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Experts want Buhari to review Dry Cargo Inspectors’ Contract

By BusinessNews Staff on July 25, 2015

Experts in the export market as well as procurement professionals have faulted the selection of Pre-Shipment Inspection Agents (PIAs) by the Federal Ministry of Finance, calling it a sham shrouded in secrecy that is likely to undermine the national economy and the change agenda of President Muhammadu Buhari.
At a one day Forum to appraise Nigeria’s exports performance organised by some Civil Society Groups in collaboration with Procurement Observation and Advocacy Initiative (PRADIN) in Abuja, it was observed that Nigeria’s pre-shipment activities had not been transparent.
Speaking at the occasion, national coordinator, PRADIN, Mohammed Attah, noted that evidence abounds that several firms that do not have the legal authority and professional capacity to conduct pre-shipment inspection have been engaged in the past. Without providing the necessary basic information to the appropriate quarters.
The Pre-shipment Inspection of Export Act 1996 makes provisions for the inspection of goods from Nigeria prior to their shipment to any place outside the country. All export products including oil, gas and non-oil goods except for a few are required to be inspected by a government appointed ‘Agent’ and a certificate issued before such product can leave the shores of Nigeria.
In pursuance of the scheme, the Federal Ministry of Finance established the Nigerian Export Supervision Scheme (NESS) which is responsible for appraising and recommending the appointment of inspectors subject to the approval of the President. It should be noted that pre-shipment inspection is a highly specialised field which require only professionals and experts services.
The export pre-shipment of goods from Nigeria is said to have started under the Late Gen. Sani Abacha’s regime but gained prominence under former President Olusegun Obasanjo’s administration where the appointed inspectors periodically provide data to the federal government on export performance of the country.
It was primarily to determine the quantity and quality of products leaving Nigeria and also a platform for exchange control for the country, providing the federal government with information on how much is coming into the Nigerian economy. The funds generated are supposed to be kept with the Central Bank of Nigeria (CBN) and the apex bank will in return give a percentage to the export inspector’s.
Reading from the reports of the federal government appointed lead consultant who provides technical support for critical sectors of the economy, Mc Kinsey and Company, experts say the relatively unknown multi billion naira scheme is a good policy of government that is being handled unprofessionally to the detriment of the country’s economy.

According to sources, Cobalt International Services, a certified international pre-shipment inspector was engaged by the finance ministry under the Olusegun Obasanjo’s administration to carry out the inspection and surveillance. Sources say that during the period between the time they were appointed and the year 2014, total cargo inspected increased the revenue of dry cargo exports from $100 million to $2 billion through the enforcement of compliance with the Act. Despite the performance of the regime under this agent, Dr. Ngozi Okonjo-Iweala decided to appoint additional inspectors against professional advice by Messr Mc Kinsey. Source in the ministry disclosed that the former of the minister of finance and coordinating minster economy recommended additional agents for approval to the former President, in May 2015 after the loss of the general election by then President Goodluck Jonathan. The favoured companies include Neroli Technologies Ltd, Carmine Asserye Ltd and others.

Experts who spoke at the forum faulted the last minute decision to split the contract noting that it was done not only to favour a group of cronies of the former minister, but to tie the hands of President Buhari.

According to Attah, the splitting of the contract was not done with the best of intentions, emphasizing that it will deny the federal government access to relevant data on the value of export leaving Nigeria’s shores. This will make planning impossible and undermine the capacity of federal government to develop the country

In his contribution, Yusuf Abubakar, an expert in dry cargo business collaborated Attah’s statement adding that the motive behind the splitting is not good for the revenue drive of the federal government “The effect of that is that the nation does not have an accurate information on the total value of exports from the country as conflicting reports are sent to the supervising agencies”, he noted.

Sources say the Buhari administration on sensing the irregularities in the appointment of the new inspectors, cancelled the contract of pre-shipment inspectors in respect of the oil sector unaware of the subsisting contracts covering the dry cargo sector of the pre-shipment scheme. The implication of this development is that while President Buhari has cancelled the pre-shipment of the oil sector, Oknojo-Iweala’s cronies are holding sway in the dry cargo sector

At the forum, most experts were of the view that President Buhari should commence the review of all contracts in respect of the pre-shipment scheme awarded under the former minister of finance, especially to ascertain whether the new firms were duly registered to carry on the inspection activities as well as determining whether they have paid up all taxes and annual dues to the federal government which are preconditions to carrying out contracts under the government.

In addition, they also alleged that the officials of the ministry of finance may not have briefed the former president on the bidding process that led to the contract awarded to these companies, adding that this may have misled President Jonathan approving the contracts of some of the unqualified agents.

Reports of Nigeria’s exports performance was supposed to be delivered to the president on monthly bases showing the performance of the various sectors of the Nigerian economy in the area of actual products exported and to which country.
It is said that the information available helps the president in his bilateral and multilateral engagements across the world which is vital to woo investors to Nigeria.

Participants were particularly worried that the federal government’s drive to improve productivity in the non-oil sector especially mining and agriculture may be unattractive to investors if the process of inspection remains opaque, urging the Buhari administration to make pragmatic effort to correct the abnormities in the export industry.

[ThisDay]

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