21 March 2018, Sweetcrude, Lagos — The Director-General of the Lagos Chamber of Commerce and Industry, LCCI, Mr. Muda Yusuf yesterday, has said that inappropriate policies have led to non- compliance with the country’s trade laws.
Speaking at Seminar ‘International/Domestic trade laws, guidelines, and regulation: benefits of compliance by the trading community’, Muda Yusuf said that too many documentation does not add values to processes and procedures of trade laws.
Yusuf explained that when a policy is inappropriate, the compliance level of trade law will be low thereby making nonsense of the law.
He also said that weak moral obligation, low probability of being arrested or detected and the high price differentials are some of the key drivers of non-compliance of the country’s trade laws.
He said “benefits of compliance is good for the economy especially the local industries, good for government revenue, job creation, provides a level playing field for all, good for the safety of lives and property.
“Studies have shown that the following key elements are very critical in ensuring compliance with any regulation or laws: legitimacy, fairness, and appropriateness of regulation, severity, and certainty of sanctions, cost of compliance, capacity to comply and sense of moral duty and agreement with given regulation.
“High price differentials between Nigeria and neighbouring countries creates a problem of smuggling on export and import and excessive documentation.
“When tariffs are too high and domestic production is weak in a high demand environment, compliance and enforcement become an issue.
“Import restriction in the face of weak domestic production capacity, the high cost of production and high domestic demand pose a major risk of compliance”.
He, however, suggested that sustainable trade policies and use of technology in the trade management process will not only enhance compliance to trade laws but scale up the capacity of relevant institutions that are involved in the enforcement of trade laws.
Yusuf also suggested that the discretionary powers of officials in the trade management process be reduced adding procedures and documentation processes be simplified.
He called on the government to improve the business environment to make domestic production competitive in price and in quality.
“Enhance the welfare of officers managing international trade process and have better funding for regulatory and enforcement institutions“.