‘Cost, cargo dwell time high in Nigerian ports despite reforms’

Nigerian ports in the past 53 years

We have got a lot of processes right in the Nigerian port system, yet a lot more are yet to be got right. The Federal Government has embarked on reforms towards improving the nation’s maritime industry but so many things are yet undone. The cost of clearing goods at the port, for instance, is still very high and there is need to curtail excess taxes that are being paid by importers in the port. In the past, we used to have 7 percent and 1 percent charges, VAT as well as other charges. Many of these charges have been reduced, but more needs to be removed so that the importer will find it less cumbersome and cost-effective to clear goods at Nigerian ports rather than clearing from ports of neighbouring countries.

The Federal Government recorded a milestone in 2005 with the concessioning of the port to private operators. Port concession is the stock-in-trade because the port system is better operated by the private sector than the public sector. However, the Federal Government needs to install a regulator to oversee the operations of all the concessionaires so that they will not take the advantage of their position to rip off importers.

The Nigerian Ports Authority (NPA) and the Nigerian Shippers’ Council (NSC) have been given some limits of regulatory roles but there is no clear indication of who manages the terminal operators in the port. The roles of these agencies have to be clearly defined so that port users will know who to refer issues to at all times. All these will help to fast-track cargo clearance in the port because port users and operators will be held responsible for lapses identified in cargo clearance.

Secondly, the number of vessels that call Nigerian ports annually has increased tremendously, and this shows that Nigerian ports are developing because the cargo throughput and volume of vehicles that come into the country through the seaports have grown more than what it used to be in the period before concession. I believe that Nigeria can grow its GDP and revenue through effective management of the port system.

There is need for the government to ensure that the port access roads, especially Apapa-Oshodi Expressway, is motorable and congestion-free. Also, there is need to ensure that the port is connected to the national grid so that the port and its environment can benefit from the ongoing power privatisation. This is because the continuous use of self-generated electricity by the concessionaires adds to the high cost of clearing goods at the port.

The Nigeria Customs Service (NCS) through its reforms has been improving in the process of cargo clearance in the port, which has enabled them to increase the volume of revenue generated into the federation account annually more than it used to be.

Cargo dwell time 

In terms of cargo dwell time, Nigeria has not made headway because a lot of vast interests are involved. After the port was concessioned, the dwell time of cargo came to two weeks and in some cases one week, but now it seems as if we have gone back to square one. This is because some of the concessionaires and destination inspection service providers do not have enough equipment and space to handle the volume of cargo that comes into their terminals.

The dwell time of cargo needs to be reduced as quickly as possible. The entire terminal operators, shipping companies and Customs need to be connected to a central data system so that operators can share information so that no operator will have any reason to withhold a cargo that has been released by Customs on the basis lack of knowledge. This is the system that is applicable in other ports in the neighbouring countries. This will fast-track cargo release as it will enable the release of goods within two to three hours’ timeframe, and also bring to the fore those agencies and issues that act as bottlenecks to cargo clearance. The dwell time of cargo varies by days. In some terminals it is 21 days, while in some others it is either lower or higher.

However, government needs to come up with a system that will identify the problems, where they are from and how to tackle them if the issue of high cargo dwell time must be tackled in Nigerian ports.

By: Uzoamaka Anagor