulatory requirements are waived since most are ‘off record’ transactions and may not have same scrutiny that a supermarket requires to operate under legally. For example, do they know or attend to the shelf life requirements that a supermarket is mandated to comply with?
“So, exportation of these items under corporate or commercial transactions will be difficult due to the specification needs of the items especially perishables, the need for proper certification including traceability, test for harmful substances, pest or disease to avoid epidemics or infestations.
“Importantly, the receiving company, supermarkets, traders, or corporations need to meet their regulatory requirements, declare, get prior approval from food regulatory agencies and submit samples from time to time. This places huge burden and liability on this type of importers or consignee.”
However, travel expert and organiser of Akwaaba African Travel Market, Ambassador Ikechi Uko, noted that as long as the products and produce pass through cargo handling companies, they must reflect them in their books, adding that whichever way it is, there is significant disparity between imports and exports from Nigeria.
“A lot of cargoes are coming into the country. I see a lot of cargoes coming in more than the previous years. For example, one Ethiopian Airlines passenger flight comes to Nigeria but I also see two other Ethiopian planes and I later learnt that they are all bringing cargo to the country,” he said.