‘No sign of Christmas as business activities at the ports dwindle’
Tony Anakebe is the managing director of Gold-Link Investment Ltd. In this interview with AMAKA ANAGOR-EWUZIE, he tells the story of issues limiting port operations, cargo evacuation and growing the non-oil export trade. Excerpts:
May we know your assessment of port operations in the country at the moment?
Business activities in the port have reduced drastically in past 12 months and we are yet to see the Federal Government’s blueprint on port development. Issues around shortfall in accessing foreign exchange for importation and the restriction placed on 41 selected items have affected the volume of goods that comes into the country. The port is at its lowest ebb but few importers are taking the risk despite the odds because they believe that they can still sell their goods based on the rate at which the foreign exchange was obtained. Investors that used to bring in imports are no longer doing that due to the current economic situation and people are not sure of how to invest and make profit.
As a result, most manufacturing companies are no longer importing their critical input as it used to while some have shutdown operation and this has impacted on Customs revenue generation drive. Airlines that used to bring in spare parts are no longer doing so because of the economic situation. These are why the port is at its lowest ebb.
We are in the last quarter of the year and there is no sign of Christmas approaching as it used to be in the past. Currently, very few ships are coming into the country unlike two years back, the port is now empty.
How would you describe the state of infrastructure at the port?
Currently, Nigerian ports are one of the most difficult ports to do business because people go through hell to get their goods cleared and evacuated from the port. This can be blamed on the location of tank farms close to the seaport has reduced Nigerian major ports to nightmares and without the relocation of these tank farms away from port business, importers and businesses around Lagos port will continue to struggle to gain access to the port with army of tankers that lift imported petroleum products from these farms.
This questions Nigerian ports’ compliance to maritime security as stipulated by the International Maritime Organisation (IMO), and one cannot help but wonder if the government ever has plans to ensure that our port is highly secured. Port security is not only by driving agents away from the port and reducing human traffic. It goes beyond that to include putting things in place to make Nigerian ports competitive.
In developed countries, seaports are taken away from other encumbrances because the presence of trailer tankers littering the port area makes it difficult for our ports to be user friendly and to generate the needed revenue.
How worried are you over the decaying state of our port roads?
It is sad to note that the past three administrations of Olusegun Obasanjo, Musa Yar’Adua and Goodluck Jonathan have made no serious commitment to the development and upgrading of port infrastructure. Jonathan administration made skeletal effort to rebuild the Apapa-Oshodi Expressway but that effort was not brought to conclusion as port users, operators and commuters still groan in misery to access the ports in Lagos.
Since the last decade, the roads leading to the ports including Ijora-Wharf and Apapa-Oshodi Expressway have gradually decayed beyond manageable state and government is yet to intervene. The port roads have been neglected and Apapa environment has not received the maintenance that it deserves despite the fact that the roads are over stretched with the movement of heavy duty and articulated vehicles with containers and petroleum products.
If government knows what it is losing from the dissertation of the port, they would have restructured the ports to earn more revenue especially now the economy is struggling, and oil revenue has nose-dived. We believe that if the port is properly harnessed, it would yield the desired revenue because our maritime sector is worth close to $12 billion annually that remains untapped, and this can help to sustain the economy. By now, West African billed ships supposed to be coming to Nigeria before going to other countries in the region. This is why we need a serious stakeholders meeting where all the issues would be discussed for growth.
Movement of cargo especially containers in and out of the port is now very tasking as empty container carrying trucks stay weeks on the road before getting access into the port while loaded trucks find it difficult to leave the port area due to traffic. Severally, container carrying trucks upturn on the bad portions of the road and end up damaging the goods in the container. This has lost implications on shipping companies owns the damaged containers; government that loses revenue to low volume and operators that invested in terminal development.
Importers pay dearly as demurrage for not taking delivery of their consignment and not returning the empty containers as when due. Also, clearing of cargo takes minimum of three to four weeks because the bad state of the road affects the speed of cargo clearance, transportation of the cargo to importers’ warehouse and the cost of storage paid to terminal operators.
Due to the bad state of port access road, the cost of evacuating cargo from the port has skyrocketed Formally, it used to take about N50, 000 to take container to a warehouse in Lagos but now it takes minimum of N100, 000 while it takes about N300, 000 to take container to a warehouse outside Lagos instead of less than N200, 000. Moving from Apapa to Mile 2, one would see more than three container carrying trucks upturned on the road, and this constrains movement.
What in your view is the way forward?
The Federal Government may have very good reason for banning the 41 selected items from accessing foreign exchange due to the scarcity of FX but our neighbouring countries have fared very well under open market economy. Nigeria needs to operate a complete open market economy and allow market forces to drive business as importers would be compelled the import and sell their goods based on the rate of exchange at which the goods were imported though these can only high inflation.
We need to encourage our manufacturers but not through banning importation but through good policies. For instance, a good policy that gives credit facility on affordable rate would go long way to encourage manufacturers to expand their products, drive export of non-oil cargo and make the country to remain profitable.
While we are waiting for beneficial economic policies for the port industry, we still believe that thing would be better but the important thing is that government needs to diversify the economy from being oil driven, make very good use of the opportunity provided by the maritime industry, agriculture and mining sectors.
Is there any need for port expansion?
We expect that Nigeria should have had four standard seaports because concentrating all the port activities in Lagos alone is disadvantageous to the nation. Expand and make all the existing ports functional including the inland ports in Lokoja and Onitsha to ensure the ease of doing business. We have two major ports in Lagos and the state government is considering building another two deep seaports in Lagos at the negligence of the other ports.
I remember in 80s when Warri port was still functional and lot goods go through Warri and Nigeria Ports Authority (NPA) made a lot of revenue from Warri port, but today the port is shadow of itself. We want the government to diversify the seaport so that port business can become competitive and this will help to create ease of doing business and reduce pressure on road infrastructure around Lagos.
How do we grow export trade?
Nigeria needs to properly regulate its export trade to compliment for the shortfall in volume of import. Given the state of port access roads and the cumbersome documentation procedure involved in pre-shipment inspection, as well as the poor system of regulating Nigerian export cargo especially agricultural produce, European and American buyers always reject most of these exports. This is as a result of poor supervision and delay. Nigeria has a lot of edible foods struggling to be exported and this is where agencies like the National Agency for Food and Drug Administration and Control (NAFDAC) needs to come in and help Nigeria determine how best to build standard system for export of farm produce so that the economy can earn foreign exchange.
What is the problem with the auto policy; can you say it is lack of political will or the problem is with the assembling plants themselves?
The Federal Government came up with the current auto policy with the mindset of encouraging made-in-Nigeria vehicles but the current happenings have shown that most of the licensed assembling plants are yet to meet the expectations. Therefore, government needs to revisit the policy and reduce vehicle tariff because it encourages smuggling through the land borders. The tariff is so high that it takes as much as N1million and above to clear a 10-year old vehicle, and this has to come down to discourage Nigerians from bringing cars from Cotonou port and Niger Republic. Almost 60 percent of imported vehicles in Nigeria came through Cotonou and most of them are smuggled in.
There are some reshuffling of Customs controllers; how commendable is that exercise?
The current Customs Comptroller-General (CGC) has appointed technocrats to head Customs commands. For instance, Apapa area controller, Willy Egbudin has proven to be a seasoned Customs officer, who is doing a good job in the area of documentation and valuation of import. He has utilised his expertise to rake in billions of naira worth of revenue into government coffers through Customs at this time of low import volume. Therefore, we call for appointment of such officers.
Egbudin has restructured cargo examination, ease delay and block revenue leakages in Apapa. He has made a remarkable improvement in Apapa by positioning the officer to strictly enforce all trade rules guiding customs operations including the Customs & Excise Management Act (CEMA).
AMAKA ANAGOR-EWUZIE