What Nigerian shippers, port users expect from Buhari’s second term

In recent times, shippers including importers and exporters, service providers and users of port services have been grappling with difficulties in trying to do business at the nation’s seaports.

The difficulties experienced by shippers in the last four years, have been largely due to lack of infrastructural development within Apapa port city, which houses the nation’s major economic gateways, Apapa and Tin-can Island Ports.

As a result, virtually all roads, streets, bridges and under bridges that have connection with Apapa metropolis, have been turned into parks for heavy-duty vehicles. This created more problems for port users, as vehicular movement in and out of Apapa metropolis, became a hard nut to crack due to traffic congestion.

With the congestion, entrance into the port became very challenging to not only importers but also to service providers. This has posed serious threats to smooth movement of goods, and also increased the cost of doing business as importers experience substantial man-hour loss, blamed by Customs and other service providers on having to report late to discharge their duties, such as shipment examinations due to the traffic situation.

Apart from the infrastructural gap within the port environs, port users have also been challenged by the cumbersome cargo clearing procedure at the ports, multiple taxation as well as levies imposed on them by government agencies involved in cargo clearance. This has been attributed to the presence of multiple government agencies at ports as well as failure of officers of the Nigeria Customs Service (NCS) to fully deploy electronic equipment such as scanners and a Single Window for cargo inspection.

Even though, the Office of the Vice President in partnership with the Nigerian Ports Authority (NPA) has shown commitment towards solving the ‘ Apapa debacle’, port users who spoke with Businessday made some suggestions towards a lasting solution to the situation.

“Government needs to either revive the refineries or make use of pipeline for the evacuation of petroleum products to stop tankers from coming to Apapa, in order to reduce the number of articulated vehicles coming there,” said Tony Anakebe, managing director of Gold-link Investment Ltd.

Anakebe further said: “Government needs to ensure that the contractor in charge of the reconstruction works on the failed portions

of the Apapa-oshodi Expressway is mobilised to site, and fast track the work.”

On his part, Kunle Folarin, chairman, Port Consultative Council (PCC), said the Apapa problem will only go away if government provides inter-modal (rail and water) transportation for cargo evacuation and rebuild critical transport/road infrastructure.

“Until we develop a multi-modal system of transport and build other transport infrastructure at the ports, we would continue to have a recurring decimal of congestion at the ports. For instance, within the port environment, 4km from the port, should be reserved only for warehouses for cargoes, roads for movement of port cargoes by trucks or railway. There should also be a ring road exclusively reserved for the port,” Folarin said.

Statistics have shown that over 70 percent of the cargo brought in and exported out of the country, passed through the ports in Lagos while Onne, Port Harcourt, Warri/ Delta and Calabar Ports struggle with the remaining cargoes.

Pundits believe that congestion in Apapa was partly due to over reliance on Lagos ports, and for this reason, shippers want government to open up other ports to help redistribute the weight ports in Lagos, presently shoulder.

“Government agencies must review tariff and charges on ships calling ports in the Eastern part of the country with imported cargo by at least 30 percent, to encourage effective utilisation,” said Iheanacho Ebubeogu, general manager in charge of Security at the NPA.

According to him, if the cost differentials between Lagos and Eastern port is down by 30 percent, importers will be attracted to use those ports.

“When I mean review of tariff across board, NPA tariff has to come down, NIMASA should review their Cabotage tariff, Customs tariff should also come down so that, people can be motivated. I do not want us to think that addressing security alone will achieve this,” he said.

Eastern ports have also been faced with security challenges due to the reoccurring pirate attacks and sea robberies that discouraged oceangoing vessels from accessing those ports.

To address this, Ebubeogu said there is need for synergy between NPA and other security agencies to ensure comfort to shipping and prevent host communities from interfering in shipping through piracy and other related crimes.

On his part, Jonathan Nicol, president, Shippers Association, Lagos State, said, “Shippers need complete restructuring of maritime sector. We need professionals to take over agencies in the sector. We do not want Federal Government to put tags on the neck of agencies to generate whopping sums as revenue; rather they should be allowed to do their jobs. It is when Nigeria has enough cargo that governments can make more money. We do not want these agencies to enslave people to pay monies they ought not to.

He pointed to the need for Customs to be manned by professionals, who will not be killing people on the high way. “We need a ministry of maritime to enable us pay serious attention to trade facilitation and service delivery in the sector. The National Transport Commission (NTC) is coming to checkmate cost of doing business, and Ministry of transportation is over-loaded.

“We also need to bring back our importers, who have taken their businesses to other countries by making our trade platforms simple. Beyond the Presidential Enabling Business Environment Council (PEBEC), government needs to look at Ease of Doing Business. Shippers need a platform to discuss their challenges because government is for the people and by the people.

Businessday findings show that six years after the expiration of the Destination Inspection (DI) contract formerly handled by private companies, the Federal Government through Customs, has failed to put an end to the collection of 1 percent Comprehensive Inspection Scheme (CIS), introduced at the beginning of the contract, to pay for the scanning services rendered by the DI service providers.

By implication, the collection of one percent CIS charge together with the import duty on same cargo, means manufacturers bringing critical production inputs ( raw materials) and other importers bringing finished products through the nation’s seaports, presently pay double taxes to Customs.

At termination of the contract, the scanning machines were handed over to Customs, which till date have not been functional. This because the Customs Service prefers manual and 100 percent physical inspection of cargoes, instead of putting scanning facilities into use to fast track cargo examination at ports as done in other countries.

“Today, importers are still paying the one percent CIS charge when the scanning machines that are supposed to go with it, are no longer functional in the ports and border stations,” said Anakebe.

While questioning the continuous collection of the charge, he called on the management of Customs to define the purpose and to whom the money is remitted, adding that importers need to know if the monies are paid to government, retained by Customs or given to an unknown DI agent.

“They need to scrap the one percent CIS charge because shippers cannot consign a contract with Customs for the job they are trained (and paid) to do. They went through the training school for Hs-code, risk assessment and duty preparation. Customs must as matter of urgency, resuscitate the scanners and put them back into use to fast track cargo clearance at ports,” Nicol said.

Meanwhile, the NPA, Lagos State Government and Tolaram Group have been building a $1.5 billion Lekki Deep Seaport at the Epe area of Lagos State.

As Nigerians anticipate the completion and take-off of the port, the promoters of the port project must push for the expansion of Lekki-epe Expressway, Epe-shagamu Road as well as the development of a functional rail line to ensure smooth movement of cargoes in and out of the port.

The promoters also need to push for the establishment of truck and trailer transit parks within the Epe axis to serve as truck holding-bays where electronic call-up system will be used to streamline the number of trucks coming to the port to pick laden containers or drop empties.

In addition, Federal Government needs to limit the number of oil tank farms licensed to be situated within the Epe axis while the existing tank farms as well as refineries should use railway or pipeline as alternative means of evacuating products.

With the development of this critical infrastructure within the Lekki-epe axis, Nigeria’s first deep seaport will become a destination hub for transhipment and local cargoes. More so, without recording incidents of traffic congestion that presently obstruct free movement of cargo in and out of Apapa and Tin-can Island Ports, analysts say.