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Nigerian Ports: A Sinking Ship?
Maritime experts claim that the country may have lost over one billion dollars in four months, due to inefficient port reforms
Abiye Sekibo
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By Innocent Chukwu
Last year, one of Nigeria’s most
revered finance pundits and a
former Minister of Finance, Dr. Ngozi Okonjo-Iweala, was forced to make a shocking revelation which stunned the nation’s maritime industry and investors, to wit: that the Nigerian Ports Authority (NPA), was enmeshed in logistics scandal.
Okonjo-Iweala had alleged that all the Finance Ministry’s approved funds for the NPA to acquire needed equipment to facilitate speedy clearance of cargoes at the ports vanished through unidentifiable drain-pipes. According to her, there were very few of such important equipment and where they were, the few available ones were obsolete.
Okonjo-Iweala further lamented that in a bid to justify the stealing culture at the NPA, the Authority’s management was always crying wolf, claiming that it lacked funds to acquire necessary logistics needed to enhance effective service delivery at the ports.
Okonjo-Iweala: “There has been a lot of corruption in NPA, but what you hear people say is that no funding, no funding. Once they say the Finance Ministry has not made funds available, everyone keeps quite.
“There was a time that only one crane was servicing the entire ports. One crane! Why one crane? Even if it was N20 that they got as funding for that period, what did they do with it? Why just one crane? All you hear people saying is bring money, bring money, but nobody is asking what they are doing with the money?”
At the time, Okonjo-Iweala was trying to justify before the National Assembly her quick response decision to engage a United Kingdom (UK) firm to work in the nation’s ports, following numerous petitions to the ministry from importers, freight forwarders and the Manufacturers Association of Nigeria (MAN) over the dearth of logistics and equipment at the ports.
But in an equally measured response to the submissions of the then Finance Minister, the management of the NPA quickly assailed the media with advertorials wherein they sought to refute Okonjo-Iweala’s claims, arguing that while she might have been right on other issues, for the NPA matter, she was a “blatant liar.”
But barely a year after the equipment controversy, accolades have begun to go the way of the former Finance Minister from maritime stakeholders and the organised private sector, for her foresight into the drain-hole called the NPA.
Unfortunately, however, they regret that the NPA is no longer in position to explain what happened to over 70 cranes and forklifts it claimed it had. Experts admit that it was based on NPA’s bogus claims that the new private Terminal Operators did not bother about the issue of logistics to work with at the ports.
Consequently, maritime analysts argue, since April 2006 when the ports were ceded to the private sector till date, more than 100 vessels billed to discharge their consignment at the nation’s ports, particularly the Apapa Premier Port, have sailed to other neighbouring African countries including Benin Republic, Togo, Ghana and South Africa.
They further indicate that losses in revenue due to this development and congestion at the premier port due to lack of equipment to work, have cost the country over one billion dollars since the ports were concessioned to the private sector in April.
Indeed, these analysts, just like Okonjo-Iweala in the case of NPA, were almost on the verge of being regarded as alarmists by many Nigerians especially when A.P. Moller, terminal overseers of the lucrative Apapa Port container terminal, claimed that it had acquired additional six cranes to support the alleged obsolete equipment they inherited from the NPA.
Infact, the maritime pundits were only saved a humiliation, courtesy of a recent maritime stakeholders forum organised by the Customs Service, Apapa Port command on Thursday, July 20, 2006. The meeting was intended to get port operators to brainstorm on the challenges facing the industry a few months after the terminals were leased to the private sector.
Surprisingly, almost all the stakeholders, with the exception of the concessionaires, spoke against the same set of problems: containers blockstacking, high port charges, dearth of equipment, and delay in clearance processes. As the participants bared their minds, anger, frustration and bitterness in varying degrees, were easily discernable in their countenance.
They called on the Federal Government to take a second look at the operations of the Private Terminal Operators (PTOs) as well as implored the National Assembly to throw out the Ports Reform Bill which the president, Chief Olusegun Obasanjo recently presented to it for consideration.
The operators accused the present administration of being “short-sighted, obstinate and irresponsive to the plight of the masses in its reform agenda” but however consoled themselves in the belief that if the National Assembly does not pass the Port Reform Bill into law, the next elected president may be favourably disposed to reverting to the status quo ante.
But why would the stakeholders condemn the current terminal operations scheme in unison, but instead canvassing that the NPA be brought back, inspite of its failings to run the ports? Many alleged that since April till date, there has been no additional equipment to the ones the PTOs inherited from the NPA. They argued that while some of the cranes had packed up, others are not strong enough to meet with the increasing cargo traffic, especially at Apapa container terminal.
Other stakeholders picked holes in the way the service providers process RAR (Risk Assessment Report), an automated device to determine the nature of an import – whether it should be released without examination or go through the scanning machines or 100 per cent physical examination.
The group which complained against delay in RAR processing, also alleged that they pay through their noses before getting the officials to effect physical examination of their containers. This development, according to them, is because in one day more than 50 freight forwarders would be waiting for one crane to step down their containers for examination.
They further alleged also that the drivers of these cranes charge exhorbitant amounts of money before they are influenced to mount the equipment for containers’ examination. Besides, the importers lament that because of block- stacking and congestion at Apapa container terminal, it takes a clearing agent more than four weeks to locate a container before processing its clearance and release.
Notedly, importers at the talkshop decried the rate at which the new terminal owners increase port charges and demurrages, even when it is obvious that things are not normal at the ports. They lamented that port charges since the NPA conceded terminal operations to the private sector, have hit an incredible 100 percent rise, a situation which they attributed to unfair treatment of the masses by the ruling class.
According to the importers, “inhuman port charges and undue demurrage often bring about increase in inflationary rates.” They contended that in the short run, it may seem as if the concessionaires are ripping off the importers, but that in the long run, these abnormal charges on imported items would be added to the unit price of goods which would then be passed on to the Nigerian masses who are the end users of such goods.
In their assessment, not a few importers predicted that as the price of goods increase in the local markets, so also would inflationary rates rise. This, they said, is not in the interest of the nation’s economy which is struggling to recover from the battery which it suffered in the hands of the military.
Another contentious issue that was brought to the fore at the event was the issue of overtime cargoes. Importers and clearing agents protested at the forum that their goods were deliberately being allowed to enter the overtime stage due to non-availability of equipment to clear them.
When imports stay in the port beyond the statutory 90 days clearing period, operators explained, such items are regarded as overtime cargoes and they will require special processes and additional expenditure to get them released.
A visibly angry importer who failed to disclose his identity told The Source at the meeting, said that some of his containers were already in the overtime list. According to him, all efforts to get them released within 90 days of their arrival in the country failed because he could not locate the containers on time – and when he sighted them at last, the demurrage they attracted was so much that he needed to take a loan to start processing their release.
But unlike the above claimant who craved anonymity, an importer and a shipping agent who felt that time was not on his side to drop certain hints about the ports at the occasion, volunteered to talk to
The Source shortly after the forum on his personal experiences since the private terminal operation started in April.
An industrialist and the chairman of a shipping conglomerate, Sea Map Group of Companies, Dim Ogbuagu Peter Obih stated that “the people that advised the (Federal) Government on port concession made a big blunder,” alleging that “the foreigners (concessionaires) have come to kill us.”
Asked to clarify this Obih said, “my impression is that importers and agents are suffering untold hardship in the hands of the concessionaires. The charges we are paying in the ports are too much. For instance, I went to ENL consortium (a PTO) to examine two containers, I was given N66,000 charges for examination only. You pay for plant, you pay for people that will handle the examination, you pay so many other unimaginable charges!”
Obih claimed that even the NPA which was accused of inefficiency and corruption is now considered better than the PTOs and thus warned that except something was done urgently to arrest the current situation in the ports and stop the concessionaires from making goods costly in the markets via “increased port charges, overtime charges and undue demurrage,” over the next five years, inflation would rise to an unprecedented level.
According to Obih, this will as well affect the Nigerian masses negatively, because “the importers are not Father Christmas. They will compute other unexpected charges in the process of clearing their goods and add them to the prices of the goods and it is the end users that will bear the pain.”
Reminded that concessioning was only just being implemented and so teething problems are bound to emanate here and there at the outset, the shipping expert admitted the teething problems, but condemned the inability of the concessionaires to acquire the basic equipment needed to work in the ports.
Obih argued that if the concessionaires had human feeling, they would not embark upon arbitrary increases in port charges and demurrage, without any move to acquire needed equipment. He faulted A.P. Moller's claims that it recently procured six new cranes at the container terminal, Apapa.
Noting that the Federal Government has since then lost huge sums of money to “the chaotic and sympathetic crisis in the ports,” Obih challenged A.P. Moller to display the acclaimed newly acquired cranes for Nigerians to see.
Indeed, The Source's investigations reveal that many importers are not prepared to embark upon a legal feud with the Federal Government and the concessionaires, “because importers have no common forum where they discuss their plight.” It was gathered, for instance, that as a direct consequence of the untidy operations at the nation’s seaports, most of Nigerian-bound vessels are now been diverted to other countries to berth and discharge their contents pending when the mess in the nation’s ports is cleared.
Sources in the Nigeria Customs Service (NCS) told The Source that the year is expected to be the worst in duties collection because of the attendant lull in business activities. They fear that some commands may not even meet up their annual targets this year because of the reforms. |
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