Sharp drop in cargo throughput to reduce revenue generation

The recent sharp drop in number of ships calling at the nation’s seaports indicates a negative impact of government’s policies on the maritime sector, leading to a significant drop in revenue generation, lower profit margins and shift in consumption patterns, BusinessDay findings reveal.

According to data obtained from the Nigeria Ports Authority (NPA) by Financial Derivatives Company (FDC), shipping indicators tracking the number of ships awaiting berth across the country show a lower cargo throughput hovering around 25 vessels. This suggests a 64 percent drop in imports into the country in March 2016 from 70 vessels in 2014.

It further suggests that lower profit margins and a shift in consumption patterns will continue to hurt imports, while pointing that imports may increase in April, due to an increase in orders for goods such as petrol.

Only last week, Hameed Ali, comptroller-general of the Nigeria Customs Service (NCS), revealed that the service had a revenue shortfall of N230 billion in the last quarter of 2015. Ali attributed the shortfall to the Central Bank of Nigeria’s (CBN) policies, adding that the service has pleaded for sympathetic consideration by the CBN to review the policies.

Also in February, the Apapa Command of the Nigeria Customs Service raised an alarm over the massive drop in revenue accruable on bulk cargo imported into the country through the Lagos Ports Complex (LPC).

Willy Egbudin, Apapa Customs’ area controller, said the Apapa port was notable for bulk cargo importation, but lamented that in the last couple of years, there had been a sharp drop in the volume of bulk cargo imported through the port, which in turn had also affected revenue collection by the command

According to Egbudin, bulk cargo importation has always been the major item that boosts revenue collection of the command. The Command’s boss pointed out that from the figure collected so far, bulk cargoes accounted for N5.6 billion from the total N23.4 billion revenue collected for January 2016.

He however described the N5.6 billion collected as a lean figure when compared with figures for corresponding years. He also said other importation generated by the command stood at N17.7 billion. In 2014, he said the command realised N301 billion as revenue, but in 2015 it slightly came down to N288 billion and an estimated N400 billion target is given the command annually.

Most members of the Organised Private Sector (OPS) and the manufacturers have not fared well following the apex bank’s classification and definition of some of the products restricted from access to foreign exchange, due to the fact that some of the items are raw materials used in the course of production in various factories.

The Lagos Chamber of Commerce and Industry (LCCI) had raised the alarm at different occasions that many companies are on the brink of collapse because of inability to access foreign exchange for raw materials and other critical inputs. It claimed that many small businesses have moved to neighbouring countries to effect transfers to their suppliers abroad, a situation that encourages operation of offshore bank accounts to the detriment of the Nigerian economy.