Inefficient clearing system, corruption cost Nigerian ports N1trillion yearly – Report

A report on the performance of Nigerian ports has revealed that the country loses over one trillion naira every year to inefficiencies, process failures and corruption in the cargo clearing process.

The report titled Nigeria: Reforming the Maritime Ports, which was commissioned by the Centre for International Private Enterprises in collaboration with the Lagos Chamber of Commerce and Industry and Financial Derivatives Company, was publicly unveiled in Lagos on Friday at the LCCI public-private discussions on port reforms.

The report stated that while the efficiency of port processes is a major driver of trade and economic activities across countries, Nigeria’s case has been rather gloomy.

It says over the years, users and operators at the Nigerian ports have been facing lingering challenges and bottlenecks which include infrastructure shortcomings, policy and regulatory inconsistencies, overlapping functions and duplicity of roles among government agencies operating within ports across the country.

The report also pointed out that a lack of clear legislation, ports governance remains prone to inefficiency and corruption. It added that under such condition, companies in the Nigerian ports have to deal with bureaucratic red tape, constant delays, high costs, harassment, and demands for illegal charges by representatives of government agencies operating at the port. These, according to the report, diminish the seaport’s potential to create about 10,000 new jobs annually and about 800,000 jobs on the long run.

The Nigeria: Reforming the Maritime Ports report claimed that Nigerian seaports remain the most expensive in the West African sub-region attributing this to the cumbersome Customs documentation requirements and double charges imposed on importers and exporters.

Using a semi-structured survey, respondents of the study listed the documentation processes, requiring 25-33 different papers from multiple agencies as the biggest issue contributing to time and cost delays.

About one-fourth of the respondents sampled by the report also complained about the duplication of functions of the multiple agencies within the ports while 29% of those surveyed in the report say multiple cargo inspections are the most critical of operational bottlenecks at the nation’s gateways.

It is, however, not all doom for the industry according to the report, as it stated that Nigeria’s ports continue to see substantial increment in gross tonnage by 3.3% – Compounded Annual Growth Rate – to 144.2 million tons between 2010 and 2015. The annual growth rate of 1.8% is expected to rise until 2021 despite the challenges in the sector.

However, these growth projections are premised on the assumption that the nation’s ports will continue to be the preferred means of transporting goods in and out of the ECOWAS sub-region.

In its recommendations, the report pointed out that authorities should embark on immediate port reforms.

These reforms are expected to lead to faster clearance of goods, shorter waiting times for ships awaiting berth, and eliminating redundancies in the functions of the several regulatory government agencies in the ports.

It also called for the adoption of an Integrated Advance Cargo and customs clearance system, with scanning, sealing and tracking capabilities; the establishment of a National Trade Data Centre and implementation of a Single Window platform.

The report also called for more private sector investment in Nigerian ports, reduction in the number of government agencies to 6 from 14. From the policy end, the report called for immediate passage of certain legislative bills that will aid port reforms and improve performance. These bill include the National Transport Commission Bill and the Port and Harbour Bill (PHB).

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