Nigeria has the greatest potential with its maritime industry and so we need to utilise our resources such as the 900 nautical miles of coastline, 572 inland waterways, and 10,000km of navigable waterways and others. The critical issues to be addressed are: new economic agenda for the sector, attention given to coastal states. We expect a total port reform, direct foreign investment policy that is workable, cabotage regime, green field development, maritime security, free trade zone restrictions, trade tariff, all these should be revisited. Also, the new administration must overhaul the sector, especially the Nigeria Customs Service. They should look at the huge number of checkpoints along Badagry Expressway to boost business activities along that corridor and generate more revenue to revitalise the economy.
There is need to strengthen the institutional capabilities of maritime agencies, thereby positioning the country as a hub of maritime activities in West and Central Africa to boost the economy. Based on its potential, the maritime sector has come under siege by criminal elements who orchestrate acts of piracy, sea robbery, arms proliferation, crude oil theft, terrorism, migration, illegal and unregulated fishing and oil theft within our territorial waters and that must be looked into. Statistics show a total freight cost estimate of between $5 billion and $6 billion annually, while the maritime component of Nigeria’s oil and gas industry is worth an estimated $8 billion alongside seaborne transportation, oceanic extractive resource exploitation and export processing zones. Therefore, there is no other time than now for the incoming administration of Asiwaju Bola Tinubu to protect the nation’s over $14 billion maritime trade. I must say that a safe, secure and efficient shipping industry would assist in revitalising and diversifying the economy away from crude oil exploration to a vibrant maritime trade.
The president-elect, Asiwaju Bola Tinubu, should create Federal Ministry of Maritime Affairs where agencies like National Inland Waterways Authority (NIWA) and others will be part of it to harness the full potential in the nation’s maritime industry and harness blue economy for revenue generation. The creation of the maritime ministry will enable Nigeria to fully explore its blue economy project to increase revenue earnings for the Federal Government, create employment for Nigeria’s teeming youths and add value to the nation’s economy. The new administration when sworn in should ensure the reduction of 15 per cent levy on used vehicles and also increase the age limit of imported used vehicles to 15 years from date of manufacture. The president-elect should appoint a serving Customs Officers as Comptroller general of the Nigeria Customs Service because the current CG has stagnated the growth of cargo clearance and Customs operations in the country. The maritime sector is now the revenue basket of Nigeria aside oil and for the incoming government to successfully reap the revenue accruing in the sector, I want to urge the administration to place maritime professionals as the think tank of the industry either as agency heads or as board members. I also want to appeal to the President-elect to appoint Special Advisers on Maritime and Customs Affairs. This will help his government to have professional and technical advice that will grow the industry and generate more revenue especially with the full harnessing of the blue economy, which will create millions of employment opportunities for our teeming youths.
The incoming government has a lot to offer the industry for sustainable growth of the economy in order to contribute to the gross domestic product (GDP), reduce unemployment and develop the economy. The country has relied so much on the crude oil economy and I urge the President-elect to focus on other sources, particularly the maritime industry, shipping development and agricultural sector.
The maritime industry is crucial for the country’s economy and sectorial reforms have become urgent especially as legacy trade facilitation issues have persisted and become intractable. For the incoming government and the maritime sector to generate all that the sector has lost, government and industry players must aggressively address the bottlenecks crippling trade and the economy. I expect an acceleration of reforms in the maritime sector. We should see more serious commitments to better use of technology, full implementation of a single window for cargo clearance processes, better access to the ports and more investments in port infrastructure.
The incoming administration must work on the multiple taxation by Customs at the port because it is discouraging importation, which has given room for smaller ports in neighbouring countries to boom. Customs extreme duty on imported goods is crippling trade as the effect has been felt in the decline in import and manufacturing. Imports are no longer coming into the country because the customs duty is not stable and varies in the different Customs commands. The Pre-Arrival Assessment Report (PAAR) is N3 million for 1×20 containers and N5 million for 1×40 containers at Tin Can. Initially, it was N1 million for 1×40 containers but because Customs want to meet up their revenue target, they arm twist importers and their agents. As a result of this, many importers have divert their containers and this is affecting business a lot.
The new administration should address the illiquidity in the foreign exchange market and stem the depreciation of the naira exchange rate. The fluctuating rise in dollars against the weakened naira is militating against maritime business. The effect is the high cost of goods in the market. What was used to import and clear 20 containers cannot do more than five containers now. I want to urge the government to come up with a conscious policy that will stabilize the naira against the dollar.
There is a pressing need to ease the cargo clearing processes and vessel turnaround time at the ports to ensure ease of doing business. These include shorter vessel turnaround time by reducing delays, curtailing bureaucracy and curbing extortions in the clearance of vessels. Also, Customs server breakdown has become more frequent and a major bottleneck in cargo clearance at the ports in Lagos especially the Vehicle Identification Number (VIN) valuation policy on imported vehicles. There is need to fix the problem of frequent breakdown of Customs servers, which has caused undue delays and demurrage payments by importers, and there is need for better engagement of stakeholders in the implementation of the vehicle identification number system. Also, there is need for acceleration of the implementation of single window system to minimise human interface at the ports, and there should be reduction in the number of agencies and approvals needed for clearance of cargo at the ports. There should be deployment of technology at all stages of approvals and documentation.
I want to urge the government to engage more providers of IT and telecom infrastructure for Nigeria Customs Service. Having only one has caused more loss to the country, importers and agents. The constant network fluctuation and server breakdown is making importers and agents lose billions of naira to demurrage.
I want to urge the incoming administration to implement friendly trade policies to streamline the multiple agencies that are cluttered in the ports and hinder trade facilitation. If the right people are not on board, the wrong ones will frustrate the single window implementation. Because of corruption, agencies don’t want to come together and ensure the implementation of a single window and this has caused more harm to the sector.
The new administration has to see to the major challenge that has taken serious toll on the ability of maritime haulage and logistics sector to deliver efficiently and profitably. This is as a result of the artificial barriers of extortion within the ecosystem. There are over 60 checkpoints of extortion from Ijora Olopa, Costain, Mile 2 and down to the Tin Can and Apapa ports where uniformed and ununiformed men collect unofficial and unreceipted monies from truckers. Let me say that truckers, before accessing the ports to pick up imports or drop off export containers pay between N5,000 and N10,000 to officials assigned to ensure sanity on the port access roads, who are in collaboration with hoodlums. For truckers who refuse to pay, their trucks will not be allowed passage and would be damaged. The trucks in the process of being damaged sometimes lose control and kill people while some containers fall off the trucks and cause ghastly accidents.
I want the incoming government to address the problem of artificial extortion barrier, which is the bane of trade facilitation, port and logistics efficiencies in Nigeria maritime industry. There is need for review of the current call-up system with a view to making the system efficient and less vulnerable to corruption and extortion. While other countries deploy multimodal transport systems in cargo evacuation from the ports to hinterlands, Nigeria still depends on roads through trucks, which has led to traffic congestion on the port access roads.
The maritime industry should be provided national fleet and indigenous vessels, which would create jobs for the teeming youths and improve revenue generation for the country. The vessels would enable cadets and seafarers to have more seatime training to compete globally just like the Philippines that earns from its maritime sector and exportation of seafarers. Also, the seaports need adequate security, noting that insecurity is depriving investors and importers to come and trade in the country.
Patrick Osita Chukwu
The seaport access roads should be made a priority in 2023 and every other thing will fall into place. The bad state of the roads is the major cause of the problems we have at the ports. I am talking from a freight forwarding perspective. It is because the roads are bad that containers spend more than expected time inside the ports, cargo owners are forced to pay more in demurrages on their cargoes that are trapped inside the ports and as a result of this, some importers are being forced to take their cargoes to neighbouring ports. So if the roads are fixed, and there is a seamless movement of cargoes out of the ports, you will see that demurrage payments will be reduced to the barest minimum, and the cost of clearing cargoes at Nigeria’s two busiest ports – Apapa and Tin-Can ports- will become reduced.
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