How We Have Repeatedly Helped Organizations to Resolve the Commonest Import Challenges in Nigeria
There are several import challenges faced by Nigeria, including:
The following are some of the import challenges in Nigeria:
- Customs regulations and procedures: Nigeria’s complex and frequently changing customs regulations and procedures can make it difficult for importers to comply with requirements, resulting in delays and added costs.
- High import tariffs: Nigeria imposes high import tariffs on a range of products, which can make imports more expensive and less competitive compared to domestically produced goods.
- Poor infrastructure: Nigeria’s transportation and logistics infrastructure, including roads, ports, and airports, is inadequate and often unreliable, which can result in delays and increased costs for importers.
- Currency fluctuations: Nigeria’s currency, the naira, is subject to frequent fluctuations, which can make it difficult for importers to accurately predict costs and plan their import operations.
- Corruption: Nigeria has a high level of corruption in its public and private sectors, which can create obstacles and additional costs for importers.
- Inefficient bureaucracy: Nigeria’s bureaucratic processes for importation can be lengthy and inefficient, with multiple agencies and departments involved in the process.
- Inadequate quality control: Nigeria’s import quality control measures are often inadequate, which can lead to the importation of substandard or unsafe products.
Nevertheless, importers ought to consult or engage import agents with the right expertise and pedigree to resolve their most typical challenges effectively. The following case study gives us a clearer picture of how these challenges could be resolved in a single transaction.
For instance, company XYZ is a pharmaceutical distribution company based in Nigeria. They intend to import a container load of conventional antibiotics from China into Nigeria. How can they achieve this objective without being trapped by the costly challenges associated with the import processes? Or being exposed to unanticipated costs during and even after such transactions?
The answer is simple. Finding a competent freight forwarding company/agent is the first step towards achieving this goal based on the following benefits:
Pre-Shipment Advice: A competent agent has excellent knowledge and understanding of the International Commercial Terms (INCOTERMS) applicable to the importation of a container load of conventional antibiotics and advises the importer well ahead of time. This eliminates potential conflicts and clearly defines who bears the risks involved and the shared responsibilities of both the importer and the agent in the transaction.
Also, a comprehensive understanding of end-to-end documentation, the required modes of transportation, and how to process them is key. Importantly, a good Knowledge of cost requirements and the ability to make a well-informed decision on end-to-end transaction cost with very thin or no margin for error is one the most important pre-shipment advice an importer should obtain prior to the importation of the said items. This helps importers to stay compliant and is rarely exposed to costly penalties or incurring unanticipated costs.
Accurate Documentation: A competent agent understands that the importation of a container load or container loads without incurring unanticipated costs or costly post-cargo clearance audit penalties requires perfect documentation. The question then is, what documents does one need to process or have in the entire process of shipping a container load of conventional antibiotics to avoid costly sanctions? The following documents are not only required but are expected to agree with the information captured in every other document connected to the specific import process:
- Bill of Lading: A Bill of Lading (BL or BOL) is a shipping contract document issued by an ocean carrier to a shipper/importer, with detail of the cargo being carried, including the name of the carrier, name of the consignee, detailed list of goods being transported, number of packages and the kind of packaging, weight and/or volume of the cargo, freight class, terms of payment and special handling instructions. Information captured in the Bill of Lading must match with those captured in the Form M, PAAR, Commercial Invoice, and the Packing list because even the minutest discrepancy will attract a penalty.
- NAFDAC e-Permit: National Agency for Food & Drug Administration and Control (NAFDAC) permits and registration certificates can be obtained electronically by importers of conventional antibiotics, like other medically related products. Only digital forms issued by NAFDAC are valid. The approval reference code stated on the NAFDAC permit is then inputted for the processing of Form-M, Pre-Arrival Assessment Report (PAAR).
- Form-M: This is a mandatory document generated electronically and approved by the Central Bank of Nigeria and the Nigerian Customs Service as the principal requirement for the importation of goods into Nigeria. The goal is to ensure that the appropriate import duty is paid for imported items based on the correct invoice value. Though a Form M is valid for 180 days, it must be processed before the shipment sails. In other words, the date on Form M should precede the date that the vessel sails.
- PAAR: This document is one of the critical requirements of the Nigerian Customs Services for clearing imported goods into Nigeria. As is the case with Form M, PAAR is usually processed by authorized commercial banks. It is a tool for accurate duty assessment and to ensure that the proper duty is determined or that the appropriate levies are paid.
- Commercial Invoice: This contains the full payment detail of the item being imported, including the importer’s reference number, description of goods, price per unit at a particular location, total quantity, total value, packing specifications, INCOTERMS of sale, name, and number of vessels conveying items, bill of lading number, place and country of origin, terms of payment, invoice validity period, VAT, approval signature etc.
- Packing List: A packing list is an important import document that provides detailed information about the goods imported to the clearing agents, the Nigerian Customs Service, and the importer/consignee. The list includes the gross weight of imported items. Forwarders can also use the information on the packing list to create the bills of lading for the items being imported.
The key consideration for the foregoing documents is that the general information on the imported item(s) must be consistent without any disparity, and they must also be in synch with the classification on the HS Code so that the right duty or levies can be determined.
HS Code: Harmonization Systems (HS) Codes contain numbers or codes that provide accurate descriptions and classification of the item(s) being imported. This is to ensure that the appropriate duty can be paid based on the designated percentage associated with such cargo.
However, the importation of drugs into Nigeria attracts 0% duty, but antibiotics or drugs that contain antibiotics attract up to 20% levy. Importers ought to be aware of these technicalities or at least consult experts for proper guidance to avoid costly sanctions.
In view of the foregoing, the benefits of hiring a competent freight forwarding agent like Fortune Global are many but specifically saves importers from the potentially high costs of shipping, unexpected delays, and technical mistakes in documentation. We are experts at providing pre-shipment advisory – including documentation, timely interface with regulatory authorities, and helping clients determine the required tariffs, duties, and levies associated with diverse shipments.