Report:  Corruption, Others Lead to Revenue Losses at Ports


Eromosele Abiodun

Corruption and exercise of discretionary powers by the Nigeria Customs Service (NCS) and port officials has had huge implications for ease of doing business in Nigerian seaports and terminals, leading to revenue loss of as much as about N2.5 trillion corporate revenue in the ports industry annually, a report by Integrity Organisation Limited, GTE and its private sector facing arm, Convention on Business Integrity (CBi), has revealed.

Integrity Organisation Limited is an anti-corruption research, advocacy and consulting organisation concerned with issues of accountability and transparency in public and business life. 

The report, which was jointly funded by ActionAid and UK Aid, revealed that  negative operational elements had pushed many customers to now use ports and terminals of neighbouring countries, thereby leading to loss of foreign exchange earnings for Nigeria.

The report further stated that capacity utilisation stands at between 38 and 40 per cent, adding that approximately 40 per cent of businesses located around the ports communities have either relocated to other areas, scaled down operations or completely closed down.

According to the report, “Customs officials have enormous discretionary power and this can easily be exploited for pecuniary gains including gratifications and bribes. Customs officials and port officers have influence on ports operations by law and function in the bureaucracy which they can manipulate as either enablers or disablers depending on interests per time. 

“For Customs officials, for instance, the fact that they have full information on shipments, shippers and have the powers of assessments and valuation make them able to manipulate ports processes if they so desire.

“Customs officials and port operators function at the supply side of the system and are very influential in manipulating the system for and/or against the demand side of port users. 

“Even though not as statutorily discretionary as Customs officers, port officials like port gate officials, stevedores, document clerks, and scanner agents also have influence on the demand side and can manipulate the system in manners that trade-off efficiency.

“Ports and terminal officials enjoy exercise of wide discretionary powers even when these are in conflict with the legal procedures and processes. These discretionary powers are sometimes indiscriminate, bridge port processes, lead to bottlenecks and create fertile ground for corruption and graft and the procedures become convoluted. 

“Often, such exercise of discretion creates opportunities for outright graft and extortion of port users. Poor infrastructures and inefficiency cause delay in port processes and create administrative and clearing bottlenecks which make the ports/terminals prohibitive to legitimate businesses.”

The report pointed out that grievance mechanisms are available at the ports but some customers are not aware of these mechanisms. 

It stated, “For those who are aware of the availability, most of them have never used the mechanisms. Even in the case of grievances, customers often choose not to complain because they perceive the process as subjective. 

“There is perceived weak enforcement and poor investigative structures and ineffectiveness in the case of complaints/feedbacks. Port users do not have total trust in the complaints/feedback mechanisms as they consider the mechanisms part of the problematic processes. There is also the belief that the mechanisms will always lead to backlashes.”

“The problem is not about relevant policies, frameworks or government order and pronouncement but compliance. Even when authorities put relevant policies in place, compliance and enforcement is poor. Port officers/officials appear too strategically and creatively powerful that they manipulate the system and port operations with unwavering exercise of discretions against the rules even when this makes doing business at the ports difficult, “it stated. 

The report recommended that the government needed to empower Nigerian Ports Authority (NPA) to be able to maintain effective oversight on all officials and officers at the port. 

“The NPA should be able to sanction non-compliance and exercise of discretions directly and indirectly. There is also the need to empower customers to report corruption and inefficiency directly to the highest level beyond the ports in way that will prevent witch-haunting and backlashes. 

“Customers should become strategic partners in enforcement/compliance and driving anti-corruption. Officials still exercise discretionary powers and perpetrate corruptions without fear of consequences, “it stated.

‘Favourable Aviation Policies, Key to Sustainable Economic Growth’

Chinedu Eze

 The Regional Vice President, Africa and Middle East, International Air Transport Association (IATA), Muhammad Albakri, has said African governments and industry leaders must not lose sight of the importance of air connectivity between the nations of region to the continent’s economic development and social well-being. 

Albakri, noted that for decades, organisations such as IATA, the International Civil Aviation Organisation (ICAO), the African Union (AU) and its predecessor, the Organisation for African Unity (OAU), had been advocating and lobbying governments to implement regulations to enable aviation to fulfil its potential in promoting sustainable economic growth, supporting trade, social development and in closing the poverty gap in Africa.

He said Africa would achieve that if the region’s nations could fully embrace the Single Africa Air Transport Market (SAATM), which was announced by the AU last year, and Visa-free travel for Africans in Africa, which he described as two critical enabling policy instruments that would breathe life into and underpin the Africa Continental Free Trade Area (AfCFTA). 

According to Albakri, together, these treaties represent a great opportunity for the continent’s leaders to grasp the mettle and make changes for the broadest benefit.   

“Every AU member state pledged their commitment to the creation of the AfCFTA, SAATM and Visa-free travel. Yet when it comes to putting in the hard yards and implementing them, too many nations are missing in action. 

“To date, only 28 AU members have signed the SAATM treaty and of these only nine have adopted it as law. 

“Similarly, more states need to ratify the AU free movement protocol to which they agreed in 2018. So far, just Mali, Niger, Rwanda and Sao Tome & Principe have done so. Fifteen are needed for it to become operational. This will pave the way for the reality of the “single African passport” – for all citizens, not just diplomats – and improve intra-African trade as a part of the AU’s Agenda 2063,” he remarked.

Albakri, also observed that despite the obvious benefits, to all intents, most of Africa’s skies, economies and borders remained closed to their neighbours, adding that distances that should take a few hours to traverse take days because the connectivity doesn’t exist. 

He regretted that the unfavorable reality has made it that travelling from one Africa destination to another via Europe was “normal”.

“For example, it is impossible to take a direct airline flight between Algeria to Cameroon (the same distance as UK-Greece). The fastest route is via Paris and takes eleven hours,” he noted.

He noted that such inefficiencies have economic costs, starting that trade and tourism are hindered while opportunities for investment and jobs are denied. 

“A recent study commissioned by IATA showed that an additional 155,000 jobs and $1.3 billion in annual GDP would be created if just 12 key African countries opened their markets and increased connectivity.

“A second benefit would be increasing intra-African trade, which remains dismally low at less than 15 per cent of the continent’s total trade. This is well below figures for Europe (70 per cent) and Asia (60 per cent). 

“AfCFTA has the potential to boost intra-Africa trade by 52 per cent once African countries eliminate import duties and non-tariff barriers,” Albakri said.