Stakeholders are urging the Nigeria Customs Service (NCS) to embark on trade facilitation as a new way of doing business at the ports. OLUWAKEMI DAUDA reports.

Towards the end of last year, the Minister of State for Budget and National Planning, Mr. Clem Agba, said his ministry was in discussion with the Nigeria Customs Service (NCS) to change from a revenue-generating agency to a facilitator.

According to the minister, a shift in focus would expand the country’s revenue base by attracting more businesses, boost trade and manufacturing.

Some stakeholders, who spoke with The Nation at various fora, agreed with the minister. They said the economy requires the Federal Government, through the leadership of the Customs, to adjust its operation to ensure that they do not lag behind in innovation and technology.

The stakeholders added that it is vital for the government and the Service to incorporate the private sector in its trade policies and ensure that there are no barriers.

An importer, Mr Lake Adetoro said, reducing unnecessary delays by Customs and costs by shipping firms and terminal operators would attract investments, and support the growth and job creation agenda of the President Muhammadu Buhari administration.

An expert, Mr Samuel Ibidapo, said the failure of the government to prioritise trade facilitation had affected the economy. “There is the need for the government and the Service to give trade facilitation a chance this year,” Ibidapo said.

 

Goal of trade facilitation

The primary goal of trade facilitation is to make trade across borders faster, cheaper, and ensure its safety and security. It simplifies and harmonises formalities, procedures, and the related exchange of information and documents between the various partners in the port supply chain.

Trade facilitation has emerged as a key factor for international trade efficiency and the development of other countries.

This, findings have shown, is based on its impact on competitiveness market integration and its importance in attracting direct foreign investments (FDI) to the nation.

 

Principles of trade facilitation

The fundamental principles of trade facilitation are transparency, simplification, harmonisation and standardisation.

Transparency promotes openness and accountability of a government’s actions.

Ibidapo explained: “Simplification is the process of eliminating unnecessary elements and duplications in trade formalities, processes and procedures that we have in our ports.

Harmonisation “is the alignment of national procedures, operations and documents with international conventions, standards and practices by the Nigeria Customs Service and other government agencies operating at the ports. It can come from adopting and implementing the same standards as partner agencies, either as part of national integration process or as a result of business decisions.

“But standardisation is the process of developing formats for practices and procedures, documents and information generally agreed by various agencies operating at the ports. Standards set by all the concerned agencies are then used to align and, eventually, harmonise practices and methods to be used in importing and exporting cargos at the ports.’’

To achieve these principles, the analyst said, there should be cooperation among government agencies like Customs, Standards Organisation of Nigeria (SON), National Agency for Food and Drug Administration and Control (NAFDAC) and with the operators and business community.

 

Importers and other stakeholders

Due to increased competition as a result of globalisation, importers, exporters and other critical stakeholders who spoke with The Nation, are demanding a cheaper, faster and reliable way of taking goods in and out of the seaports to remain competitive and these have to be championed by the leadership of Customs who are seeking to collect more revenue on  consignments coming to the port.

“There is the need for the leadership of the Nigeria Customs Service to understand the position of the business sector and find mechanisms to ensure that its laws procedures and processes are not barriers to trade  facilitation.

“Also, the  pressure on Customs by the Federal Government should be  to ensure  business operations are supported through quick movement of cargo at points of entry and reduction of  avoidable costs like demurrages, unnecessary  physical  examinations, and unnecessary confiscation of goods by its officers before proper investigations are carried out.

“The relationship  between the Customs  and the majority of the stakeholders is  strained as they claim that there is no  transparency  on  how Service carries  its  mandates  to  the  extent that  the businesses  sees  customs  administrations  as  barriers  themselves  to  trade.  An  effort  by the leadership of Customs  to  address  barriers  is  regarded  as  lip  service  and  this  continued mistrust requires transformation before any trade facilitation mechanisms can be said to have been put into place by the Service.”

 

Implementing trade facilitation

Implementing trade facilitation without being known by the intended beneficiary a waste of resources and time. These include calculation of taxes, appeals procedures, explanation of trade agreements entered by the government and  laws  and  regulations  related  to  origin of cargoes and  other preferences.

For so many years, trade facilitation has gained prominence in the international political agenda which has culminated in the conclusion of the Agreement on Trade Facilitation at the World Trade Organisation (WTO) as well as of wide international technical assistance programmes for developing and transition economies.

Nigeria, the former President, Association of Nigerian Licensed Customs Agents (ANCLA), said would have made significant progress in lowering trade tariffs and increasing efficiency at the ports, if the Customs has embraced trade facilitation.

He identified lack of transparency about regulations, redundant and lengthy clearance processes, and multiple documents requirements in various formats and data as factors responsible for the increase in the costs and time of doing in our ports

“The worldwide distribution and sourcing cycles, along with just-in-time and just-in-sequence logistics services and the emergence of e-business, has created pressure on governments to ensure efficient, fast and reliable border crossing and clearance procedures. Now is the time for governments to realise that our export economies heavily depend on efficient import processing, hence the need to have a holistic approach for a more efficient management of end-to-end trade transactions,” he added.

Shittu said it is more important to achieve trade facilitation to enhance administrative efficiency and effectiveness, reduce costs and time to markets, and increase predictability in maritime trade across the country and beyond.

 

The gains

There are potential gains from trade facilitation for governments and the business community. Public entities will profit in terms of enhanced trade tax collection, better use of resources and increased trader compliance. A more efficient and transparent delivery of public services will allow the government to maintain high security levels and effective government control, while diminishing opportunities for corruption.

Traders will gain in terms of higher predictability and speed of operations and lower transaction costs, resulting in more competitive exports.

“For the Nigerian ports, reducing unnecessary delays and costs will attract investments, and supports growth and job creation.

“Implementing trade facilitation reform programmes certainly has a cost, and facilitation measures need to be prioritised in order to maximise benefits,” said an importer, Mr Leke Adetoro, said.

A recent World Bank research on aid effectiveness, he said, finds that $1 of aid for trade facilitation translates into $70 in exports for recipients.

But a senior Customs officer, who craved anonymity, said: “No doubt, Customs is a key player in trade facilitation, focusing on these agencies and their processes alone is not sufficient. Trade facilitation has to encompass the entire trade environment, actors and processes involved in a transaction. An international supply chain perspective should be adopted.

“A supply chain embraces activities necessary for goods to be produced and delivered to the final consumer. Such activities include sourcing of raw materials, preparing for transport, requesting an import license, preparing documentation for Customs clearance, clearance, payment, and delivery to the consumer. As a minimum, a supply chain involves two parties, the seller and the buyer. In reality, a supply chain involves many different parties.’’

A stakeholder, Chief Obina Best, advised Customs to be more concerned with trade facilitation. “The Federal Government is not helping matters in the maritime industry. Customs are focused on revenue generation instead of facilitating trade. And this is due to pressure from the government on Customs for revenue generation. You see Customs struggling to meet targets set for them.

“When you give target to Customs, you are increasing the inflation rate. The end user pays for the costs arising from the pressure on Customs.

“Customs are stretching port users. The Federal Government should deemphasise revenue generation. You find that after work, some officers go home in mufti because they are afraid that they might be attacked if those they had offended identified them.

“If the Federal Government is not putting pressure on Customs, they will not overstretch importers.

“My area of concern is how to bring down inflation. The government should do something. It should stop giving Customs targets. This is not done in any part of the world. Customs’ duty is to facilitate trade. This is why we are members of the World Trade Organisation,” he said.

While appealing to the government to fix major roads leading to major markets from the seaports, he said the deplorable state of the roads was also affecting the cost of movement of containers from the various ports.

He further appealed for the reduction of security checkpoints between Port Harcourt ports and Onitsha.

“The road is another thing. Before now the fare from Port Harcourt to Aba and Onitsha from the ports was less than N150,000, but now from Onne to Aba is about N450,000, far higher than Onne to Onitsha. The situation of the road made that of Aba to be higher. These factors affect inflation.

“Again from Port Harcourt to Aba, you meet more than nine Police checkpoints on a road that is less than 35 kilometres. From Port Harcourt to Onitsha, you meet up to 15 police checkpoints. But from Lokoja to Kaduna, you don’t see up to four Police checkpoints. These issues have been on before this Indigenous People of Biafra (IPOB).

“At the end of the day, you see that importers are forced to raise the price of their goods. And all these affect the inflation rate,’’ he added.

He urged the Nigerian Shippers Council (NSC) to curtail the excesses of shipping lines, saying they have become exploitative.

“The shipping lines are treating us in a way we don’t understand. Before they won’t rate for you until a ship leaves but this is not so now. But today this has changed. Their systems have been reconfigured that you pay ahead.

“The Nigerian Shippers Council that is supposed to be the police of the shipping lines is not active. It rarely takes actions when we cry over these issues. The government should put the right people to head the Council,’’ he said.

The Executive Director of the United Nations Office on Drugs and Crime (UNODC), Ghada Fathi Wali, has commended Nigeria for the first-ever successful prosecution of piracy in Africa.

The UNODC boss lauded Nigeria’s leadership role and commitment to curbing maritime crimes.

According to a statement by the Head, Strategic Communication, Office of the National Security Adviser, Zakari Usman, Wali who gave the commendation in New York, noted the successful collaboration between Nigeria and UNODC, “as evidenced by the Global Maritime Crime Programme and the Strategic Vision for Africa launched in 2021, has encouraged the organisation to extend its partnership beyond national governments to regional organisations”.

The statement added: “The Office of the National Security Adviser is committed to ongoing national, regional and international collaboration to strengthen legal, administrative and operational efforts in line with national maritime security objectives.

“All stakeholders are, therefore, encouraged to continue to set a high standards in the prevention and prosecution of maritime crimes”.

It added: “Indeed, one of the gaps identified by the Federal Government of Nigeria in the fight against maritime crimes was the weak legal and institutional framework for prosecuting offenders. In response, President Muhammadu Buhari, on the 24th of June 2019, assented to the Suppression of Piracy and other Maritime Offences (POMO) Bill.

“By the POMO Act, Nigeria became the first country in the West and Central African sub-regions to promulgate a stand-alone law against piracy.

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“The Act also domesticates, as required, the United Nations Convention on the Law of the Sea (UNCLOS), 1982 and the Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (SUA), 1988.

“In July 2021, under the POMO Act, the Federal Government secured the successful prosecution of 10 pirates for the first time anywhere in Africa. But asides from creating a legal and institutional framework for prosecuting maritime crimes, the Federal Government has also prioritised the provision of maritime intelligence facilities.

“For instance, President Muhammadu Buhari commissioned a state-of-the-art Falcon Eye Maritime Intelligence Facility at the Naval Headquarters in Abuja last year. The set up and operationalisation of the project was facilitated by the Office of the National Security Adviser (ONSA) as part of efforts to boost Nigeria’s overall maritime security architecture, in accordance with the National Security Strategy (NSS, 2019), under which kidnapping of oil workers, sea robbery/piracy, incessant problems of crude oil theft, illegal bunkering, hostage-taking and maritime terrorism are classified as national security threats.

“The commendation by UNODC, therefore, places enormous responsibility on Nigeria to continue to lead innovative efforts towards the fight against maritime crimes in the Gulf of Guinea and across the continent, especially in the areas of intelligence sharing and coordinated legal strategy”.

The Nigerian Ports Authority (NPA) has stressed the need to enthrone a paperless and cost-effective operations by adopting digitalisation. In this report, OLUWAKEMI DAUDA writes on the measures by the management and board of the agency to create a fully-digital port.

Will the management and board of the Nigerian Ports Authority (NPA) be able to digitalise the port riddled with corruption? What measures have they put in place to reduce human contact and stem the  cycle of corruption within the economic system of the port?

How can the going stop many people from entering the seaports in this era of digitalisation?

These are the questions begging for answere from the Acting Managing Director of NPA, Mr. Mohammed Bello-Koko, other agencies, stakeholders, operators, security, government agencies and other port users.

Importers and stakeholders who spoke with The Nation said high levels of human intervention at every point of the port service value chain makes operations at the docks inefficient and susceptible to corruption. If inefficiency and corruption are to be mitigated at the ports by the NPA, “technology needs to be deployed as a tool of first choice,” said a maritime lawyer, Dr. Dipo Alaka.

He said NPA must put in place sufficient systemic technology to boost efficiency and counter corruption at the ports.

 

What Bello-Koko said

Speaking at the just-concluded 41st Ports Management Association of West and Central Africa (PMAWCA) Annual Council Meeting and the 16th Roundtable Conference of Managing Directors of PMAWCA, in Douala, Cameroon, Bello-Koko said deliberate measures and investments were being put in place for the creation of a fully-digital ecosystem across seaports by the year 2025.

The theme of the conference was “Digitalised Port as a model of Port Efficiency.”

In his presentation on NPA’s “Digitalisation Roadmap and Current Information and Communications Technology (ICT) Implementation Status”, Bello-Koko, who was represented by the Executive Director, Engineering and Technical Services, Prof. Idris Abubakar, told delegates from other African countries that a lot of work had gone into the smart port transformation agenda of the authority, and it was aimed at the enthronement of a paperless, time-saving and cost-efficient port operations in Nigeria.

 

What NPA has done

 

The NPA chief deployed a main computer system in 1975 to improve its payroll management, billing, statistical and accounting systems.  Available records also show that from 1992, the deployment of personal computers was done at each port to ease data management, but information sharing was difficult as there was no connectivity between the ports.

“In 2011, the authority reviewed its ICT strategy in line with its new role as a landlord, which followed the concession of port terminals in 2006. The primary focus of the new strategy is on enterprise computing and heavy dependence on network infrastructure, along with a centralised and shared database.

“The adoption by NPA of a phased ICT deployment is geared towards achieving a fully integrated port operating system; to foster relationship with all internal and external stakeholders, to streamline NPA’s internal business processes; to make use of high-end smart technologies; as well as to record, monitor and utilise data for better decision making.

“A five-year plan is now being implemented by the authority for the attainment of a fully-digitalised port system in Nigeria. So far, the authority has deployed a portfolio of systems and infrastructure towards the actualisation of its ICT objectives. These include Oracle Enterprise Business Suite for financial and human resources planning; Billing/Revenue and Invoice Management System (RIMS) to fast-track billing processing; Customer Portal/electronic Ship Entry Notice (eSEN)/Manifest Upload for shipping traffic management.

“Others include Hyperion Budgeting for management of annual budget; Command, Control, Communication and Intelligence System (3Ci) for maritime domain awareness and management of vessel calls; Truck Call Up and Gate Access Control for the control and schedule of trucks to the ports as well as managing truck traffic around the port corridor.

“At NPA, our goal is to leverage technology to close the gap between us and major international ports. A digitalised seaport helps in making better informed operational decisions, increased efficiency, improve collaboration among stakeholders, lower port costs and ultimately help to meet the ever increasing customer expectations in a timely manner,” Bello-Koko said.

 

What is digitalisation?

Digital technologies help to change a business model and provide new revenue and value-producing opportunities. For ports to cope with changes in the global economy, meet growing demand and an increase in throughput of cargo, the ports and their stakeholders will have to strike new agreements on collaboration and standardisation on big data, which, in turn, will make port computerisation easier to achieve.

Digitalisation, in the container handling context, is considered as a matter of the logistic chain, cloud and big data. While these are, undoubtedly, key aspects in digitalisation of container shipping, the system also transforms the processes and workers’roles within terminals, which has an impact on terminals’productivity.

Digitalisation of quay operations impacts positively on processes and roles and contributes to increased productivity.

 

Expectations

Digitalisation is expected to cut the cost of doing business, corruption and sanitise the port environment. Before now, the Nigerian Ports Authority (NPA), Nigerian Shippers’ Council (NSC), Technical Unit on Governance and Anti-corruption Reform (TUGAR), United Nations Development Programme (UNDP), Independent Corrupt Practices and other Related Offences Commission (ICPC), Bureau of Public Procurement (BPP) and the Maritime Anti-corruption Network (MACN) had assessed maritime operations to proffer solutions to the highly corrupt business environment.

This led to the introduction of Standard Operating Procedures (SOPS) and a Grievance Reporting Mechanism (GRM) to uphold the standards set by the SOPS and a web portal to administer the complaint collection and communication under the management and coordination of NSC as a one-stop shop to resolve grievances and to increase the levels of accountability of port officials in their adherence to SOPS.

 

Importers and a non-contact port

An importer, Mr. Kehinde Adegbite, said the port could be contactless with the use of computers.

Adegbite noted that a non-contact port was the solution to many problems in the system. He listed these as delays, which lead to demurrage, diversion of money, corruption and revenue leakages.

He kicked against a situation where many people would converge on the seaports to transact businesses that could be done from the comfort of their homes and offices. Human contact, in this era of global digitalisation, Adegbite said, is dangerous because it is non-efficient, causes delays and breeds corruption at the ports.

He said digitilisation would make our ports more competitive, noting that the country had competitors in West and Central Africa sub-regions.

 

Score cards

Investigation has shown that PTML has reached 92 per cent, and in Port Harcourt, Intels, BUA and Wact are having over 75 per cent digitalisation each.

“Where the ports are having problems is on reforms and claims processes, which is mostly manual, but we have some that scored 50 per cent.

“Also, the integration of systems because anybody can be online, but there is a need to integrate with the banks, for example, and even the Nigeria Customs Services, “ said a clearing agent, Mr Segun Ogunsanu

He said digitalisation would promote cleanliness in the port environment as well as tackle illegal trading.

“Most of the ports in the world are digitised. Nigeria cannot be an exception and that is why we have to support the current move by the board and management of NPA. We cannot have a multitude of people going into the ports every day; human contact in the ports is very dangerous. It is anti-efficiency and once there is human contact, there will be corruption and then delay.

“Some people don’t even have any business at the port, but you see them there.What are they doing? Even we the clearing agents have no reason to be at the port every time.

 

 Suggestions

“But the NPA needs to be working with shipping companies and terminal operators to ensure that they make the deadline it sets for them next year. Although, it may not be feasible to attain 90 per cent digitilisation in the next one year, if the 2025 is the target set by the NPA, 70 to 80 per cent must be achievable by 2022,  so that we can have our ports digitalised  as quickly as possible,” Ogunsanu said.

 

Problems

An expert, Mr. Kunle Ajayi, listed the problems in the reforms and claims processes, which he said, are mostly manual.

 

Views of the President of PMAWCA:

No wonder, the  President of PMAWCA and Director-General of Ghana Ports and Habours Authority, GPHA, Mr. Michael  Luguje, while delivering a welcome address, described the conference theme Digitalised Port as a model of Port Efficiency, “as very relevant because, more than ever, the COVID-19 pandemic has taught humanity that we live in a very fragile world. He added that within a space of time, the dynamics with regards to world trade and our ways of life could change dramatically.

“The impact of COVID-19 pandemic cannot be swept under the carpet so easily. Countries are now rebuilding again after many years of economic progress has been wiped off. As leaders in the maritime field entrusted with the responsibilities of facilitating trade and economic progress for our respective countries, we are here to have serious discussions on how we can continue to adjust in the face of this unwavering virus and how to plan and operate our ports to meet future challenges.

‘’The main aim is to explore diverse ways of using less to achieve more through the use of smart technologies,” he said.

The PMAWCA 41st Council Meeting was declared open by Cameroon’s Minister of Transport, Mr. Massena Ngalle Bibehe. The Roundtable Conference was chaired by the Director-General, Port of  Douala, Mr. Cyrus Ngo’o.

The event attracted heads of PMAWCA member ports and sister organisations which included International Association for Ports and Harbours IAPH, International Maritime Organisation IMO, Maritime Organisation for West and Central Africa MOWCA, Union of African Shippers Council and the Abuja MoU.

In 2022, maritime, like others, will be shaped by collaborations among international institutions, governments and stakeholders. The International Maritime Organisation (IMO) and the Commonwealth – a group of 54 independent nations – are set to galvanise stakeholders and drive the agenda for the industry. Is Nigeria going to allow itself to be left out? OLUWAKEMI DAUDA writes.

The maritime sector is central in the quest of the Federal Government to raise the necessary cash to fund the national budget. To this end, the sector must be given the needed support while its different stakeholders, both local and international, must collaborate to achieve seamless ports operation in the country.

 

Customs service

Stakeholders said the Nigeria Customs Service (NCS) policy on duty benchmarking on imported goods announced few months ago will remain one of the vibrant ways to check fraudulent declarations by scrupulous importers.

The Controller, Apapa Customs Command, Mr Yusuf Malanta, and the Deputy National Public Relations Officer of the Service, Mr Timi Bomodi, defended the duty benchmarking on imported goods.

According to them, the Service has in its system data range on prices of goods internationally as guide. They argued that the policy of benchmarking followed the cases of under-declaration, under-invoicing and concealment of goods by importers.

Bomodi said compliance has to do with honesty and transparency which according to him, have been lacking among the importers.

“The WCO nomenclature and the explanatory notes to the tariff are further guides which help agents and importers classify their goods correctly. In spite of this, the NCS has noticed both a huge knowledge deficit on the side of some agents/importers and an inclination towards misrepresenting facts with the obvious intention of evading the payment of appropriate customs duty,” he said.

Under the policy,  every 20ft or 40ft container pays a uniform duty rate  irrespective  of the value of the  imported goods, a development that has been described as alien to the industry.

Former President, National Association of  Government Approved Freight Forwarders (NAGAFF), Dr. Eugene Nweke, said it would trigger  inflation and harm the  economy.

Nweke and other stakeholders who spoke with The Nation said the CGC should  save Nigerians such hardship and halt its implementation  this new year.

 

 Translate plans to  results

Last year, manufacturers operating at the nation’s sea ports were full of lamentation over issues of access to foreign exchange (forex). They were  given assurance by President Muhammadu Buhari  at the tail end of last year of an improvement for those wishing to import raw materials and machines for production.

He  gave the assurance when he received the leadership of the Manufacturers Association of Nigeria (MAN) at the State House, Abuja.

It is hoped that Buhari’s strategic plan to boost manufacturing activities in the country will  be kept this year.

 

Maritime dangerous goods

Another momentous event that will shape this year is the enforcement of the  International Maritime Dangerous Goods (IMDG) Code, which was developed for the maritime transportation of dangerous goods in packaged form. The Code will come into force on June 1, this year . It was designed to enhance and harmonise the safe carriage of dangerous goods and to prevent pollution to the environment.

The IMDG Code, 2020 Edition, came into force on January 1, 2020, for two years. It had applied voluntarily since 2019. The validity of this Code was extended till May 31 this year, and stakeholders are waiting to see how it would  pave the way for effective enforcement of the successor Code this year.

 

Port system digitalisation

Why are too many people still going into the nation’s seaports in this era of digitalisation?

This is the puzzle the former Executive Secretary, Nigerian Shippers Council (NSC) Mr Hassan Bello, wants stakeholders, including security officers, government agencies and port users to solve this new year.

Bello said the port can be contactless with the use of computers.  He noted that a non-contact port is the solution to problems such as delays, which lead to demurrage, diversion of money, corruption and revenue leakages.

Bello decried a situation where many people would converge on the seaports to transact businesses that could be done from the comfort of their homes and offices. Human contact, in this era of global digitalisation, Bello said, is dangerous because it is inefficient and breeds corruption.

Stakeholders sought for collaboration to increase business value and enthrone transparency, speed up efficiency and safety in port activities and supply chains.

A maritime lawyer, Dr Dipo Alaska  said the country needed to embrace digital operations to get a clearer picture of the maritime landscape, noting that digitalisation holds great potential for making maritime transport chains more efficient, flexible and agile.

Collaboration among maritime agencies, according to him, would open up the ports to meet the challenges of globalisation, demographic change and urbanisation.

 

Intervention fund

A chieftain of the Association of Nigerian Licensed Customs Agents (ANLCA) Dr Kayode Farinto, said the sector needed intervention fund to boost maritime trade this year.

The government, he said, needed to come up with a better intervention fund like they have done in the aviation, manufacturing and agriculture sectors to take maritime out of the woods this year.

 

CVFF disbursement

Almost 16 years after the creation of the Cabotage Vessel Financing Fund (CVFF), the Federal Government approved its disbursement to indigenous shipping operators.

Minister of Transportation, Rotimi Amaechi disclosed the approval at a Stakeholders Appreciation Night organised by the Nigerian Shippers Council (NSC) in Lagos.

Amaechi said the fund has hit $200 million. The accumulated fund represents a two per cent contribution by indigenous ship owners on every contract done in the maritime domain.

The CVFF scheme was created in 2004. Since then, indigenous ship owners have been longing to benefit from the fund after several promises by the successive administrations.

Stakeholders urged Buhari to ensure  early dsibursement of the fund this year to boost the activities of indigenous ship owners and creat jobs.

 

CCCIC

The Command & Control, Communication and Intelligence Centre (CCCIC) of the NPA is seen as one of the giant strides taken by the authority to boost government revenue.

NPA must improve on the facility to boost efficiency at ports this year.

A  maritime analyst, Segun Adejare  said: “The facility is very good because it serves as surveillance for NPA’s activities and for security agencies.”

 

Single window policy

NPA,  Customs, NIMASA, NSC  need   to collaborate with the Nigeria Sovereign Investment Authority (NSIA) to develop the operational framework for establishing the National Single Window, Ports Community System and Scanning Services to address the chaotic clearance of cargoes from the port.

The collaboration must be used by the NPA this year in simplifying and harmonising formalities that impede trade.

 

Concession agreement review

One of the sad news that jolted many within and outside the country’s maritime industry last year was that the Apapa Port, Lagos State, was no longer West Africa’s leading and busiest container port.

The report said Lome Port in neighbouring Republic of Togo has taken over.

But the good news is that the NSC has insisted that the 80 per cent of cargoes destined for West and Central Africa are discharged at Nigeria’s seaports because the ports are efficient.

Few days ago, the Minister of Agriculture and Rural Development, Dr. Mohammed Abubakar, expressed worry over the renewed activities of rice smugglers, saying it will jeopardise the Federal Government’s gains of boosting local production of the essential commodity. In this report, OLUWAKEMI DAUDA looks at the factors aiding and abetting smuggling and what the government needs to do to end the menace.

INVESTIGATION has revealed how retired Customs officers and other security agents and border communities are aiding smuggling of rice, poultry products, and other banned items, thus, worsening the unemployment rate, health and economic crises across the country.

When The Nation visited the Seme and Idi-Iroko borders four days ago, security agents were seen turning a blind eye to rice and poultry products smugglers, after collecting bribes from them through their camp boys (Kelebe).

Like other stakeholders, the Minister of Agriculture and Rural Development, Dr. Mohammed Abubakar, a few days ago, expressed worry over renewed onslaught of rice smugglers, saying it would jeopardise the Federal Government’s gains from boosting local production of rice.

Abubakar stated this during a meeting of the Steering Committee of National Task Force on the Illegal Importation of Rice through the Land Borders at the ministry’s headquarters in Abuja.

He said the meeting was called to deliberate on the increased rice smuggling and to fashion strategise to end the scourge.

Investigation by The Nation showed that smugglers move freely on Idi-Iroko, Atan and Sango-Ota Road, after bribing security agents who look the other way while they move their goods to the market.

There are more than 12 checkpoints on the road, yet this reporter saw many vehicles ferrying rice and other banned goods to markets with impunity.

What the people say

A secondary school teacher and a resident of Ojuore in Sango-Ota, Ogun State, Mrs. Omolola Akinyelure, said: “Instead of blaming  smugglers, security operatives at the various checkpoints on the road leading to Sango Market should be blamed. We have over 12 checkpoints on this road leading to the border, yet,  smugglers still find their way to this place, forcing students, teachers, commuters and other drivers to run for their lives because they always move in convoy and ready to injure or kill anybody blocking their way.”

Also, a commercial motorcyclist, who identified himself as Seun Adesanya, said: “Customs officers and other security agents operating along this road cannot claim not to know those behind rice and poultry products smuggling in this area.  The majority of them are former security agents. The smugglers always mention the names of their principals at every checkpoint as they are moving to the market. Once they mention any of the names of their sponsors, the security agents will turn a blind eye  and allow them to go freely. But when the traffic is huge, the smugglers make a detour to illegal routes and find their way to every market in the state and Lagos. The smugglers even have stores around this area and Customs officers cannot tell us that they don’t know the places. We all see them coming there to pick their goods with uniformed men following them.

Where they keep smuggled rice

Investigation has shown that there are about three storage facilities where smugglers keep their goods around Osi Junction after Koro-Otun in Ota, coming from Ojuore and going to Joju/AIT Road in Lagos State.

When our correspondent visited during the week, he found that Osi Junction was a haven for smugglers and area boys and some security agents who go there to smoke, collect their daily ‘contributions’ and drink Ogogoro with the smugglers.

Adesanya also said security agents and the Federal Government should be blamed for rice and poultry products smuggling because of the high prices of the two staple foods in the market

He said the country’s  bid to be self-sufficient in rice and poultry production was being threatened by smugglers, urging the government to address the problem of high prices of food to stem smuggling.

Although investigation along Agbara, Badagry and Seme border revealed that smugglers were finding it difficult to penetrate the area because of the heavy presence of security agents, but at Gbaji, Badagry, Owode-Apa, Owode Idi Iroko, Alapoti, Atan and Sango Ota smugglers are using bush paths to ferry large quantities of rice and poultry products into the markets in broad day light and the wee hours of the morning.

Some of the other towns and villages visited  between 5pm and 9pm in the last four days which the smugglers are using as base are: Isaga, Ibara, Joga Orile, Iboro, Imasahi, Ilaro, Ilobi, Igbogila, Sawon, Aiyetoro, Igan Okoto, Igon Alade, iguwa, Ipokia, Okelewo and Alamala, among others. The Iboro, Alamala Road goes straight to Lafenwa in Abeokuta, capital of Ogun State where many rice merchants are based.

A bag of smuggled 50kg foreign parboiled rice sells for between N16,000 and N17,000 in most of the towns and villages, while same sells for between N22,000 and N22,500 at Lafenwa.  In Lagos and other parts of Ogun State, the commodity sells for as much as N30,000.

Smugglers with the support of some Customs officers and security agents, through the Idi Iroko border, sources at Lafenwa Market said, are cashing in on the ban and high prices of rice and chicken, which are mostly consumed in many homes, to bring them in as the end of the year is fast approaching.

Rice and frozen poultry products’ business, investigation revealed, is booming because security agents are not doing their job.

A chicken farmer in Ogun State, Hammed Adegbesan, said about 1.2 million metric tonnes of poultry products are smuggled into the country yearly from Brazil and Asia.

“Although the Federal Government banned the importation of rice and poultry products, the policy has not been effective and made no real impact on actual foreign imports because the Republic of Benin and other neighbouring countries have not stopped the importation of brown parboiled rice which they don’t consume. Over 90 per cent of rice and frozen chicken they imported ends up in Nigeria.

“Those that are selling rice and the chicken to our people here are uniform people. But what we don’t know is whether they are serving or retired officers.  But they always put on their face cap to show that they are security officials. Based on the economic downturn, many Nigerians prefer buying the imported frozen poultry products than the locally-produced rice and chicken,’’ he said.

According to Global Poultry Site, Nigeria produced about 340,000 metric tonnes of poultry products in 2019, and it is expected to grow by five per cent yearly.

“The National Agency for Food and Drug Administration and Control (NAFDAC) has been warning Nigerians against the consumption of imported poultry products, threatening to take action against smugglers, or dealers found with the banned products. But the agency is yet to prosecute any trader found with the banned items.”

Investigation revealed that smuggled poultry products are ferried on motor cycles, passenger buses and specially-refurbished vehicles heading for Lagos, Abeokuta, Ijebu-Ode and Sango.

It was further gathered that, every Tuesday, Thursday and Friday, traders flock to Cotonou and other neighbouring countries to buy rice and frozen poultry products and smuggle them in through the Gbaji and Ere river.

Customs needs to do a lot to track down poultry products and rice smugglers and stop their illicit business. It needs to embark on effective border patrol as the smugglers use various vehicles to bring the items to Sango and Alaba markets day and night

Why rice is cheaper in Benin Republic

In Benin Republic, the total demand for white rice (white rice is consumed in Benin, against parboiled rice in Nigeria) is 400,000 mt. But findings have shown that the country, with a population of about 11 million, imports between one million and 1.2 m mt of rice yearly. Most of the parboiled rice imported by Benin eventually ends up in Nigeria through smuggling.

Since the ban by the Federal Government, Cameroon and Benin Republics had lowered tariff payable on rice to zero and five per cent respectively to encourage importation and subsequent smuggling into the country.

Investigation also show that Thailand and India, where most of the smuggled rice were sourced, also subsidise rice production and processing which federal and state governments are yet to emulate so that Nigerian rice can compete favourably, in terms of pricing, with the heavily-subsidised imported rice.

“Nigerians should remember that every time they eat imported rice, they are eating the jobs that would have been created for Nigerians.

“It is important for Nigerians to know that when they consume imported rice, they are creating jobs in India and Thailand and destroying jobs across our country,” said a university don, Dr. Maruf Animasahun

Health risks of imported rice:

“It should be noted that with the increasing rate of food sources contaminated with heavy metals and due to their bioaccumulation in body tissues and the subsequent health risks, it is recommended to use utter products.

“Intake of cadmium causes kidney damage and bone fractures. Long-term exposureto lead may cause memory deterioration, prolonged reaction times and reduced ability to learn.

“Paddy rice is accumulating heavy metals and is determined as a major exposure route for the dietary intake. Rice is one of the most-important widely-consumed grains in the world and is highly used in daily diets of world population, especially in Nigeria.

“According to statistical data of the Food and Agricultural Organisation of the United Nations (FAOSTAT, 2004), rice significantly provided 30 per cent of the dietary energy supply and 20 per cent of the dietary protein intake around the world.

“Another reason for rice contamination with heavy metals like lead is the distance of the plant location from the road as well as the traffic on tin and out of industrial hubs that are near rivers where industries discharge their waste. So, plants that grow in the vicinity of roads and industrial areas have higher concentration of heavy metals that are not good for human health,” Animasahun said

 

Unhealthy status of smuggled imported rice and poultry products:

Animadahun also alerted Nigerians on the unhealthy status of smuggled imported rice and poultry products being dumped in the country, cautioning against their consumption.

He said the agricultural revolution in general and the rice revolution, in particular, have taken millions of Nigerians out of poverty.

“If the majority of our prople  know where or how imported rice is made or how old it is they will stop consuming them. Most of the rice dumped on us are old and probably rejected. The citizens of those countries do not eat this rice. The citizens of Benin also do not eat it. But they bring it to us through the smugglers to destroy our economy and kill our people. Unhealthy foods like all this imported rice and frozen chicken are dangerous to health.”

What Abubakar said

“The ministry is very concerned about the increase in smuggling and has convened this meeting to discuss critical issues in order to strategise and come up with concrete measures to enable the committee carry out its duties effectively.

What Ali said

The Comptroller-General, Nigeria Custom Service, Col Hameed Ali (rtd), said the Nigerian Customs Service cannot fight the menace alone;  it needs other security agencies such as the Nigerian Civil Defense Corps to beef up the joint operations of the task force,” he said.

But the Chairman, Presidential Committee on Trade Malpractice, Dahiru Ado, commended the Ministry of Agriculture and Rural Development, the Nigerian Customs Service, and other partners in their sustained efforts in tackling the menace of illegal rice importation through the land borders into the country.

What Ali needs to do

Speaking with The Nation, a member of Rice Farmers Association of Nigeria in Badagry, Mr. Gbolahan Adejare, said Ali needs to lead senior members of the Service, a detachment of senior police officers and the Federal Road Safety Corps (FRSC) from Abuja on a private and unannounced visit to Ere River in Owode Apa area of Ogun State, to arrest some smugglers and security agents assisting them.

Such a visit, it is believed, would enable him to see how security personnel inadvertently aid and abet smuggling.

Purpose-built vehicles

Ali must give instruction to his officers on the road to arrest and detain drivers and purpose-built vehicles smugglers use in moving rice and other banned goods to Lagos and Ogun markets. If the vehicles are not impounded, rice smuggling will continue.

Wake-up call to FRSC, Police

It was also gathered that smuggling keeps flourishing because some officers of Customs, Police, Federal Road Safety Corps (FRSC) and others turn a blind eye when they see the specialised vehicles smuggliers use. Police and the FRSC officials, stakeholders said, have a huge role to play in ending smuggling to boost the economy.

Motorists, specifically, accused the Police and the FRSC officials of not doing their job diligently, despite their presence on the two major roads leading to the borders.

A resident of Ajara, Mr Gboyega Emmanuel, said most of the vehicles used do not have number plates, particulars or head lamps.

 

In this report, OLUWAKEMI DAUDA looks at the allegation by the National Association of Government-Approved Freight Forwarders (NAGAFF) that the bonded terminals approved by the Nigerian Customs Service (NCS) are ill-equipped in contradiction of the Customs Excise and Management Act (CEMA).

Worried by their performance, the National Association of Government Approved Freight Forwarders (NAGAFF) has criticised bonded terminals, saying they have failed to carry out their responsibilities.

For instance, the NAGAFF’s 10 per cent Compliance Team complained that members of the Association of Bonded Terminal Operators of Nigeria (ABTON) imposed demurrage, storage and transfer charges, among other illegal fees, on importers and freight forwarders, even though they lacked the capacity to deliver quality and efficient services.

NAGAFF Coordinator of the Compliance Team, Alhaji Ibrahim Tanko, alleged that that when it rains, operators of bonded terminals suspend examination of cargoes, leading to an increase in demurrage charged owners of the cargoes.

Also, NAGAFF alleged that the bonded terminals, which were approved by the Nigerian Customs Service (NCS), were ill-equipped for operation in contradiction of the Customs Excise and Management Act (CEMA).

The allegation was contained in a letter dated July 28, 2021, which the association sent to the Comptroller-General of Customs, Hameed Ali (rtd). It stated that some approved terminals operated without relevant cargo handling equipment and that their environment was not conducive.

 

Bonded terminal

A bonded terminal is a warehouse or a storage area approved by the Customs for a temporary storage of imported goods. The goods are kept until the Customs duty is paid or are cleared by the owner.

Businessmen who invested in the ports logistic value chain with the establishment of bonded terminals have expressed anger about alleged neglect of the facilities by the Nigerian Ports Authority (NPA) and the NCS, among others.

 

Why bonded terminals were created

The creation of bonded terminals was aimed at decongesting the ports. Between 1980 and 1982, the Federal Government responded to the challenges at the ports then by establishing the two container depots in Kano and Kaduna with a combined capacity of 8000 Teu. These terminals were policed by officials of the NSC and those of other related government agencies.They were conceived as a viable channel of supplying the much-needed industrial raw materials, spares and agricultural materials for the development of hinterland states, local governments as well as assist the organised private sector in manufacturing and agriculture.

 

How bonded terminals operate 

A bonded terminal must have a licence to handle laden containers on bond either by road or rail, and transfer of containers from seaport to its depots in Lagos and other places. The depot must have officers of NSC and security agencies, who ensure clearing of cargo to their final destination through less cumbersome documentation.

The standard practice is that on arrival, containers clearance must not exceed 24 hours, far ahead of the unattainable 48-hour clearance in the seaports. To ensure safe transit, the NSC officers ensure that bonded containers arrive in the depots on time and with seals intact. The terminals, therefore, provide quality services to meet customers ‘just-in-time’ needs. The systems guarantee quick service delivery.

But a senior official of one of the bonded terminals in Lagos, who does not want to be named, said the NPA should be blamed for the collapse of the Lagos ports’ roads and the gridlock it engendered, for failing to implement a working template on the bonded terminals to achieve a seamless cargo distribution and evacuation system.

He accused NPA of failing to honour the agreement reached between the government in 2003 and the bonded terminal investors who were brought onboard to support the evacuation of containers from seaport terminals to bonded terminals, to create a seamless logistics chain.

 

Govt’s investment agreements

The source said though some bonded terminal owners were asked to provide bonds by some of the terminal operators, the later reneged after N100 million bonds were provided.

“Then APMT asked some of us to provide bonds, I provided N100 million bond, but nothing came out of it. The government is a dream killer. They lack honour, ethics and respect for investment agreements.This is very bad. The bank pulled us here and there for the loans we got. Tell me, can anybody take our government serious anymore having deceived and left us struggling for breathe?” he asked.

With the high volumes of import and the unnecessary bottlenecks in the clearing process, a lot of goods have ended up staying longer than necessary at the ports, leading to a serious congestion of the available space in the ports, thereby causing delays in the discharge of cargo by vessels.

The delays, which also affected the vessels turnaround time, led to the creation of bonded terminals that have full complements of NCS and other security agencies.

 

Complaints

He noted: “If I want to examine my containers, it takes me days. They don’t have a good floor to drop containers during the rainy season. We cannot examine in the rain because the goods will be soaked in water and demurrage will accrue.”

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Blames

Tanko condemned the issuing of licences by NCS to the operators, who could not meet international standards viz a viz the CEMA Act.

He urged Customs to revoke the licences of bonded terminals that fail to meet the standards.

 

ABTON reacts

However, ABTON said the allegations were baseless as over 40 bonded terminals in Lagos alone operate in accordance with the standards contained in their operation licences issued to them by the Customs.

According to ABTON’s General Secretary, Alhaji Haruna Omolajomo, there were guidelines for operating a bonded terminal, adding that Customs inspects the terminals regularly even after they are approved, while the operators renew their licences yearly.

He explained that the charges the freight forwarders complained against were in the agreements.

 

Facts

The ABATON scribe said bonded terminals with sufficient equipment were not patronised by freight forwarders and importers, noting that they preferred to take their containers to those with fewer facilities and end up complaining of not getting adequate service.

Omolajomo explained that bonded terminals do not bill customs agents and freight forwarders illegally, saying that 70 percent of the charges at the bonded terminals were infused by the shipping firms and terminal operators.

He said the operators had invested trillions of naira into the business,  saying that shutting the business would keep many out of jobs and their equipment wasted.

 

Deficiency

Notwithstanding, the ABTON scribe admitted that there were a few bad eggs in the industry. He suggested the erring operators should be punished rather than condemning all the operators.

He stressed:  “There is no sane society that expects everything to run 100 per cent. There would still be black sheep that will default. You cannot push for all bonded terminals to be thrown out of business because of one or two operators that erred in their operations. This is not fair as many people would be out of jobs for a crime they did not commit.

“Those people defaulting are not members of the bonded terminals association which is recognised nationwide. How can we account for them since the Federal Government, through Customs, licensed them? If they violate the law, the Customs sanctions them and brings them to book just as they have been doing to erring operators. The terminal operators and shipping companies reach an agreement with the bonded terminals for patronage.

“They give the bonded terminals conditions that if they must patronise them, they must help them to collect certain money and this money is infused into what the bonded terminals will collect from the shippers and freight forwarders. This is one of the challenges the bonded terminals are facing and this is very bad because it is painting us black.”

The plan by Acting Managing Director, Nigerian Ports Authority (NPA), Mr Mohammed Bello-Koko, to reposition the seaports for efficiency has received reactions. In this report, OLUWAKEMI DAUDA profiles stakeholders’ suggestions to make the ports better in Africa.

THE Acting Managing Director, Nigeria Ports Authority (NPA), Mr Mohammed Bello-Koko, has a plan: To put  the nation’s seaports in a position which will generate greater efficiency and, ultimately, make them the leading ports in Africa.

Speaking at the strategic retreat for the top management team of NPA, Bello-Koko reiterated the agency’s commitment to making the seaports competitive by promoting efficiency, safety and transparency.

But stakeholders, who spoke with The Nation after the event, said there are measures he should put in place to enable him achieve his goal.

 

Indicators for measuing port efficiency

Former President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, listed the following as indicators for measuring port efficiency (productivity):  berth occupancy, revenue per ton of cargo, capital equipment expenditure per ton of cargo, turnaround time of vessels, cargo dwell time, modern infrastructure and the number of people involved in facilitating quick cargo release from port.

“Port efficiency as promised by the Acting Managing Director of NPA, Mohammed Bello-Koko will be analysed by the stakeholders and port users based on the ability of the NPA to obtain the maximum output under a given amount of input or through the use of the minimum amount of inputs under a given amount of output. Efficiency gains, therefore, represent a movement to a situation closer to optimal.

“The efficiency of any port is part of a continuum that includes maritime, terminal, and hinterland operations. These dimensions are interrelated since inefficiencies in one dimension are likely to impact the others. For instance, problems associated with terminal operations are most likely to negatively impact maritime and hinterland operations with delays.Therefore, we are waiting to see the measures Bello-Koko is going to put in place in this direction.

“Because what happens at the port foreland will impact positively or negatively on the performance  he is talking about, mainly because of ship delays. The efficiency of the maritime access is a component of port performance, which includes average anchorage time, where ships are waiting for an available berthing slot. Long waiting times at anchorage can be the outcome of a lack of berthing slots able to accommodate specific ship classes (e.g., draft and cargo type) as well as terminal productivity issues.

“Depending on their site and configuration, ports can have complex in-port navigation requiring pilotage and tugs through access channels and turn basins.The average ship turnaround time or ship dwell time represents the time it takes to service the ship once it has docked. The value of enhancing such a system is clearly to the benefit of shipping companies, importers and clearing agents,” Shittu said.

 

Terminal operations

Terminal operations, according to Shittu and other stakeholders, represent the most common performance indicator to assess port efficiency, which the Acting MD would promote.

Container terminal operations, findings have shown, involves several key operations. Crane performance is a common bottleneck in terms of the average number of crane movements per hour. For maritime shipping firms, this is a crucial factor since it is related to the amount of time their ships will spend at the port. How containers are brought back and forth to the storage yard is also a component of port performance and often related to the number of movements per crane hour. Many container terminals use holsters or straddle carriers for such operations. Container storage yard operations involve stacking and related stacking density, an important variable determining terminal capacity. The average yard dwell time for inbound and outbound cargo is also a common indicator. When trucks enter the terminal to pick up or drop off cargo, space and equipment are required. This is often a critical bottleneck for trucking companies operating in our ports since it dictates the amount of time they will spend at the terminal, reflected in the average truck turnaround time.

 

Gate performance by NPA, security operatives

Gate performance concerns the efficiency of tasks related to document processing and security inspections by the NPA security personnel, Customs and other security operatives at the port.

For instance, a truck is admitted and cleared to pick up or drop cargo at the port by the NPA security officials. Gates used above their capacity are characterised by long truck lines that are on the port access roads waiting to be processed for their cargo.

An importer, Mr Leke Adetowubo, said, the average gate waiting time would be used by their members as part of performance indicators to measure the performance of NPA under Koko.

“For terminals having on-dock rail facilities like the APMY, the performance of the rail loading/unloading equipment will also be an important component of the terminal’s performance.

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“Congestion and bottlenecks on roads and street intersections in Apapa impair the port’s performance in many of the supply chain management strategies of the port’s customers. NPA has an oversight, either directly or indirectly, of the port efficiency in this area.

“It is true that NPA has concessioned terminal operations to private operators, port authorities tend to have direct oversight of maritime operations and several elements of hinterland operations, such as local roads directly connected to the port terminals, some of which on land owned by the port. Although cities are not directly involved in port operations and commonly have limited, if any, jurisdiction on port land, they commonly provide and maintain crucial road infrastructure connecting the port with its hinterland. They also bear many of the externalities of port operations, namely local congestion. Therefore, NPA and the state government are important stakeholders in the port performance continuum,” said Adetowubo.

 

Terminal operators’ efficiency

NPA, a maritime lawyer, Festus Anderson, said, must put in place measures to monitor terminal operators to show their performance, check their efficiency, compare present with past performance, and compare current with a target performance of the authority.

“The questions that the Acting Managing Director and terminal operator have to answer are what to measure, how to measure, and how to use this measurement. In general, the list of indicators that ports and terminal operators use to measure their performance includes (a) production measures, (b) productivity measures, (c) utilisation measures, and (d) services measures. Production measures bring the fundamental distinction between traffic measures where quantity is the temporal unit of reference and throughput measures where movements are the reference unit,” Anderson said.

 

The alarm over inefficiency

The National Co-ordinator of the 100 per cent compliance team of National Association of Government Approved Freight Forwarders (NAGAFF), Alhaji Tanko Ibrahim, has raised the alarm over the continued inefficiency and deteriorating services of bonded terminals.

Tanko lamented that the unmitigated shoddy services of these facilities remain a source of concerns to the NAGAFF team which has consistently complained of their laxities.

Tanko, also the Vice President Western zone of  NAGAFF, claimed that about 60 per cent of the bonded terminals in the country lacked the required capacity to deliver quality and efficient services as they do not have the requisite equipment and space.

“Most of the bonded terminal operators in Nigeria do not have the capacity to even own a terminal in the first place. The required capacity is that you need to get a minimum of four forklifts of different sizes, the one that can pick 20-foot containers, and 40-foot containers. You need a large expanse of land that can contain at least 20,000 containers. Most of the bonded terminals don’t have these,” he said.

 

Why ports were concessioned

The Federal Government concessioned the ports to address inefficiency, corruption, mismanagement, and huge debts

 

Need to review concession agreement

However, to enhance the ease of doing business in ports in line with international best practices, NPA should publish a review copy of  port concession agreement with the terminal operators to measure their performance based on the new agreement.

 

Functions of a port

The most common mode of transport in international trade is sea transport. This is based on the huge number of cargoes that are transported on sea. Findings have shown that there are more than 2,000 seaports around the world, from the ones with a single berth location handling a few hundred tonnes of cargo yearly to huge facilities handling about 300 million tonnes of cargo yearly.

When a port becomes more efficient, its ability to attract cargo will improve.This will increase the revenue and better utilisation of the port’s facility and infrastructure.

 

Benefits of efficient port

One benefit to the government is increased revenue. When the port is more efficient, it will attract more cargo. The increased revenue realised from the duties and fees payable on the cargoes and ships will be a plus for the government.

Since the port is not an isolated industry but a community of actors, a better positioned port will create other service firms within the industry; this will attract increased private sector participation.

The people will be able to see a better price on goods since the present price of most import or import related goods are influenced by the cost incurred during the inward movement of cargo.

The cost of doing business will be reduced since the costing method would change allowing for a more customer and service costing policy. Costs will also reduce for the freight forwarders and inland transport operators like trucking companies and they will be able to give a better price to customers.

Delays experienced by cargo owners and other port users will be minimised. This will increase the time it takes for them to get their goods to the market place.

The quality of service perception will change and the port users will enjoy a more user friendly port and the advantages associated with it like ease in conducting business with the port. Predictability of port processes will allow port users to be able to optimise their processes like transportation.

Cost will also reduce for importers who have to go through neighbouring countries’ ports due to the inefficiency experienced at ports in the country.

 

What Bello-Koko promised

Bello-Koko said, as part of efforts to reposition the agency, the management has outlined factors that would enhance such prospects as well as capacity to garner greater market share; which include infrastructural renewal and expansion, the introduction of barge operations and the automation of truck transit through the electronic call up system.

Others include improvement in the sources of revenue and collection, plugging income leakages and reducing overhead costs, elimination of monopolistic conduct, formulation and implementation of policies aimed at incentive patronage of the Eastern Ports and encouraging competition.

The management, he added, is also keeping up with the dictates of Consolidated Revenue (Fund) and Fiscal Responsibility Act, compliance with international best practice, elimination of red tape, boosting workers’ morale and capacity building, among others.

He said further that these initiatives had laid the groundwork for some milestones with great potential for more as some of the reforms continue to transform into success evidenced by improved cargo throughput and revenue growth.

“Because excellence is a moving target, we cannot afford to rest on our laurels, we must redouble our commitment to continuous improvement as an organisational culture. Surpassing internal and external stakeholders’ expectations, which constitute a cardinal objective of this management, will require your unalloyed support as heads of directorates, divisions, locations, departments, port sections and units.”

Operators are worried over the delay in the disbursement of the Cabotage Vessels Financing Fund (CVFF). Hence, they are seeking the Federal Executive Council (FEC)’s intervention, OLUWAKEMI DAUDA reports.

When will the Cabotage Vessels Financing Fund (CVFF) be released to its beneficiaries? Which modalities will the Minister of Transport, Rotimi Amaechi, and his Finance counterpart, Zainab Ahmed, adopt for the release of the cash? How much is in the fund? Does the money belong to the Federal Government or ship owners? What measures has Amaechi put in place for a smooth disbursement of the fund?

These are the questions stakeholders want the Federal Executive Council (FEC) to answer at their next meeting.

The disagreement among some government officials is delaying the disbursement of the CVFF to beneficiaries, it was learnt

Despite the directive by President, Muhammadu Buhari and the Attorney-General of the Federation, Abubakar Malami, that the money should be released to indigenous ship owners, the fund, which is in the region of N136.5 billion, is yet to be disbursed because a senior government official, it was gathered, is opposed to the move, claiming that the money belonged to the Federal Government and could not be released to a private group.

 

Cabotage Services

True, the Federal Government enacted the Coastal and Inland Shipping (Cabotage) Act 2003 to limit foreign participation in domestic coastal trade, but foreign involvement is still high.

 

Objective of the Cabotage Act

Speaking with The Nation, a university don, Dr. Dipo Alaka, said: “The objective of the Cabotage Act is primarily to reserve commercial transportation of goods and services within coastal and inland waters for vessels flying the Nigerian flag and owned by Nigerians.”

 

The role of NIMASA

The Nigerian Maritime Administration and Safety Agency (NIMASA) is saddled with encouraging indigenous shipping operators to participate in coastal and inland trade.

 

What is CVFF?

The Cabotage Fund was established alongside the Nigerian Coastal and Inland Shipping (Cabotage) Act of 2003, to empower indigenous ship owners to  acquire vessels to take control of coastal and inland shipping business, otherwise known as Cabotage trade.

The CVFF is a complement of the  Coastal and Inland Shipping (Cabotage) Act 2003. The money, based on the Cabotage Law, is collected to assist indigenous ship owners with the acquisition of vessels to enable them to take full control of the captive market created for them by the cabotage law

“However, stakeholders that lobbied extensively for the enactment of the law and the lawmakers that passed it into law understood the need to have a financing fund that would empower Nigerian ship owners to acquire vessels that will make them operate maximally in the Cabotage trade, as part of efforts to end foreign domination of the nation’s shipping sector,” Alaka added.

Involvement if the Federal Ministry of Finance

A former President, Association of the Nigerian Licensed Customs Agent (ANLCA), Price Olayiwola Shittu, said the Federal Ministry of Finance was not involved in the collection and disbursement of the fund based on the provision of the Act that set up the Fund

He said: “It seems to us that the Ministry of Finance is claiming the ownership of the Fund based on the recent introduction of the Treasury Single Account (TSA) by this administration. The total amount collected by NIMASA is domiciled in the TSA and that is why there is this belief that the Ministry of Finance has a say on it.

“But that is not the case.The purpose of the collection of the Fund is well spelt out in the Act. The Act is the Act of the National Assembly which they must all rise to defend. It is not the duty of the Minister of Transportation to call for the judicious disbursement of the CVFF, it is the duty of the Federal Executive Council (FEC), the National Assembly, lawyers, indigenous ship owners, other Nigerians and the media.

“The Federal Government owes it as a duty to disburse the Cabotage Vessels Financing Fund (CVFF) to qualified Nigerian ship owners in line with the spirit of the Cabotage Law entered into by the government.

“Although many of the prospective beneficiaries, the disbursement guidelines and some necessary things ought to have been stated before announcing the disbursement. For instance, the actual figure lying in the Fund ought to have been made public by the Ministry of Transportation through NIMASA.

“As a matter of fact, how much has accrued to the Fund since inception has been a source of bickering and controversy over time. Various amounts had been bandied about. Some had said the fund was worth $100 billion, some $300 million and for some it is $700 million and $124 million.

“But NIMASA, the agency collecting the fund, is yet to come out with the total figure. Even as the authentic source, the agency’s inexact figure did not do anything to douse the speculation and the controversy. This is more so considering the many years the two per cent collection has been accumulating, plus the interests in the banks and the waiver fees foreign companies have been paying to continue to play their leading role in the country’s Cabotage trade.

“But 19 years after the enactment of the Cabotage Act, and over 15 years since the money started accumulating in the CVFF, it has remained untouched, with previous administrations and the present one refusing to let the Fund serve the purpose for which it was established. After several promises of disbursement, and sometimes putting the machinery in motion for the purpose, everything would become a mirage as, in most cases, those promises and disbursement efforts turned out to be mere political statements.”

The Minister of Transportation, Rotimi Amaechi, announced the move for the disbursement about two years ago, at the Nigerian Shippers Council Stakeholders Appreciation Night in 2019, held in Lagos.

Amaechi told ship owners and other stakeholders at the event that he had received presidential approval to disburse the CVFF. He said he would meet NIMASA and the Nigerian Shippers Council (NSC) the next day “to look at the dynamics of the Fund” while the ministry would begin meetings with indigenous ship owners in January 2020, to begin the disbursement process.

“In January, we will invite the operators for their proposals and to see the nature of their businesses and how they can get the aid. The President has given the approval and we will begin the process to disburse it by next year,” Amaechi declared.

“This, coming from the Minister of Transportation, Nigerians would have seen the disbursement of the CVFF as a fait accompli. But this is not the first time Nigerian ship owners had been treated to such empty promises. But if Amaechi is now insisting that fund must be disbursed to the ship owners, we must support him to boost our maritime trade and create employment for the youth,” Shittu said.

 

Sanctions

“Since NIMASA has the power to stipulate appropriate sanctions against Primary Lending Institutions (PLIs) who contravene the criteria set by this guideline. Applicants who make false representation and submit false documents to mislead NIMASA and the PLIs in their assessment of application shall in addition to other penalties be permanently barred from further access to the Fund and other maritime capacity development initiatives, I think now is the time for the Federal Executive Council to ensure that the Fund is disbursed by settling the unnecessary controversy surrounding the disbursement of the CVFF,” said a maritime lawyer, Mr. Muhammed Oluwaseyi

 

 Applicants/Beneficiaries

It was learnt that only shipping firms owned by Nigerians as defined by the Act could benefit from this Scheme.

A senior official of the Federal Ministry of Transportation ((FMoT), who craved anonymity, said: “To qualify for the CVFF loan or guarantee under the scheme, in addition to any other requirements set out by the Fund or NIMASA, an applicant shall:

“Prepare bankable feasibility reports which report shall be subject to independent verification by NIMASA and the Primary Lending Institution (PLIs). The functions of these institutions shall include liaising with NIMASA in determining the risk acceptable criteria for the utilisation of the CVFF funds or issuing of guarantees; participation in the financing and management of specific projects where necessary to further secure repayment of the loan or obligation; active involvement in on-lending, monitoring and entire loan management; and any other financial advisory or ancillary services as the Fund may determine.

“The PLIs shall carry 100 per cent risk exposure and NIMASA shall bear no credit risk. It shall be the responsibility of the PLIs to carry out detailed credit review and ensure that all identified risks are covered.

 

 Fee

“Applicants for loan or guarantee may be required to pay administration fees, investigation fees and other charges.

“Administration fees shall not exceed 0.5 percent of loan requested. Investigation fees shall not exceed one per cent of loan requested.

“The investigation fee shall cover the cost of the investigation of the project described in the application and the participants in the project, the appraisal of properties offered as security, where applicable.

“Where for any reason, the application is rejected or disapproved, 50 per cent of the investigation fee will be refunded.

“Other charges approved by NIMASA shall be determined in a manner that shall be reasonable and capable of promoting the objective of the Fund towards the development of local shipping capacity.

“Credit for processing or filling fees: A fee fixed by NIMASA shall be charged as processing fee for all applications. Upon approval of application, the filling fee shall be credited as payment towards the investigation fee,” the FMoT official said

 

Parties to the Fund

FMoT, NIMASA and the PLIs, particularly commercial banks, and the Fund applicants, the official said, are the primary parties to the Fund.

“The success of this scheme would depend largely on the Primary Lending Institutions. NIMASA shall set out and publish qualification criteria of commercial banks’ participation as a primary lending institution. This would ensure that only banks that have the capacity and commitment to the purpose of this Fund and the drive of NIMASA are included under the scheme.”

Without prejudice to NIMASA’s qualification criteria, it was gathered that, the following shall constitute the minimum qualifying criteria for a bank to be appointed a PLI under the CVFF scheme. The bank:

• must have an existing relationship with NIMASA; and
• must have shareholders’ fund in excess of N25 billion; and must have proof of substantial financial support in terms of credits extended to indigenous maritime operators.

 

 Sources of funding

 

Section 43 of the Act provides that the following shall be paid into the Fund: A surcharge of two per cent of the contract sum performed by any vessel engaged in Cabotage trade; a sum as shall, from time to time, be determined and approved by the National Assembly; money generated under the Act including tariffs, fines and fees for licences and waivers; and such further sums accruable by the Fund by way of interest paid on and the repayment of the principal sums of any Loan granted from the Fund.

The two per cent surcharge on contract sum shall be calculated and collected as specified in the Cabotage guidelines

The frame work for operation of the Fund shall include:

The FMoT is responsible for issuing and reviewing this CVFF guidelines subject to the provisions of the Act. It shall review the application and operation of the Fund by NIMASA yearly.

Few days ago, the Federal Government decided to quit the Maritime Organisation for West and Central Africa (MOWCA), after the country had spent more than $5million (about N2.5billion) on the regional body over the past 10 years.  In this report OLUWAKEMI DAUDA looks at some of the implications of this decision.

 

 

REGIONAL collaborations are vital to Africa’s growth. It is for this reason that they are formed. But when they do not meet their core objectives, member states may decide to opt out, in spite of the numerous advantages they may or may  have derived from it. This is the dilemma Nigeria has found itself at the Maritime Organisation for West and Central Africa (MOWCA) where it was an active member. After a 46-year romance, it quit the organisation during the week.

 

What  MOWCA stands for

 

It means the Maritime Organisation of West and Central Africa. It was established in May 1975 after a charter was signed in Abidjan, Cote d’Ivoire during the Ministerial Conference of West and Central African States on Maritime Transport (MINCONMAR).The name was, however, changed to MOWCA as part of reforms adopted by the Gen-eral Assembly of Ministers of Transport, at an extraordinary session of the organisation in Abidjan in August 1999. MOWCA has 25 member states in West and Central Africa, and was set up to serve as the body for handling regional maritime matters . The countries are: coastal states: Nigeria, Angola, The Gambia, Benin, Ghana, Sao Tome and Principe, Cameroon, Guinea, Senegal, Cape Verde, Guinea-Bissau, Sierra Leone, Republic of Congo, Equatorial Guinea, Togo, Democratic Republic of Congo, Liberia, Cote d’Ivoire, Mauritania, Gabon and Mozambique. Landlocked countries are Burkina Faso, Chad, Niger, Central African Republic, and Mali.

 

Amount spent by Nigeria

 

According to the Federal Ministry of Transportation, the country has spent more than $5million (about N2.5billion) on the regional body over the past 10 years.

 

Reason Nigeria quit MOWCA

 

According to the Director of Press, Federal Ministry of Transportation, Eric Ojiekwe, the Federal Government took the decision, following disregard for the rules on the eligibility of can­didates nominated by some member states for the position of the secretary-general of the organisa­tion

This, according to Ojiekwe, was contained in a statement by the delegation of the Federal Government at the Eighth Bureau of Ministers and 15th Gen­eral Assembly of MOWCA on last Thursday, in Kinshasa, Demo­cratic Republic of Congo.

The delegation said its position followed the presentation and acceptance by MOWCA delegates of over-aged candidates by Guinea and the Republic of Benin, in contravention of the rules of the regional body

The statement signed by Ojiekwe, reads in parts: “It is sad, and most depressing given Nigeria’s ardent and consistent support for MOWCA and its activities, that Nigeria as a nation must take a stand against the promotion of illegality, disrespect for the rule of law and contravention of the Rules regarding election of the secretary general of MOWCA.

“This position followed the presentation for election for the position of secretary-general of over-aged candi­dates by Guinea and the Republic of Benin, leading Nigeria to further observe.’’

 

The nominees

 

The statement continued: “Nigeria draws the attention of the General Assembly to the comment of MOWCA as presented by MOWCA secretariat in the annotated agenda circulated this week to the Committee of Experts meeting, which confirmed that Nigeria is the only country that met the age eligibility criteria requirement that candidates must not exceed 55 years.

“The candidate nominated by Nigeria was 55 years as at when nominations closed in 2020, while the candidates of Guinea were 60 years old and that of Benin was 62 years old,” the statement further stating, arguing that the Nigerian candidate was the only eligible candidate and should have been declared unopposed.

“The apparent willingness of some member states to consider for elections candidates who knowingly contravened the age criteria having exceeded the maximum age limit by more than five years in the case of Guinea and seven years by Benin, does not portend well for the reputation and operation of MOWCA as a rule-based organisation,” the statement said.

Ojiekwe further pointed out that no member state has supported MOWCA as much as Nigeria, as the records show the country has contributed over $5million in the past 10 years “with the organisation not employing one Nigerian’’.

“It should be noted that not a single citizen of Nigeria has ever been employed in MOWCA, and this is the first time that Nigeria has contested for the position of the Secretary-General of the organisation even though it is an uncontested fact that it is essentially the contributions of Nigeria that has sustained the organisation over the years.’’

  Who takes over at MOWCA?

 

The Federal Government, through the Federal Ministry of Transportation, has said MOWCA has no secretary-general for now.

Ojiekwe said the delegation to the election dismissed speculations that the country quit the body because it lost the plum office of Secretary-General.

“It has come to our notice that a section of the media (not The Nation) are reporting that Nigeria backed out of the Maritime Organisation of West and Central Africa, MOWCA, after losing election into the office of secretary-general of the organisation.

“For purpose of clarity, we wish to inform the public that the election did not hold after Nigeria excused herself from the 15th General Assembly of the body in Kinshasa, Democratic Republic of Congo where attempts were being made to accept candidates who did not meet the eligibility requirements.

“There is no substantive secretary-general of the organisation because of this impasse. Nigeria left the discussions preceding elections because as a country we will not be a party to circumvention of laid down rules and extant procedures governing the 46-year-old body,” the statement read.

 

The countries against Nigeria

 

Some countries, it was learnt, stood against the Nigerian candidate because in 2016, the Minister of Transportation, Mr Rotimi Amaechi, had pledged the ministry’s readiness to assist the MOWCA in establishing a Maritime Development Bank.

Amaechi, sources said, gave the assurance when the representative of the Secretary-General of MOWCA, Col. Mariko Mamadou, visited him in his office in Abuja.

Nigeria, findings have shown, was offered the right to provide the secretariat for the MOWCA Development Bank but some member states are not happy that the bank is yet to take off.

“It said the idea to establish a regional development bank for the organisation was conceived in 2000, adding that the minister requested MOWCA to furnish the ministry with the detailed status of the organisation and documentation of the projects of the organisation. MOWCA was further requested, as a matter of policy, to write a formal letter to the ministry spelling out Nigeria’s responsibility in the establishment of the Maritime Development Bank.

“As soon as I receive a memo from your Secretary-General, I will take it up from there,”  Amaechi was said to have promised Col Mamadou had congratulated the minister on his appointment and stated that he was in Nigeria to solicit the ministry’s support to achieve success in the establishment of the Maritime Development Bank.

“Mamadou further enumerated some of the organisation’s priority plans as the setting up of MOWCA’s Secretariat in Nigeria, appointment of a Project Coordinator, Financial Consultant/Business Consultant and Legal Consultant, who would be responsible to perfect legal documents for the smooth take-off of the organisation’s projects in Nigeria,” the senior official said.

 

 Govt nominates Adalikwu

 

In January, this year, the Federal Government nominated Dr. Paul Adalikwu as its candidate for MOWCA secretary-general. Adalikwu’s nomination, which came after approval by President Muhammadu Buhari, was the first time Nigeria is indicating interest in producing the head of the 45-year -old organisation.

Election into the office should have involved the participation of 25-member countries drawn from West and Central Africa.

Adalikwu, who is the Director, Maritime Safety and Security in the Federal Ministry of Transportation, parades a wealth of experience in administrative and maritime matters. He is also assisting in the establishment of a Regional Maritime Development Bank (RMDB) to be hosted by Nigeria.

The multilateral financial institution is expected to address the lingering challenges of funding for maritime-related commercial projects and deepen the region’s capacity to harness the benefits of the blue economy.

Adalikwu’s desk was responsible for overseeing the success of the Global Maritime Security Conference hosted by Nigeria in 2019.

An alumnus of the University of Calabar, Adalikwu holds a doctorate in Public Administration and Management from Hamlin’s University, Minnesota, United States.

He is vast in maritime, tourism and policy matters. He was in the nucleus of the 2019 Global Maritime Security.

The Norwegian Government, the United Kingdom Government, Nigeria’s government, the Government of the People’s Republic of China, and the Government of Japan have contributed  to IMO’s work in the region.

 

Amaechi seeks Ghana’s support

 

In May, Amaechi appealed to Ghana to support Nigeria’s bid for the MOWCA’s top seat.  He made the appeal when the Chief Executive Officer, Ghana Shippers Authority (GSA), Benonita Bismarck, who was visited him in Abuja. Amaechi intimated the delegation that Nigeria had been supporting the organisation. The minister, who also expressed Nigeria’s readiness to support the West African Maritime Bank, called on Ghana to key into the initiative.

Bismarck, said they were in Nigeria to strengthen collaboration between the two countries.

Bismarck stated that with ratification of the African Continental Free Trade Zone, there was the need for both nations to partner on developing non-trade barriers and trade facilitation.

She further spoke on the need to bring Sierra Leone, Gambia, and Liberia into MOWCA as the organisation currently had only two anglophone countries with 17 being francophone.

Bismarck expressed that hoped that with the minister’s support, these countries could be brought on board.

 

MOWCA’s relevance

 

Interestingly, MOWCA’s member countries in 1998 generated an estimated 247million tonnes of cargo, which represented 4.8 per cent of world cargo, 95 per cent of which was sea-borne.

MOWCA has also identified some problems at the sub-regional level on the cost-effectiveness of shipping services. These are: availability of shipping space, frequency of sailings, level of freight rates, competitiveness and survival of national/regional operators, efficiency of seaports, safety of cargo/ships, inland transportation networks, availability of coastal shipping services, efficiency of multi-modal transport systems and trade facilitation, protection of shippers interests, and the special case of landlocked countries.

 

Implications

 

Experts said the decision of Nigeria to quit the organisation would affect the establishment of the proposed regional maritime bank, divide the organisation more, make it to lack funds and ideas, affect the landlocked countries and reduce regional collaboration on maritime safety and security and if the ministers fail to resolve the problem, the organisation may die because of lack of funds and support.