Continuous effort to ignite efficiency puts maritime sector on economic growth path

Nigeria’s maritime sector in the last 12 months witnessed some genuine efforts by service providers, port operators
and government agencies to scale-up the efficiency of services delivered to port users.

This was followed by fresh investments and innovations geared towards making Nigerian port industry more competitive in the international market.

These efforts also helped in positioning the sector in the path of economic growth, which if consolidated on in 2015, will help in creating wealth and employment for many.

Maritime sector in 2014 

The port industry witnessed some significant high and low points that helped in shaping business activities in the year under review. Firstly was the implementation of the new automotive policy on imported brand new vehicles, which increased the duty paid on vehicles to 70 percent, and resulted to slight drop in the volume of imported vehicles.

In terms of cargo clearance, generation of the Pre-Arrival Assessment Report (PAAR) by the Nigerian Customs Service (NCS), which started on a wrong footing early in the year, recorded great improvement later in the year, though it is yet to impact on cargo clearance.

The failure of PAAR to fast track cargo clearance has also resulted to increased cargo dwell-time at the port such that it took a minimum of 21 days to clear a container.

Currently, about 60 percent of imported cargoes are physically examined by Customs, despite the existence of scanners left behind by the defunct destination inspection service providers, and this also contributed to delay in cargo clearance as well as long cargo dwell time at the port.

‘’However, the appointment of the Nigerian Shippers’ Council (NSC) as the interim economic regulator for the port brought with it some measures of hope for a better port business in 2015, as there seems to be a step in the direction of bringing down shipping and terminal charges for the benefit of importers,” says Tony Anakebe, a renowned maritime analyst.

In her own view, Obiageli Duru, deputy commercial manager of APM Terminals, states that the volume of containerised cargo grew by at least 10 percent, resulting to increased cargo throughput.

According to her, ‘’cargo throughput is growing year by year such that an average of 700 Twenty Equivalent Units (TEUs) of imported containers are delivered to the importers warehouses on daily basis from Apapa port alone.

“This means that more cargoes are coming into the country in container boxes and that Nigeria’s economy is growing.”

In the area of shipping and maritime security, the year 2014 was undoubtedly quite eventful as the Nigerian Maritime Administration and Safety Agency (NIMASA) engaged in a wide range of ventures and strategic partnerships that saw to the actualisation of great developmental strides.

BusinessDay check reveals that NIMASA was able to achieve full domain awareness of the nation’s maritime environment. The agency also in June 2014, launched a Satellite Surveillance Centre, which has been very crucial to the successes achieved in terms of providing the needed intelligence in the fight against piracy and other illicit crimes on the waterways. This helped in reducing the rate of attacks recorded on Nigerian maritime domain in the year under review.

On the implementation of the International Ship and Port Facility Security (ISPS) Code, which posed huge threat to the nation’s shipping business earlier in the year, “over 38 percent of 129 port facilities in the country have fully complied with the provisions of the Code. This comprises of all the major ports in the country, and it is a great improvement from the less than 7 percent compliance level before the appointment of NIMASA as the Designated Authority (DA) in 2013,” Patrick Ziakede Akpobolokemi, director-general of NIMASA, said at the end of the year press briefing, held recently in Lagos, to reveal the agency’s performance in 2014.

Apart from this, the agency also recorded huge success in the area of manpower development in 2014, as it further pursued the vision of establishing six institutes of maritime studies in six different universities in Nigeria, and they include University of Lagos; University of Nigeria Nsukka; Ibrahim Badamasi Babangida University Lapai, Niger State; Niger Delta University, Amasoma, Bayelsa State; Federal University, Kashere, Gombe State, and the Anambra State University, Uli.

“About 2500 seafarers are currently being trained under the Nigerian Seafarers Development Programme (NSDP), even as a long-term solution to the dearth of qualified professionals in the Nigerian Maritime sector has been conceived and implemented with the establishment of the Nigerian Maritime University (NMU). The university will produce high level manpower for Nigeria’s shipping sector on sustainable basis,” the NIMASA boss said.

According to him, part of the success story recorded in 2014 is the development of structures for the implementation and enforcement of the Cabotage regime by creating special register for Cabotage vessels, which has registered over 100 vessels. This is in addition to the numerous jobs created for Nigerian ship owners under Cabotage. The agency also developed modalities for the collection of the Cabotage Vessel Finance Fund (CVFF) and selected disbursement banks.

The Nigerian Ports Authority (NPA) consolidated on its marine operational services, such as capital and maintenance dredging of the water channels, which made way for continuous calling of larger vessels into Nigerian ports. The flagged-off of the Calabar Channel Management company, which close industry watchers believe will impact largely on the volume of businesses in the port in 2015, also reinstated hope for the revival of businesses in the Eastern part of the country.

In furtherance to the Federal Government automation directive, NPA introduced an e-payment solution for its customer, and this has helped in eliminating the difficulties in clearing vessels in the ports.

Issues that posed huge challenge to businesses 

The major challenge that port operators and users faced in the Nigerian port in 2014, was the bad state of the access roads, which created difficulties in the movement of cargoes
in and out of the port. The current state of the roads is costing Nigerian port users, including operators, huge sums as many spend greater part of the work hours on gridlocks.

“If properly harnessed, the Nigerian port has the potentials of generating huge revenue for the economy, owing to the fact that the country is an import dependant country.

‘’For NIMASA, 2014 has been quiet challenging as the agency was confronted with bureaucratic bottleneck of civil service, which slowed down its pace in the fight the year against piracy, oil theft and sea robbery,’’ Akpobolokemi noted.

Outlook for 2015

Industry close watchers believe that the year 2015 will see continuous drop in the volume of imported cars as the nation commences the full implementation of auto policy of 70 percent on imported new and used vehicles.

‘’This will not only increase the price of imported used vehicles but will also encourage smuggling in of these vehicles through the land borders,’’ according to them.

To them, the fall in oil price, which resulted to the devaluation of the naira will likely affect the volume of imported commodities in the early part of coming year.

This would be due to difficulty in accessing foreign exchange as well as the high rate of foreign currency. By so doing, the purchasing power of importers will be devalued, resulting to drop in the volume of imported goods.

“We see a lot of activities that will bring positive growth in Nigerian port industry, but for us to get there, government needs to make the two roads leading to the two major seaports in Lagos (Apapa and Tin-Can Island Ports), which include Apapa-Oshodi Expressway and Ijora-Apapa Road, to be motorable.

This will remove the traffic congestion, which the port users used to experience on the roads to ensure free flow of traffic,” Anakebe suggested.

There is need, he further noted, for the Federal Government to give legal backing to Shippers’ Council as the economic regulator to enable them regulate the activities of service providers and other operators in the port. This will fully empowered the Council to curb the excesses of the port operators in term of the controversial arbitrary charges at the port.

Emma Nwabunwanne, a Lagos-based importer, believes that the Federal Government needs to consolidate on the proposed automation of port operations to enable them deliver on the implementation of eclearing and single window clearing system at the port.

By so doing, cargo clearance will be fast tracked, and this will translate into tremendous increase in cargo throughput at the port. “This is because more importers, who used to take delivery of their cargoes from ports in the neighbouring countries will be bringing their goods direct into Nigerian ports,” according to him.

NIMASA boss assured that in continuous Verification Inspection Exercise (VIE) of Port facilities, the agency will attain over 90 percent compliance level before the end of 2015 and maintain the pace with which it implements ISPS

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