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A stakeholders’ forum organized by the Lagos Chamber of Commerce and Industry proffers remedies for the delay in the clearance of cargoes at the Nigerian ports.
By Dike Onwuamaeze
For many years, the tedious procedures of clearing goods from Nigerian ports have become a regular feature of Lagos Chamber of Commerce and Industry (LCCI) addresses on the state of the nation’s economy. On each occasion, the chamber will bemoan the negative implications of the delayed cargo clearance on the country’s economy and call on relevant government agencies to take action to quicken the process. However, on March 25, the chamber approached the matter differently by convening a Stakeholders Forum on Trade Facilitation through Effective Port Operations in Nigeria. The forum attracted participants from the Nigeria Customs Service (NCS), Nigeria Shippers Council (NSC), terminal operators, importers and freight forwarding agencies.
Subomia Ajumogobia, chairman, Advocacy and Public Affairs Committee of the LCCI, set the tone for the day’s discussion by highlighting the growing concern over the persistent challenges in the trade facilitation process at the nation’s port and its implications for the cost of doing business in the Nigerian economy. According to him, importers are often compelled to pay huge demurrage charges for delays at the ports which were not of their own making.
Speaking in the same vein, Remi Bello, President of LCCI, said that although the efficiency of ports operations has become a major driver of trade and economic activities in many countries, the reverse is the case in Nigeria. Over the years, users and operators at Nigerian ports have faced persistent challenges with its attendant implications on cost and ease of doing business. These challenges include the duplication of responsibilities by government agencies operating in the ports, ambiguity in import documentation and clearance procedures, arbitrary charges, high demurrages and poor regulation of terminal operators. Other challenges are delayed issuance of the Pre-Arrival Assessment Report (PAAR), weak regulatory framework to protect port users and high charges by shipping companies. In addition, there are reports of under hand activities by officials within the country’s ports.
“In all these, the importers and private sector get to bear one burden or the other. Also, real economic activities and the overall development of the country are constrained. For an import- dependent economy like Nigeria, getting our ports, which are major gateways to the country, to work efficiently and eliminate all the bottlenecks is germane to a successful and prosperous economy,” Bello said, adding that the aim of the forum was “to ventilate these issues from the standpoint of major stakeholders at the ports with a view to identifying and resolving all challenges and enhance trade facilitation.”
Hassan Bello, executive secretary and chief executive officer, Nigeria Shippers Council, agreed that businessmen experience difficulties in clearing their cargoes. He argued that the ease and the cost of transactions at the ports are not competitive in spite of the progress recorded in port development due to the ongoing port reform. “We must first of all streamline procedures at the ports. The clearance procedures are cumbersome and very primitive for international ports. We have seen investments made by terminal operators and have acknowledged them. But we must have efficient and transparent transactions that are built on efficient electronic system to block leakages and make clearance procedures modern,” he said.
The vision 10 years ago when the implementation of the current port reform commenced was to make Nigeria a maritime hub. But a hub does not come about by mere declaration without vital elements that make efficient service delivery possible. These elements include efficient electronic transactions, the presence of economic regulator to coordinate the activities of players in the port; efficient haulage system for taking cargoes in and out of the ports and the existence of functional inland dry ports that will serve as ports of destination and origin with all the paraphernalia and legal status of a port. These inland ports will free the sea ports and serve as designated places for scanning and physical examination of containers by the NCS.
Other features of a maritime hub include minimal human presence and elimination of touts so that only professionals will operate at the ports. There are expectations that the NSC, which was recently appointed the economic regulators of the Nigerian ports by President Goodluck Jonathan, will roll out measures to professionalise the freight forwarding business in the country. These measures will include a minimum capital base for licensed freight forwarders and the condition that they maintain their own warehouses. “We must sanitise the ports. Somebody said that we do not have ports in Nigeria but water fronts. But we are going to have ports in the real sense of the word. Modern and efficient transport system is a sign of serious economy. So we must make sure that what happen in other jurisdictions are possible in Nigeria so that we can take our cargoes within 48 hours,” Hassan Bello said.
However, the chief executive of the NSC admitted that progress has been achieved with the handing over of the ports to private terminal operators. According to him, there has been tremendous improvement in certain key areas like turnaround time for ships and less dwell time for cargo. The country’s ports are also attracting transit cargoes from neighbouring countries such as Niger Republic, with potential for 300,000 metric tonnes of cargoes annually. “Previously, they used to ship through Ghana. But they are coming back because of the improving efficiency at our ports,” Bello said.
One of the new agents of change as a result of the port reform is the APM Terminals Apapa Limited, a private terminal operator with 25 years concession agreement since 2006. By the time APM took over the Apapa port, according to Neil Fletcher, its chief commercial officer, it was characterised by long vessel waiting time of up to 30 days, high pedestrian traffic, pilferage of containers and general poor condition of equipment. However, the situation today has improved tremendously. APM claims to have reduced the dwell time for vessels to one day while the average container dwell time has come down to 18 days. Likewise, average berth and crane productivity are currently 30 and 15 moves per hour respectively, while the average throughput is 50,000 TEUs per month. The terminal handles 46 per cent of Lagos container imports and has invested $220 million on equipment, infrastructural development, process automation, safety and local employee training.
Another player at the ports which has carried out series of reforms to make trade facilitation easier and less cumbersome is the Nigeria Customs Services (NCS). It was represented at the forum by Bashiru Abubakar, comptroller, Post Clearance Audit, Zone ‘A.’ He said that the reforms have seen the customs moved from pre-shippment to destination inspection in 2006. It has also automated its clearance procedure with the introduction of Asymmetric Customs Data (ASYCUDA) which was a solid software flat form for customs declaration. This is to ensure that electronic clearance of goods that allows importers not to have contact with customs officials from the beginning of documentation to duty payment is possible.
Moreover, the NCS set up a website that is capable of guiding an importer at every stage of the import process. This website gives detailed information on dutiable goods, documentation and classification process, import duties, taxes and levies where necessary as well as other government agencies the import needs to contact. Yet, 48 hours duration for goods clearance is still elusive. Abubakar attributed delays to non-compliance with clearance procedures, false declaration, poor documentation and classification and the use of touts to clear goods from the ports. According to him, “only complete and honest declaration is the gateway to speedy clearance of goods.”
However, another reason for delay in the clearance procedure which the NCS would not acknowledge is the frequent breakdown of its electronic network. This, according to Temi Taiwo of Dawa International Limited, is the reason the customs which is expected to issue Pre-Arrival Assessment Report weeks before the arrival containers does so six weeks after the cargo has gotten to Nigerian ports.