The ultimate cost of imports into our country is composed of the following:
Free on Board (‘FOB’): The actual cost of the goods the importer in Nigeria pays the exporter for the goods and its delivery to exporting ship.
Freight: The cost of shipping the goods from the exporting country to Nigeria.
Insurance: The insurance premium paid by the importer to cover particular risks from, say, the exporting warehouse to your local warehouse.
Customs clearing: This includes import duties and levies charged by Nigeria Customs Services on behalf of the Federal government and some other Agencies as well, for the importation of particular goods.
Clearing charges: This includes shipping company and terminal charges as well as clearing fees paid to clearing agents.
Whilst the FOB, freight, Insurance and Customs clearing charges can be fixed for most items at a particular time of importation, the shipping and terminal charges vary. The latter two charges are paid per day depending on how long it takes you to clear your consignment as well as return shipping containers to the shipping company terminal. Any delays in clearing your goods and returning the containers to the shipping company attracts demurrage to you. The congestion at our major ports is extremely costly to importers. They either have to suffer losses or the consumer has to bear the brunt! For as long as we shall continue to import, we need efficient clearing systems and delivery and evacuation networks into and out of our ports. The ports and associated businesses generate substantial revenues for the government. Whatever is spent on the ports and their road and rail linkages shall be a worthy investment.
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Feature photo credit: Photo by Fancycrave on Unsplash
