Dilemma of Nigerian Exporters

Eromosele Abiodun examines the importance of non-oil exports to the economy and the negative impact of the deplorable state of Apapa access roads to export promotion

The very important roles export plays in an economy include but not limited to increase productivity, provision of employment, improvement of trade balance and expansion of growth of a nation’s economy.

Given the current economic situation, the diversification of the economy from oil to non-oil export is imperative. This is currently the focus of the federal government. The government wants the development of non-oil export process that is expected to play significant role in revamping the ailing economy. But to make exports to be one of the mainstays of the Nigerian economy, the ports will play a vital role.

This is because the sea is the medium through which goods originating from and destined for different parts of the world are transported.

Overtime, the maritime industry has substantially changed from an industry that was always international in its character to a truly global entity with routes that span across hemispheres, transporting raw materials, parts and finished goods. Maritime transportation plays a major role in the national and international trade and economic growth. The seaborne trade represents 90 per cent of the international trade in the world. A seaport is defined as a terminal and an area within which ships are loaded and/or unloaded with cargo and includes the usual places where ships wait for their turn or are ordered or obliged to wait for their turn no matter the distance from that area.

Seaports in relation to trade are major gateways to the economy of a country. They represent a complex structure in a country’s transportation system providing ship harbour interface services such as pilotage, dredging, provision of berths, maintenance of navigational channels, etc., ship-port interface in terms of loading and unloading cargoes and port-land interface in delivering cargo to and from the hinterland. In general seaports have five principal roles. They include: Cargoes and passengers handling, providing services for ships such as bunkering and repair, shelter for ships in case of heavy sea and storm conditions, bases for industrial development and terminals forming part of a transport chain. Seaports, expert believe, are complex dynamic systems consisting of numerous interacting elements, influenced by random factors.

Seaports in relation to trade are major gateways to the economy of Nigeria hence, play an important role in the development of the country.

In Nigeria, for instance, freight types are mainly containerised cargoes, general cargoes, roll-on-roll-off cargoes and petroleum products. General cargo was handled mostly by Tin Can island port, dry cargo by Apapa port and liquid cargo by Okrika port. Apapa port accounts for 30 per cent of cargo throughput in the Nigerian seaports. This form of port specialisation has implications for the provision of facilities at the ports.

Between 1990 and 2005, there was an increase in the cargo throughput, container traffic, net registered and gross registered tonnage of vessels at the ports and crude oil terminals. However, major problems affecting freight traffic include inadequate cargo handling plants and equipment, long turnaround time, cargo pilferage and excessive charges.

Exporters’ Dilemma

Export process from Nigerian ports is plagued with factors in cross border trade, which greatly affect Nigeria’s product competiveness that result in rejects in the international trading environment.

However, a worse situation now bedevils exporters. That monster is port access roads. The deplorable state of the roads has resulted in losses for exporters with thousands of jobs laid off. A visit to the ports revealed that goods worth billions of naira are rotting away in the port as export process becomes impossible. Non-oil exporters have lamented the negative impact of the Apapa gridlock and port congestion on their earnings.

In a chat with THISDAY, an exporter, Sotonye Anga said the situation was causing a delay in shipment, adding that shipment that should ordinarily take one day was beginning to take five days.

He said because of this, exporters were unable to meet up with their contractual obligations even as they had their capital tied up in banks.

“When we should have shipped more, we are shipping less. There are so many warehouses filled with goods that should have been exported. And when these goods stay too long in the warehouses, they lose their original value. This is impacting negatively on our earnings,” he said.

He suggested that alternative ports should be used for the exportation of goods instead of Apapa.

On his part, the National President, National Cashew Association of Nigeria, Mr. Tola Faseru suggested that the government should establish a base outside the port where goods coming in should be taken for the owners to pick them up and a place where empty containers should be deposited, so as to ease the traffic situation at the ports.

The Chairman, Seaport Terminal Operators of Nigeria (STOAN), Mrs. Ify Haastrup, had expressed fears that there might be congestion at the port due to the ongoing palliative work being done on the Apapa Ijora/Wharf road.

She explained that it was difficult for containers to enter the ports because empty containers that had been offloaded were unable to get out due to the traffic situation.

Obstacles to Export

In a letter to the Nigerian Export Promotion Council (NEPC), the National President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero name factors such as: lengthy and cumbersome documentation process on export, multiplicity of regulatory/security agencies, high and duplicated terminal/ shipping company charges and process and lack of export infrastructures as the bane of export.

The inspection of containers, he stated, is conducted by the following agencies on product quality: The appointed pre-shipment Inspection of export agents, the Federal Department of Forestry, the Federal Produces Inspection Service and the Plant Quarantine Service.

According to him, “The Pre-Shipment of Export Company who issues Clean Certificate of Inspection (CCI) is expected to carry out in pursuant to Pre-Shipment Inspection of Export Act of 1996 section 4-(c) clearly states, the inspection agents is provided with necessary facilities to enable the inspection agents to carry out quality and quantity inspections, price comparison and other process as may be required in the circumstance.

“The pre-shipment Inspection of export agents appointed by the federal government is responsible for three major functions: rice comparison (value), quantity and quality (product standard). The contract covers the international requirements with regards to the quality of the product, which is the standard of the product that should have eliminated other agency involved in terms of process and cost, so as to reduce the level of international product reject that is rampant, and in effect enhance our export capacity.”

He added: “The following federal government agencies duplicates the process of quality inspection with that of the appointed federal government Pre-shipment Inspection on Export: The Federal Department of Forestry under the Ministry of Environment is involved in Quality of Product, with documentation, operational process and Cost.

“The Federal Produce Inspection Service is involved in quality of product inspection, with documentation, operation and cost. Plant Quarantine Service is involved in quality product inspection, documentation, operation and cost.”

Duplication of Product Quality

Amiwero added that the duplication of product quality (standard) inspection by the four agencies constitute serious bottleneck due to lengthy and cumbersome process, procedure and cost.

This, he stated, resulted to associated delays and high cost that necessitated the movement of our product to our neighbouring West African ports.

He pointed out that another major factor affecting export is shipping companies’ duplicated charges and charges not tied to service on export.

He said: “The Nigerian shipping companies in line with the contract of carriage, handle import container that are loaded back to the country of origin as empty container without any charge due to the level of export activities that is still very low in the country. The shipping lines Terminal Delivery Charges (TDC) is a charge that is not tied to service, as such charge is duplicated in the charges of terminal operators.”

“The excessive terminal charge coupled with various other charges are not tied to services in line with WTO Articles VIII –(1)-(a), which stipulates that all fees and charges of whatever character imposed by contracting parties in connection with importation and exportation shall be limited in amount to the approximate cost of service renders.

“The terminal charges are charges component that are not tied to service and it’s duplicated by the shipping company who do not perform any service in the terminal. The operational procedure of terminal/shipping activities contributes to the associated delay due to short shipment of consignment that result to late Loading and reloading of exported containers.”

On the provision of weighing and application of Verified Gross Mass (VGM) by exporters, he said: “The verification of gross mass shall be verified by shipper either by weighing the packed container using calibrated and certified equipment as contained in the provision of Solas Chapter VI Part A Section 4 paragraph 1&2, which clearly states, the shipper of a container shall ensure the verified gross mass is stated in the shipping document and shall be signed by the shipper.

“The responsibility of verified gross mass is clearly the responsibility of the exporter and not that of the terminal operator, who exploit the system to Charge as much as N20, 000 per container even when the container has already been weighed by the exporter in compliance to the VGM convention. Terminal operators go ahead to enforce unconventional operational practice in contravention of the SOLAS Chapter VI convention by charging N20, 000 per container with other operational complexities.”

As a way out he said: “We as organisation that has served in close to 167 Federal Government Committee some attached, which include:, presidential committees on Destination Inspection, Port problem, 48 hour Clearance of cargo, Customs Reform etc,, request that trade procedure committee (TPC) be set up with expert, to address the obstacle and the shortfalls inherent in our system as it relate to Export and Import Trade. This would, in turn, properly position Nigeria for the desired change in other to focus on export drive that will rescue the country from the dependant oil.”