Analysts expect government to return 40% cargo loss at port by reducing cost of doing business

For port business to recover its lost volume in 2016 amid challenges of the Central Bank of Nigeria (CBN) foreign currency restriction, government have to woo back Nigerian importers and exporters by reducing the cost of doing business at the port, analysts say.

The analysts, who say Nigerian seaports lost about 40 percent of its cargo to ports in neighbouring countries in 2015, also attribute this to the very difficult operating terrain that has bloated the cost of doing business for shippers (importers and exporters).

As confirmed by the World Bank, Nigeria, which ranks 169 out of 189 countries in the latest global ease of doing business report, is one of the most expensive countries to do business. In the port precisely, shippers are not only compelled to pay many bills as import tariff, but also face cargo clearing bottlenecks that result to payment of high demurrage and storage charges to shipping companies and terminal operators.

“Government needs to encourage genuine manufacturers and importers to bring in critical raw materials by reducing the cost of clearing raw materials from the port. This is because high cost of clearing transforms to higher cost of production, which adds to the market prices of finished products,” Jonathan Nicole, president, Shippers Association of Lagos State, told BusinessDay in an interview.

Nicole, who is confident that the maritime sector can substitute oil and gas in terms of revenue generation, also said the difficulty and high cost of doing business at the port had resulted to people diverting their businesses from Nigerian ports to ports in the neighbouring countries of Benin Republic, Ghana, Ivory Coast, Dakar and Guinea Bissau.

“To achieve this, the Nigerian Shippers’ Council (NSC), which is the interim economic regulator for the port, has to be very proactive because the nation’s maritime system is infected with rent-seekers, and we have to contend with their excesses. The idea is to build an industry that we can handover to the next generation, thus the need to reduce the sufferings that discourages investment.

“As an importing nation with local industries that are not sufficient to provide Nigerians with the needed domestic goods, importation is only acting as a backup to support the efforts of manufacturers, and shippers have taken some of the responsibilities of government by creating employment for millions of Nigerians,” he said.

Tony Anakebe, a maritime analyst, said Nigeria needed to enthrone a seamless clearing system that would make it easier for importers to clear and take delivery of their consignments. To him, there is need to reduce the rate of avoidable demurrage and storage charges that importers pay to shipping companies and terminal operators, which in turn results to high cost of doing business.

“The number of government agencies involved in cargo clearance at the port has to be reduced so that importers could be clearing their goods within 48 hours in line with the international best practices, and this will also reduce corruption.

“We need an automated container tracking system between the shipping companies, terminal operators and Customs to help fast track cargo release,” he said.

John Jenkins, managing director of Ports and Cargo Handling Services Limited (PCHSL), suggested the need to have more deliveries and full day operations at port on Saturdays and Sundays.

“Customs needs to be more flexible by conducting examination of containers on weekends and scanning containers 24/7, including the weekends. If this economy is really going to grow and for us to reach our full potentials, everybody is going to brace up for the challenges ahead,” he said.