Posted on October 24, 2022
The recent report that goods worth about N400billion are held up at the nation’s major sea ports over demurrage and shipping costs shows that all is not well with the management of Nigerian ports. The report says that there are over 7,000 abandoned containers at the ports. The clearing of goods has been at a slow pace due to manual inspection of containers instead of the deployment of digital scanners to fasten the process.
This, according to the President of the National Council of Managing Directors of Licensed Customs Agents NCMDLA), Lucky Amiwero, has caused delay in the clearing of goods at the Lagos ports. It has been estimated that cargoes waiting for clearing have accumulated demurrage of over N60billion. Terminal operators charged cargoes under their custody about N22.5 billion for rentals from January to September this year. The shipping companies demurrage for the same period under review came to N37 billion.
Despite the poor service delivery in ports’ operations, the report that the reconstruction projects at the Apapa and Tin can Island ports were not captured in the 2023 budget is disconcerting. We call on those concerned to address the omission. Earlier the Managing Director of Nigerian Ports Authority (NPA), Mohammed Bello-Kolo, had said that about $600million or about N258 billion would be needed to rehabilitate Nigerian ports. The affected seaports included the Apapa and Tin Can Island ports in Lagos, Calabar port in Cross River State and the Warri, Koko and Burutu ports in Delta State.
According to stakeholders in the maritime sector, there are many factors responsible for cargoes attracting demurrage at the ports. The inability of some importers to clear their goods due to finance and other problems can account for the delay. The fact that shipping companies do not open for operation during weekends and public holidays and charge demurrage can compound the situation as well.
The counting of demurrage five days from the day the vessel berths irrespective of when the container arrived at the terminal does not really help matters. Besides, most of the containers are owned by foreign shipping Lines and any demurrage paid does not benefit Nigerians, as such money is repatriated. Men of the Nigerian Customs also contribute to the rising demurrage at the ports due to their poor attitude to work. Most of the officers resume work so late and they don’t seem to be committed to the work and that slows down operations. The manual inspection of cargoes by officials of Nigerian Customs is inefficient and can lead to corruption said to be rife in inspection and clearing of goods at the ports. In addition to multiplicity of functions at the ports, the scanning machines reportedly do no work at times on account of fluctuating network.
In ports in other countries, these services are offered at one spot, thereby enhancing their ease of doing business. All these call for urgent reforms at the ports. The inclement exchange rate of the naira to the dollar is inimical to businesses, including ports operations. The delay in the clearing of goods has added to our poor rating in the global index of ease of doing business. In 2017, the World Bank ranked Nigerian ports 183 out of 185 countries in trades across borders index.
The nation’s ports were rated among the worst in the world on account of non-digitalisation of their processes, corruption and other challenges. Not long ago, the House of Representatives revealed that lack of scanners and other devices has been responsible for congestion at the nation’s ports, particularly the Apapa and Tin Can Island ports in Lagos. It is likely that this may also have extended to other ports in the country. That is why we call on the new management of the NPA to holistically address the challenges through the digitalisation of ports operations.
Our ports should be made to operate 24 hours, including weekends and even some public holidays. Those who work at the ports should be part of essential service providers. Last year, the absence of scanners and 24-hour port operations cost the government about N800 billion monthly and N9.6 trillion annually. There is need to change the situation and stop the annual loss of huge revenue. While operations at the nation’s six ports should be digitalised, attempts must be made to develop the river ports at Onitsha and other locations.