By Steve Agbota [email protected]
Policy inconsistency, shoddy implementation, and instability had among other factors combined to impede the actualisation of the huge potential of Nigeria’s maritime sector in 2022.
The high points of these trends include the rising exchange rate, dollar scarcity, incessant increase in Customs duty, decline in importation, which combined with other exogenous factors to hinder the growth of the maritime industry in 2022.
This has made stakeholders describe the sector as the worst in 2022 even in the last seven years of the present administration.
Like every other year, lack of enforcement of maritime related policies posed a huge setback for the nation’s maritime sector, in addition to myriads of other factors ranging from poor seaport access roads, lack of holding bays and quay, inadequate truck parks, and ineffective traffic management around the ports, especially within the country’s two busiest ports in Lagos.
Likewise, the multiplicity of Customs units and extortion of importers by security agents also contributed to the downside of narratives that constrained trade facilitation around the nation’s ports.
Aside the above listed, one other thing that paralysed the economy activities at the port was the VIN valuation policy, which was first introduced in January 2022 by Nigeria Customs Servhce (NCS), hiked the duties payable on fairly-used vehicles by more than 200 per cent and was resisted by clearing agents.
This led to protests that had the ports and activities around it shut down for about two weeks, and created a backlog of uncleared vehicles at the PTML and Tin-Can Island ports, thereby forcing the NCS to suspend the policy for 30 days.
During this period importers lost over N300 billion in demurrage due to the Vehicle Identification Number (VIN) valuation protests by the clearing agents at the port, according to the African Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON).
Again, incessant collapse of Customs’ server hampered trade facilitation across the nation’s port and borders. Clearing agents had on several occasions raised the alarm over the total shut down of the server and called for the sack of the Customs internet service provider known as Webb Fountaine as they were unable to clear their consignments while importers incurred demurrage.
Government’s inability to fix the collapse of quay and other obsolete infrastructure around the port also stunted the growth of the industry.
The nation’s port is still synonymous with high level of corruption. A recent report by the Nigeria project of the Maritime Anti-Corruption Network (MACN) in collaboration with the Lagos Chamber of Commerce and Industry (LCCI) revealed that Nigeria losses over $7 billion annually to inefficiency and corruption at the port.
The report said that illegal charges, rent-seeking, corrupt port officials and circumstances of excessive delay to import and export processes were some of the administrative bottlenecks responsible for such huge losses. “In economic terms, the private sector and the Nigerian government lose as high as N600 billion annually as a result of administrative bottlenecks and delays at the port and terminals in Nigeria,” it stated.
In the report, challenges of port administration were said to remain a major issue as operators continue to face lingering challenges that include infrastructure gaps, regulatory inconsistencies, duplication of roles by Ministries, Departments and Agencies, MDAs, high rate of infractions by MDAs, cumbersome cargo clearing processes, multiple taxations and poor state of the roads.
“These challenges, particularly cargo clearance processes and modal transportation have created circumstances of excessive delays to import/export processes, red tape, rent-seeking and corrupt demands, human and vehicular congestion in and around the ports and illegal charges leading to high of business operations.
“Estimates indicate that the economic cost of these inefficiencies to the Nigerian government and private sector is as high as $7 billion annually.
“The Lagos Chamber of Commerce Industry, LCCI, further calculates these annual losses to amount to N600 billion in Customs revenues, $10 billion in non-oil export and some N2.5 trillion in corporate revenues, including a drop of 38-40 per cent in industrial capacity,” a part of the report disclosed.
All these contributed to the sector’s poor performance in 2022 with indications evidently pointing to the negative zone. These challenges had stunted the growth of the sector and impacted the industry adversely in 2022.
In spite of these unpalatable events, the maritime sector recorded some achievements in the years under review. For instance, Customs deployed three mobile scanners across three ports in the country and the Service also launched its cargo tracking system recently.
Also, the Integrated National Security and Waterways Protection Infrastructure, also known as the Deep Blue Project of the Nigerian Maritime Administration and Safety Agency (NIMASA), which was launched by President Muhammadu Buhari, reduced piracy on the nation’s waters. For more than eight months, Nigeria has not recorded any piracy attack in its waters. This earned Nigeria international commendations from International Maritime Bureau (IMB) among other agencies.
In spite of all these, stakeholders in the course of the year accused the Federal Government of not paying enough attention to the sector despite its huge potential. They argued that the government was only interested in the revenue coming from the industry but had consistently failed to fix the obsolete infrastructure and tackle other challenges facing the sector.
Speaking with Daily Sun, the Acting President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr. Kayode Farinto, said year 2022 in the maritime industry is even worst than year 2021.
“Ordinarily, we thought our level of growth and development would have been more than this in the industry. I keep on telling everybody that we are crawling in the maritime industry, it is quite unfortunate. Until government realises this and does the needful.
“Year 2022 is not a good one because on a monthly basis, from February our volume of import continued to drop and don’t forget we have challenges with naira and the role of Central Bank of Nigeria (CBN) not being consistent. We have a CBN that is always an interloper and involving itself in something that is not even its responsibility.
“We have a Ministry of Finance that is very docile, not really doing anything and above all, we have a too powerful Customs administration that nobody can control. So it not too interesting. Importers are not happy. That is why 40 per cent of them are dropping in the area of importation. And our importation continued to decline,” he added.
Meanwhile, he noted that the nation’s exportation is increasing that is the only thing is working for Nigeria.
“ That is what I give to this administration. If you ask me what this administration has achieved in the last eight years, I will tell you is only our exportation. Any other thing, they have not done well. So in the maritime industry, we have not fared well in 2022.
“We are supposed to have increased in geometric but we are still crawling. Above all, there is no employment created for timing youth, the youth is still apprehensive.
“I want to believe that government needs to look back and see what can be done to turn around the maritime industry in 2023. If I have my way with the President, I will just give him one or two advise, you will see that we will have a better maritime industry. Drop in importation. Presently, importation has dropped by almost 40 per cent,” he stated.
Meanwhile, a former member of Presidential Taskforce on the Reform of Nigeria Customs Service; Presidential Committee on Destination Inspection, and Ministerial Committee on Fiscal Policy and Import Clearance Procedure, Lucky Amiwero, said maritime sector is the worst sector so far.
According to to him, in the past seven years, the maritime sector has been bedeviled with a terrible setback, saying the sector is unorganised, uncoordinated and everybody just doing what they like.
“The setback is the sector has pushed a lot of people out business. If you go to the Port now, the whole place is empty. Customs does what they like. Nigerian Ports Authority (NPA) and Nigerian Shippers’ Council are not left out. Everybody just doing what they like. Nothing has been achieved from the maritime sector. It is a very serious issue,” he said. He lamented that procedures are not in place, laws are not followed, saying nobody coordinate the sector as it being run without direction.