LCCI advocates change in Nigerian import trade act from CIF to FOB

By Dapo Olawuni |

The Freight Forwarders Group of the Lagos Chamber of Commerce and Industries (LCCI) has called on the Federal Government to bring up a policy that would change Nigeria’s Import Trade Act from Cost Insurance and Freight (CIF) to Free on Board (FOB)

Deputy Chairman of the group, Mr Las Alli Shobande in a recent chat with our correspondent said that making this move would draw more shipping lines to come and establish in Nigeria because freight rates would no longer be paid abroad until the cargoes arrive safely in Nigeria.

Alli said that this is the usual practice in other advanced countries.

He stressed that if the federal government invoke changes in the trade policies, importers would only pay for cost of the goods abroad, the freight rates would still remain in Nigeria and would be paid in Naira.

Speaking, he said “We still want government to look into our Trade Act, goods should be FOB (Free On Board) not CIF (Cost Insurance and Freight) if goods are FOB and we start paying for our LC’s on FOB basis, you would find out that shipping lines would come to Nigeria”

“You would have the privilege of determining who carries your goods, and when you are paying for your goods, you only pay the cost of the goods to your manufacturer or supplier, you don’t give him the cost of the freight in advance”

“Under the present arrangement, we are paying too much, so in addition to the cost of goods which we import, we are also paying for cost of freight into the pockets of these suppliers, and in arranging your shipment, the suppliers would not negotiate the best freight rates for you”

“If we change our trade policies, you would only pay for the goods, the freight rates would still remain here in Nigeria and we can pay it in Naira, freight charges are horrendous, so we should not be taking it out, it is like capital flight”

Currently we are operating CF because insurance have managed to fight for many years to have their dues paid locally, so now it is Cost and Freight (CF) as it is now, it shouldn’t be so, if you get an invoice to do your LC, it is cost and freight”

“If you hold the freight back, you are creating business here in Nigeria, freight companies would be forced to talk to local companies in Nigeria” Alli stated.