Ports of Pains, Delays and Costs

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Maritime

As another year dawns, stakeholders in the Nigerian economy share their

experience doing business in Nigerian ports in 2021, writes Dike Onwuamaeze

Costs of doing business in Nigerian ports has become a painful experience for exporters, importers and clearing agents. Port users

always have one tale of woe or more because of the delays and excessive charges they experience in the course of clearing their cargoes. Those in the pharmaceutical industrial sub-sector, who are involved in the importation of sensitive raw materials and finished products often discover to their own chagrin that the condition of goods might have been compromised due to temperature excursions.

Last week, the Chairman of the Organised Private Sector of Nigeria (OPSN), Mr. Taiwo Adeniyi, told THISDAY that what port users encountered at the port is like an equivalent of a war experience.

Adeniyi identified the difficulty at taken goods out of the port as one the major impediments to industrialisation in the country. “We call on the government to do everything possible to remove all of these impediments affecting ability do business in this country, like the issue around our ports. Even when you struggle to bring in materials, it is war at the port to get it out. The NCS is always like never wishing us to clear our goods at the time meant for it.”

Speaking in the same vein, the Director General of the Manufacturers Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, harped on the provision of adequate port facilities and removal of traffic gridlock around the ports.

Ajayi-Kadir noted that the poor state of Tin Can and Apapa Ports’ facilities in Lagos State and the menace of traffic gridlock in that axis constitute major impediments to manufacturing activities and trade facilitation and remained enormous cost in time and money for

import and export.

He urged government to take immediate steps to remove this menace and suggested that representatives of the OPSN be included in the constitution of the members of the Taskforce on the Lagos Ports. “There should be a structured platform where stakeholders (public and private sectors) will be able to assess the level of implementation, demand full compliance, provide vital information and evidence on the direct impact of this initiative. Clearly, this will engender more creativity in proferring solutions and ensure the buy-in of all major stakeholders,” Ajayi-Kadir told THISDAY.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprises (CPPE), Dr. Muda Yusuf, stated recently that there is an urgent need to ease the cargo clearing processes at the country’s ports, which, he identified, as a major component of ease of doing business that President Muhammadu Buhari’s administration has expressed commitment.

Yusuf suggested the reduction of the number of agencies involved in cargo clearing at our ports and the need to deploy technology to aid the customs clearing process, especially the use of scanner that is particularly very important.

He noted that “it is a sad commentary that the largest economy in Africa has been examining cargo and containers physically and manually for the past few years. The effect of this on the cost of import has been humongous. The interest payment on the import, demurrage charges arising from delays, the extra charges by shipping companies, the additional charges by the truck drivers, all of these have put a lot of burden on investors and citizens.

“We should expedite action on the single window system in order to minimise human interface at the ports.”

He also emphasised the urgent need to review the current call up system with a view to making it efficient and less vulnerable to corruption and extortion.

“We need to put a credible independent dispute resolution system in place in order to resolve dispute between the custom service and importers.

“The involvement of the police in the clearance of cargo should be discontinued. We should compel shipping companies and terminal operators to increase efficiency in their processes and provide the needed cargo handling equipment to expedite the clearance of cargo,” Yusuf said.

He told THISDAY that, “if the Apapa traffic gridlock continues, our international trade process stands the risk of being completely paralysed.

“The Apapa corridor accounts for an estimated 70 per cent of international merchandise trade-imports and exports. Therefore, this portends disturbing signals for the outlook for Nigeria’s participation in the AFCFTA. It is impossible to undertake any meaningful trade without an efficient maritime logistics chain.”

The Director General of the Institute of Director (IoD) Nigeria, Mr. Dele Alimi, told THISDAY last year that the gridlock at Apapa seemed to be a problem that has defied all solutions proffered by previous and current administrations.

Alani said that various attempts by government at both the federal and state levels have remained insufficient to resolve the problem.

“Incidentally, none of these seem to have remedied the situation. What this brings to fore is the need to actually identify the root cause of the problem and see if the solution would be deeper than just proffering cosmetic solutions that are only addressing the symptoms.

“You will recall that the traffic gridlock started almost immediately after the privatisation of the facilities in the Apapa port area. The first question that comes to mind is, ‘what happened to all the parking facilities that accommodated these vehicles before now?’ Did they just disappear? If they did not, why are they no longer available to accommodate these vehicles that have now resorted to parking on the road? That is one aspect of it.”

The second is the need to evolve a more comprehensive approach, which should address the concentration of port activities in Lagos, with other ports in Nigeria wasting away from low patronage or lack of patronage.

He pointed out that government should found out the things that could have been done in the past, almost 10 years ago, to address the inadequacies of these ports and made them able to receive the cargoes that are all directed to Lagos.

“It is, therefore, important to address the issue from these viewpoints. What is not in doubt is that the gridlock in Apapa has adversely affected businesses. As usual some Nigerians have turned it into an illicit cash-cow, where all sorts of evils are perpetrated.

“These people have now turned themselves into cartel that are now protecting their ‘interests’ and ensuring that no solution proffered solves the problem.

“The users of the port have struggled with many problems directly associated with the gridlock. From the high cost of doing business connected with corruption inherent in the system at the port and its immediate environment to the value time lost efforts of vehicles to manoveur the traffic.”

NECA’s Perspective

The Nigeria Employers’ Consultative Association (NECA) told THISDAY in 2021 that it is worried over the the perpetual blockage of roads in Apapa.

The association observed that Apapa axis is one of the major avenues for revenue generation and economic growth for the country. Thus, it would have been expected that government would give it the attention it deserves. However, businesses and Nigerians constantly groan and are trapped in their efforts at carrying out business activities within the axis.

It said: “We recalled government’s efforts to address the gridlock in Apapa axis, its working with Nigeria Ports Authority on the e-call-up system, etc. This was greeted with excitement and huge expectations.

However, the gridlock appears to be worse by the day.

“The consequences of the Apapa traffic gridlock on businesses, especially those involved in the importation of sensitive raw materials and finished products, including pharmaceuticals, can only be imagined.”

“Another challenge is the increased freight costs from transporters due to the significant down time of their vehicles caused by the gridlock. This is a major cause of the rising cases of abandoned containers and imports at the ports.

“Though, we commended the on-going efforts by the government to clear the Apapa ports congestions, we call on government to take urgent steps to stem the dire economic hardships that companies are going through in the Apapa axis.

“Also, we urge government to consider train services within Apapa axis and from Apapa to other parts of the country. The positive economicm mimplication of the rail system will be enormous as it will enable the freighting of consumer goods and refined petroleum products via the rail track from the port to the hinterland and other parts of the country which will resolve the perennial gridlock caused by the craters on the road. There will also be a reduction in the sheer volume of articulated passenger and goods vehicles that ply the roads to/fro and within Apapa axis, thus leading to increased lifespan of the roads and a reduction in the loss of lives from accidents that occur on a regular basis.

“We urge government not to lack the political and economic will to tackle this national menace, which is affecting our developmental growth as a nation.”

Some of the identified problems in cargo clearance are the presence of multiple government agencies in the ports, money transfer delay between financial institutions, cargo discharge delay at port terminal and storage facilities, customs physical examination process and false declaration by importers.

The Comptroller-General of NCS, Colonel Hameed Ali (Rtd), attributed delays in cargo inspection to the habits of importers and agents to make false declaration.

Ali said: “The problem we have is with non-compliant traders. That causes unnecessary delay at the point of examination.

“NCS officials do not witch hunt; in no way do we feel that traders should be made to suffer because we also are consumers in the market.

We expect importers, exporters and agents to be honest and transparent in their activities because it makes our jobs easier.

“The amount of time they spend in the ports by importers who are compliant is extremely short, from when assessment is done and payment

is made, and goods moved to the customs zone.”