Businesses, lives suffocate as corruption perpetuates Apapa gridlock
Billions lost in revenue, corporate earnings
There is a well-organised racket going on in Apapa and Tin Can ports, Lagos, which has perpetuated the gridlock going on in the premier port city. The malfeasance involves trucks drivers, security agencies and government officials operating in the port city.
Known as ‘Fastrack,’ this racket ensures that truck drivers who part with between N250,000 and N350,000 get speedy call-up,
entering the ports before others on queue. Because money is involved, the trucks of drivers who are able to pay come into the ports at the same time, resulting in total lockdown of the premier port city, Businessday has found. But this is just one out of many reasons why the gridlock has defied solutions from Lagos State and Federal Government.
“If you want the Fasttrack system, you will spend between N250,000 and N350,000 to get your way through for 20-foot and 40foot containers, respectively,” a clearing and forwarding agent, who spoke in an interview with Businessday, said.
“If you pay that money by 2pm, your container will be at the ports by 8pm and by 9pm10pm, you shall have loaded your container. That is the fast-track. But if you choose to queue, it takes a minimum of four to six weeks to enter the ports,” according to the agent.
This comes with cost on the economy. A report by the Lagos Chamber of Commerce and Industry (LCCI) says Nigeria loses N600 billion in Customs revenue annually, including $10 billion in non-oil export sector and N2.5 trillion in corporate earnings across various sectors due to the poor state of Nigerian ports.
Currently, 5,000 trucks seek access to Apapa and Tin Can ports in Lagos every day, despite that the two ports could only accommodate 1,500 trucks, the LCCI states.
In an interview conducted by the Manufacturers Association of Nigeria (MAN) on critical challenges facing the sector in Q1 2020, 94 percent of the CEOS say congestion at the ports had a significantly negative effect on their productivity and cost of production.
“Most worrisome are the issues of deliberate delay in cargo clearing time, raising of technical barriers, rejection of relevant documents by officers of the agency that approved import documents, multiple agencies with duplicated functions and other rent-seeking activities of vested interests at the port that excessively fleece operators,” they say.
Jon Tudy Kachikwu, CEO of Jon Tudy Interbix, exporter of packaged foods to the United States via Apapa, loses most of his products on Apapa Bridge. He spends N650,000 to move his foods from Iddo in Lagos to the port city as against N350,000 in November 2019. This represents 86 percent increase in the cost of moving from Iddo to Apapa, both in Lagos.
His products spend three weeks on Apapa Bridge before getting to the ports, but they often get bad before reaching the destination country.
Now, he goes through Tin Can Port via Mile 2, using barges to convey his products to the port.
“Security agencies are the biggest problems we have in Nigeria. Our logistics costs have doubled in the last one year because security agencies are asking for money at each junction. We cannot talk about development and food security, but continue to pay lip service to corruption by security agents, which is killing businesses. How will Nigeria have the scarce foreign exchange when Apapa and Tin Can are frustrating exporters?” he asked.
The Federal Government few years ago set up the Presidential Task Team (PTT) led by Kayode Opeifa. Many players at the port city say the task force has not been as effective as they ought to.
One major player at the ports told Businessday that the Apapa problem could be solved if vested interests including government agencies want to get it solved, dismissing the taskforce by whatever name called.
According to him, any new taskforce for traffic control means increase in the cost and level of bribery on the road.
“If police, FRSC and LASTMA are now collecting N200,000 from you for 20-foot container, they will now tell you to make it N300,000 and if it is 40-foot, they will ask you to make it N400,000 because of the new taskforce team,” he said, stressing, “As long as these corrupt security agencies and others profit from this system, there is no incentive to fix the mess in Apapa.”
Another operator said while he spent about N500,000 to bring a container from China to the Apapa Port, he spent over N1.2 million to take the same container out of Apapa to Sagamu.
Four modular refineries set to come on stream before the end of this year with over 25,000 barrels per day (bpd) refining capacity spurred by Federal Government’s duty waivers, but the troubled Apapa ports threaten these plans.
Investigation shows that the benefits of a duty waiver are entirely wiped out by exploitative charges required to pay various port officials and security personnel to get into the port and take out containers.
Inside the ports, there are thousands of containers which delivered goods into Nigeria but without corresponding products to export. As a result, they are left at the ports. In the second quarter of 2020, exports (including crude oil and minerals) amounted to 36 percent of total trade estimated at N6.242 trillion. Finished and agricultural products comprised merely N347 billion, representing just 5.6 percent of the total trade, according to National Bureau of Statistics’ (NBS) Foreign Trade Statistics. This explains why empty containers stay on Apapa bridges for months.
In terms of solutions, the LCCI said, “Our desire is for Nigeria to get to the point where it can move containers and other items to and from ports by rail across the country,” in a recent statement.
According to CEOS of manufacturing firms earlier quoted, government must deliberately conduct a comprehensive review of all the contributory factors and consciously implement ongoing reforms in a manner that all port-related challenges that seemingly appear to have defied all solutions are permanently resolved.
Ambrose Oruche, acting director-general of MAN, called for a rail line that leads into the ports, saying, “Manufacturers are suggesting that a rail line be constructed in a way that it conveys containers out of the ports to the terminal.
“They also want to be allowed to use barges through Ikorodu,” he further said.