Category: Maritime

Stakeholders project  that the volume of maritime trade will increase by four per cent between now and early next year, with optimism that the nation stands a chance to earn more revenue as it works to boost the economy, OLUWAKEMI DAUDA reports.

 

The volume of maritime trade is projected by the former President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, and other stakeholders to recover in the remaining half of this year and expand by over four per cent.

He said the nation stands a chance to earn more revenue when policies were properly implemented.

The maritime sector, Shittu said, would also be affected for the next six months based on the continued trade tensions between China and the United States as well as the overall weakening of the world economy.

Shittu based his argument on the figure by the United Nations Conference on Trade and Development (UNCTAD).

According to him, dry cargo will continue to account for over two-thirds of total maritime trade volumes in the projected months, while liquid bulk commodities, including crude oil, refined petroleum products, gas and chemicals, accounted for the balnace.

“In its Review of Maritime Transport 2020,’’ UNCTAD said the recovery is, however, fraught with uncertainties as many factors can “significantly influence the outlook’’.

According to the report, amid supply chain disruptions, demand contractions and global economic uncertainty caused by the COVID-19 pandemic, the global economy was severely affected by a twin supply and demand shock last year.

“These trends, it said, ‘’unfolded against the backdrop of an already weaker 2019 that saw international maritime trade lose momentum’’.

“Predicting the timing and scale of the recovery is also challenging, as many factors can significantly influence the outlook. Bearing this in mind, UNCTAD projections indicate that maritime trade will recover in the year and expand by 4.8 per cent.

“As the debate on the recovery continues to evolve, it is becoming clear that disruptions caused by the COVID-19 pandemic will have a lasting impact on shipping and trade.

“These disruptions may trigger deep shifts in the overall operating landscape, together with a heightened sustainability and resilience-building imperative.

“Potential shifts range from changes in globalisation patterns to alterations in supply-chain design, just-in-time production models, technology uptake and consumer spending habits.

“Depending on how these patterns unfold and interact, the implications for maritime transport can be transformational. Further, risk assessment and management, as well as resilience-building to future-proof supply chains and maritime transport, are likely to feature more prominently on policy and business agenda.

“While maritime transport could emerge as a catalyst supporting some of these trends, it will also need to brace itself for change and adapt and ensure that it is also well-prepared to enter the post-COVID-19 pandemic world,’’ it added.

 

War Risk Insurance Premium

The Federal Government has faulted the proposal by the United Kingdom(U.K.)-based Lloyds Shipping Services seeking to retain the War Risk Insurance Premium charged on each cargo coming into the country. But it is monitoring the sustainability of the Integrated Maritime security infrastructure also called the Deep Blue Project on which the country has invested over $195million.

The Federal Government, stakeholders said, must do everything possible to support the Nigerian Maritime Administration and Safety Agency (NIMASA) in its campaign against the war risk insurance premium on incoming cargo.

President  Muhammadu Buhari was in Lagos to  inaugurate the Deep Blue Project assets to eliminate piracy and other maritime crimes not only in the country, but also across the Gulf of Guinea. This is in addition to signing the Suppression of Piracy and Other Maritime Offences SPOMO 2019 Bill into law in June last year, which has led to the conviction of over 10 pirates.

Lloyds had in a recent report, while admitting that Nigeria has done well in her efforts at curbing piracy, however proposed that the premium should be retained to make room for proper assessment of the new security, especially in terms of its sustainability.

 

Govt committed to zero incidence of piracy

But the Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, who spoke with The Nation in reaction to the company’s proposal, said the Federal Government is committed to achieving zero incidence of piracy and other maritime crimes with the country’s Exclusive Economic Zone (EEZ)and beyond, insisting on the cancellation of the risk insurance that has added a cost to every incoming cargo.

 

Reduction in piracy attacks

Jamoh said the Federal Government, through NIMASA, apart from demonstrating her commitment and investing huge sums on the project, which came on stream in February this year, there had been a tremendous reduction in piracy attacks and other related maritime crimes and promised that more measures would be taken to end the cycle of criminalities on the nation’s territorial waters and in the Gulf of Guinea.

Available records show that a total of 10 piracy attacks were recorded within Nigeria’s EEZ in December, last year, while one attack was recorded in January, this year even as zero was recorded in February, this year when the new security assets were deployed. Other statistics show that only one attack was recorded in March while zero was recorded in April, this year, an indication that the new security project is delivering value since the deployment of the security assets in February, this year.

“Our target is to achieve zero attacks on Nigeria’s waters, we want to change this stigma, which has tagged Nigeria a war zone and so the world must rethink the war risk insurance premium since the circumstances that gave rise to that development has been addressed.

“Today, Lloyds is telling us that they recognise Nigeria’s efforts but will continue to charge the war risk premium until they see more commitment and progress but which more evidence does anyone need other than the official statistics not generated in Nigeria?” Jamoh asked.

Some of the assets inaugurated under the project, which fights piracy through land, air and sea include the Command, Control, Communication, Computer, and Intelligence Centre (C4i) for intelligence gathering and data collection for land operations; 16 armoured vehicles for coastal patrol; and about 600 specially trained troops for interdiction, known as Maritime Security Unit.

Others include two Special Mission Aircrafts for surveillance of the country’s EEZ, three Special Mission Helicopters for search and rescue; and four Unmanned Aerial Vehicles. The sea assets consist of two Special Mission Vessels and 17 Fast Interceptor Boats.

As we move to the end of the year, the Federal Government is expected to do more in terms of waterways security and infrastructural development.

Other stakeholders who spoke with The Nation in separate interviews, urged the Federal Government to focus  on the  sector. They said the sector has much to offer the economy in terms of jobs and wealth creation, reduction in inflation and debt profile and contribute to the nation’s Gross Domestic Product (GDP).

 

Over reliance on oil

Many stakeholders who spoke with this newspaper noted that the country has relied so much on the crude oil economy and urged the government to focus on other sources particularly the maritime trade and agricultural sector.

In rejuvenating the economy, a maritime analyst, Mr Semiu Olufowobi,  said maritime remains the key sector apart from oil and agriculture.

“Now is the time for the President Muhammadu Buhari administration to focus on other sources, particularly the maritime sector which covers both aquatic and marine spaces including oceans, seas, coasts, lakes, rivers and underground waters. Which also encompasses a range of productive sectors; Fisheries, Aquaculture, Tourism, Transport, Ship building, energy, bio-prospecting, under-water mining and related activities,  pointing towards economic prosperity, when adequately harnessed.

“Crude oil contributes to less than 10 per cent of our GDP but accounts for roughly 90 per cent of our foreign exchange earnings and half of the government revenue. The recession we are facing is based on the collapse in oil prices in the wake of the global pandemic which has drained government purse. The economic picture may remain cloudy till the end of next year if the government fails to pay adequate attention to maritime sector that has the potential to generate over N7trillion annually,” Olufowobi said.

 

 Infrastructural development

The former General Manager, Public Affairs of the Nigerian Ports Authority (NPA), Chief Michael Kayode Ajayi, said the government must  provide the infrastructural base in and out of the port system and see to human capital and manpower development.

Ajayi  decried the situation in Apapa, Lagos and urged the government to fix the Oshodi/Apapa Expressway to boost business at the port and generate more revenue to revitalise the economy.

He said the quick rehabilitation of the road from Tin Can Island Port to Mile 2 in Lagos would assist in salvaging the economy.

To move out of recession, out of the wood the Federal government, Ajayi said, needs to protect the nation’s over $14billion maritime trade from criminals operating on its territorial waters.

This, he said, would be achieved by strengthening 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 nation’s 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 territorial waters.

“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 Federal Government to protect the nation’s over $14billion maritime trade,” Chief Ajayi said.

A safe, secure and efficient shipping industry, Ajayi  said, would assist in revitalising and diversifying the nation’s economy away from crude oil exploration to a  vibrant maritime trade.

 

Assist local shipowners

The Federal Government, through the Federal Ministry of Transportation and NIMASA, a maritime lawyer, Mr Samson Felix said, must in the second half of the year remove everything that is causing delays in the disbursement of the Cabotage Vessel Financing Funds (CVFF), to assist the local shipowners to grow and contribute to the economy.

“Maritime trade alone can service the nation’s annual budget, if properly harnessed. The country is lagging behind in the comity of nations when it comes to ship ownership and shipping business. For instance, the world blue economy is worth over $24 trillion. Undoubtedly, blue economy offers great opportunities for foreign exchange earnings. It is also unfortunate that the country is yet to take full advantage and harnessed enormous potential in the sector

Also, the Chairman, Nigerian Ports Consultative Council (NPCC), Otunba Kunle Folarin, urged President Muhammadu Buhari to assist the industry to arrest its declining fortune and contribute meaningfully to the economy ” the way it does in other clime”.

Folarin lamented that the sector had not achieved its goals since the beginning of the year and urged the government to formulate and implement policies and programmes that have the capacity to boost the economy in the second half of the year.

The former member of Presidential Taskforce on the Reform of Nigeria Customs Service; Presidential Committee on Destination Inspection and Ministerial Committee on Fiscal Policy and Import Clearance Procedure, Mr Lucky Amewiro, agreed maritime has the potential to boost the  economy.

 

The Nigerian Maritime Administration and Safety Agency (NIMASA) has shown its commitment to ensuring the welfare of seafarers. In this report, OLUWAKEMI DAUDA looks at how the agency has been able to develop indigenous capacity of seafarers and tackle their challenges.

 

 

Seafarers are vital to the maritime industry. This is because their training, which is long and rigorous, enables them to master navigation, cargo work and shipping. Also, any mistake made by them leads to loss of lives or property.

It is for these and more that the Nigerian Maritime Administration and Safety Agency (NIMASA)’s committment to their competency and dedication took the centre stage at a well-attended event organised last week by the agency as part of activities marking Seafarers’ Day.

But the President, Nigerian Shipowners Association (NISA), Mr. Aminu Umar, who chaired the session, stated why ship owners preferred to employ foreign crew and pay them higher wages than their Nigerian counterpart.

Umar argued that most Nigerian seafarers were complacent, indisciplined and not dedicated, compared to their foreign counterparts.

Recalling an incident in 2010 when 16 vessels were washed ashore by a storm in Lagos, Aminu, who is the managing director of Sea Transport Services Limited, said the affected vessels were manned 100 per cent by Nigerian crew.

“We don’t want you to have this entitlement mentality, whenever you are employed by a ship owner, you are selling yourself first. You need to market yourself, and how do you do this? It is by being dedicated and committed.

“In shipping, there is no room for mistakes, if you make a mistake, somebody would die, or you cause pollution. This means you are bankrupting the company,” he said.

Other stakeholders believe that advancements in technology and ships gradually moving towards auto piloting could be a threat to seafarers’ job.

But the spokesman for MARPRO, Capt Segun Akanbi, described the comments as sad. He argued that most of the ships that were washed ashore were derelict and had been abandoned because the owners failed to pay their crew. While it might affect the profession in some way, practitioners are optimistic that their years of experience could not be replaced by any machine.

Shipping is vital to economic development. It contributes over 90 per cent to the world’s economy. There are about 51,400 merchant ships worldwide, tranporting goods between places, thereby keeping economies running.

Whether it is oil from the Gulf or iPhones in containers being delivered from one part of the world to another, everything runs round the clock, with precision and diligence that promote businesses.

A former Managing Director, Nigerian Ports Authority (NPA) and Chairman, Mission to Seafarers (MTS),  Chief Adebayo Sarumi, said there was the need for increased welfare for seafarers, urging governments to ensure that interventions got to them.

He said intervention by governments would trickle down and positively impact the men and women who are the fulcrum for global development. “We indeed have much to celebrate. Ordinarily, any occasion to mark the sacrifice of our gallant men and women that ordinarily put their lives on the line for the greater good, is a noble gesture.

“A year ago, however, the world was thrown into confusion with the advent of a sudden and rapidly consuming pandemic. Numerous lives were affected, including seafarers and their families.

“Those of us fortunate enough to tell its tale must appreciate an occasion to relay experiences and reminiscence on account for all the departed, even as we embrace the gift of life.”

But who are those responsible for the robust activities at sea?

While the shipbrokers, the charterers and the owners take care of the financial aspects, seafarers are the ones executing it in real life aspects. The trade is only so good when the product is delivered safe and promptly to the receiver, and seafarers work  Sundays or public holidays, notwithstanding. Seafarers do not understand the concept, neither could they be allowed to do so because someone, somewhere, is in need of a product that must be delivered clean.

Also, nations are fuelled by gas and the shortage of oil supply, because of a stalled ship, can cause a very big crisis.

The sea and winds, they argued, do not follow the predicted patterns, adding that the human angle to shipping would always be invaluable.

However, as critical as seafarers are to the economy, the practitioners are often treated shabbily by ship owners who mostly employ them. There is a gradual shift, however, as concerned stakeholders make moves to ensure adequate welfare for seafarers.

To ensure sanity in the relationship between ship owners and seafarers, the Federal Government has threatened to sanction ship owners who default in the implementation of the contributory pension scheme for seafarers.

 

Steps taken by Jamoh

 

NIMASA has embarked on the periodic review of its training policies and guidelines to make them more relevant and functional.

The agency is also evaluating training interventions to know whether or not the objectives had been achieved to improve them, among others.

To improve seafarers’ welfare, the Federal Government has announced that there are policies in the pipeline to improve the quality of training and certification, as well as remuneration for seafarers.

NIMASA Director-General, Bashir Jamoh, made this known in Lagos.

He said: “Policies are in the pipeline to improve the quality of training and certificates we give to the seafarers. We are taking steps to standardise the curriculum of our training institutions in line with international standards. We are also working on increasing the remuneration of our seafarers. These policies would be announced as soon as we complete work on them.”

He said seafarers were among the most courageous people in the world, stressing that the theme of this year’s celebration was a “testament to the fact that the world cannot do without seafarers. Seafarers hold the key to humanity’s survival on a day-to-day basis. They held the key to our wellbeing during the first and second wave of COVID-19 period’’.

“The seafarers are unsung heroes, they are also our invisible heroes. We see their handwork every day and everywhere in agricultural machinery, the food we eat, and the unbroken run of the manufacturing base, despite the global lockdown,” he said.

He spoke on the challenges facing seafarers amid the coronavirus pandemic, including stringent work conditions in some countries, movement restrictions, lockdowns, crew change difficulties, fatigue and seasickness, and disruption of contracts.

He continued: “As a regulator, we have taken steps to alleviate the suffering of the seafarers. NIMASA was among the first government agencies to declare seafarers as being on essential duty, and we published this in a marine notice. We also issued COVID-19 guidelines to incoming ships towards ensuring that there is no importation of the virus by sea.

“NIMASA was the first in West Africa to issue a COVID-19 marine notice. We challenged ship-owners and employers of seafarers to take proactive measures to lessen the pains of seafarers. We also walked in lockstep with the IMO to tailor all our marine notices in the early period of COVID-19 towards supporting the extension of the validity of seafarers’ certificates, crew change, guidelines, procedure and their designation as essential workers.”

According to Jamoh, “it is said that a good sailor weathers the storm he cannot avoid; COVID-19 was a storm seafarers couldn’t avoid. As tried and tested seamen and women, our seafarers have continued to weather this storm for us. We celebrate you today. Nigeria thanks you, the world appreciates you, NIMASA as a regulator, will never abandon you. We will support you all the way.”

 

Marginalisation

 

Meanwhile, seafarers have decried what they described as marginalisation by foreign shipping lines and Nigeria LNG Limited in preference for their counterpart in other countries with less qualification.

This, they said, was despite the massive investment in seafarers’ development by the Federal Government championed by NIMASA.

According to them, the discrimination, formerly popular among foreign companies, has become evident in Nigeria with several indigenous companies, including the Nigeria LNG Limited (NLNG), a liquefied natural gas (LNG) producing company where the Federal Government is a shareholder.

A seafarer, Daniel Ikueyemi, said the poor feedback mechanism at NIMASA has deprived the agency of the true impact of the investment in seafarers’ development.

Ikueyemi lamented that the Certificates of Competence (CoC) of most seafarers trained under the Nigerian Seafarers Development Programme (NSDP) would soon expire, “yet many have no resources to renew it because they never had an opportunity of going on board vessels even for a day.”

“NLNG rejects seafarers with Nigerian CoCs. NLNG is a company in which the nation has shares. If the certificate doesn’t have value in our country and organisations like NLNG reject it, there is no need talking about acceptability of the certificate around the globe. There is no point wasting our time on that,” he said.

Ikueyemi proposed that NIMASA creates a seafarers’ desk to receive valuable information and experiences of seafarers, especially on practices onboard vessels.

According to him, this can be an avenue to enable the agency to resolve the numerous problems associated with seafaring, as “NIMASA would better capture seafarers’ experiences”.

His words: “NIMASA shouldn’t allow their resources to be wasted because that is what happens when the seafarers aren’t engaged. The duration of CoC is five years and it becomes useless if one doesn’t utilise it during that time frame to boost the economy.”

Poor policy execution, inconsistencies and lack of skilled manpower, among others, hindered the actualisation of the sector’s potential in the first half of the year, writes Oluwakemi Dauda.

 

The maritime sector moves substantial volume of the materials that are traded internationally – about 70 to 90 percent – and is essential to the global supply chains. So, whatever threatens its ability to function efficiently and smoothly will not only affect the economy, but will also disrupt markets in other sectors and affect the people substantially.

The Apapa  gridlock remains a problem to trade facilitation at the port in the first half of the year, compounded by many challenges.

Good pricing for profit

One of the main purposes of starting any business, including a maritime transport company, is to maximise benefits for the owners. However, importers said, this becomes harder to achieve in the last six months because of unreasonable freight rates that have led to some vicious competitiveness among shipping operators.

Importers said they were working hard to maximise profits and revenue. “And the only tool in the marketing mix that generates revenue is good pricing,” said, an importer, Mr Adegbola Adebiyi

For companies to succeed in increasing profits, he said, pricing should be given a top priority among other business development efforts. Furthermore, when formulating a pricing strategy for shipping, “it helps to have an expert team whose sole aim is to develop and supervise the process so as to achieve optimal pricing,” he said.

 

Onitsha port

Stakeholders said the policy of the Federal Government to ensure that the Onitsha River Port commences full operation in the first and second  quarters of this year is yet to be fulfilled.

The plan by the Federal Government to start operation at the port was made known by the Area Manager of National Inland Waterways Authority (NIWA), Onitsha, Anambra State, Mrs Queen Uba, during an interactive session with reporters in Onitsha.

She said NIWA had been making efforts toward the full operation of a port in the Southeast. She said the commencement of operation of Onitsha River Port was being put on hold due to the ongoing concessioning.

She said: “NIWA has put in place necessary things for effective operation of the port and we are just waiting for the completion of the concession. While we are waiting for the completion of the process, the management has entered into agreement with Connect Rail Services Limited to kick-start the lifting of goods from the port to other places in the country.”

Also, the Onistha River Port Manager, Mr. Baba Spencer said: “While the concession is ongoing, the Connect Rail Services Limited has been contracted to use the port stacking yard as a bonded terminal to kick-start the functionalities of the port operation on temporary basis until the concession is fully concluded.

“When the port commences full operation, it would reduce the cost of moving goods and human from Onitsha to other parts of the country. The full operation of the port would promote and increase commercial activities and attract more investors into the state.

“Onitsha River port was built under the administration of President Shehu Shagari in 1983 and since then, it has been lying fallow and completely underutilised up till the present moment despite the huge investment by the government.’’

 

Cyber security threat

The industry has always been targeted by cybercriminals and the danger is very much alive since the beginning of the year. Experts advise that as fleets recover from the losses sustained amid the global pandemic, both the indigenous foreign ship owners did well by not releasing their guard.

“The latest cyber-attacks on high-tech organisations like Google and a big software vendor in Germany, Software AG, has demonstrated the capabilities and sophistication of many cyber thugs and hackers.These events make it imperative for the maritime sector to be more vigilant towards cyber-attacks.

“The damaging effect a successful cyber-attack would have on crew safety and shipping operations is better imagined than felt. That’s why one of the first tasks the International Maritime Organisation (IMO) will undertook in January, this year was to introduce new safety rules.’’

 

NIMASA campaigns to end the war risk surcharge

Following the reduction in piracy incidents on the Nigerian waters and the Gulf of Guinea since February, when the Nigeria Maritime Administration and Safety Agency (NIMASA) deployed the Integrated National Security and Waterways Protection Infrastructure, popularly known as the Deep Blue Project, the Director-General (DG) , NIMASA, Dr Bashir Jamoh has started a campaign to end the war risk surcharge on Nigeria-bound cargoes.

The DG, who was unhappy over the persisting War Risk Insurance on Nigerian-bound cargoes, called on the international community to remove it.

 

Deployment of Deep Blue Project

Speaking during the kick-off of the deep blue project in Lagos by President Muhammadu Buhari, Jamoh said: “Since the deployment of the deep blue project assets in February, there had been a steady decline in piracy attacks in the Nigerian waters on a monthly basis.

“We, therefore, invite the international shipping community to rethink the issue of war risk insurance on cargo bound for our ports. Nigeria has demonstrated enough commitment towards tackling maritime insecurity to avert such premium burden,” Jamoh said.

According to a non-profit organisation Oceans Beyond Piracy’s 2020 reports, the total cost of additional war risk area premiums incurred by Nigeria-bound ships transiting the Gulf  of Guinea was $55.5 million in 2020 alone, and 35 per cent of ships transiting the area also carried additional kidnap and ransom insurance totalling $100.7 million.

Insecurity got so bad in the region before the deployment of the deep blue project that global insurance firm Beazley now offers “Gulf of Guinea Piracy Plus,” an insurance plan for maritime crew travelling through the area.

The plan provides compensation for illegal vessel seizures and crew kidnappings even in the absence of ransom demands. It tracks insured vessels on a 24-hour basis, but because the risks are so high, it limits claims to $25 million.

 

CVFF disbursement

Operators say NIMASA performed well during the period under review as the agency is showing the ability to carry out its core responsibilities of assisting indigenous ship owners through its plan to disburse the Cabotage fund to indigenous operators.

However, indigenous participation in the shipping sector, which is the core responsibility of the agency was at its lowest ebb during the period because of lack of fund from the government and the current economic crisis across the world.

 

Who controls Hydrographic Survey?

The question, which agency of the government will control  the Hydrographic Survey became an issue during the period under review.

The House of Representatives is considering a bill, which seeks to create a Hydrographic Survey under the Nigerian Navy with the mandate to be in charge of survey and charting of waterways.

But NIMASA has expressed its opposition to the Hydrographic Survey Bill. The agency opposed the bill over what it called “apparent militarisation” of the yet-to-be created agency.

The position of the agency was presented by the Permanent Secretary, Ministry of Transportation, Magdalene Ajayi, during the public hearing on the bill organised by the House Committee on Navy.

NIMASA adopted the position of the ministry.

The bill, sponsored by Yusuf Gagdi (APC, Plateau), who is also the Chairman of the Committee on Navy, seeks to create the agency, under the Nigerian Navy, with the mandate to be in charge of survey and charting of waterways.

The bill was introduced on July 23, 2020 and passed for second reading on December 8, 2020.

Mrs Ajayi said: “Hydrography is important to both military and civil authority, but the bill seeks to make hydrography the primary responsibility of the Navy. There seems to be an apparent militarisation of the proposed agency. Hydrography as a discipline is subject to both military and civil authorities worldwide. Hydrographic services are relevant to naval authority, to commercial shipping entities.

“The bill appears to situate the subject as of primary interest only to the Navy, leading to an error, in our view, in establishing a national agency as an arm to the Nigerian Navy,” she said.

 

Foreign ship owners domination

Foreign ships owners still dominated the nation’s waters – a development, which indigenous ship owners have persistently criticised.

Other stakeholders said the foreign dominance costs Nigeria huge revenue losses yearly.

 

Not much investment in automation

There was no much investment in digitalisation and automation in the seaport during the period.

But the global pandemic has shown how important  digitalisation and eliminating paper work are in the shipping industry.

Standards and interoperability in electronic documentation was poor. Digitilisation of the supply chain and real-time tracking and tracing were at the lowest ebb by the government agencies at port “and that is why our ports are  losing their competitive edge to the ports of neighbouring countries. Increased digitalisation, a maritime lawyer, Dr Dipo Alaka said, “ will also come with increased cybersecurity risks, another thing that the agencies will need to pay attention to in the next six months.”

 

Change of guards at Shippers’ Council

The retirement of Mr Hassan Bello as the Executive Secretary/Chief Executive Officer of the Nigerian Shippers’ Council (NSC) in the middle of the year was big news. Will the   new ES be able to wear the big shoes left by Bello? Bello was the first person to be appointed internally in almost 30 years of the agency.

 

Shippers want a new port order

The Shipper Association of Lagos State called for better collaboration among stakeholders to usher in a new port order for the country.

Its President, Jonathan Nichol,  said the new port order will improve the relationship between the terminal operator’s, shipping lines, shippers and government agencies and create an enabling shipping environment for all.

His words: “Our pursuit of a new port order is sacrosanct. There will be cordial relationship with the terminal operators and the shipping lines as it used to be. We believe we understand ourselves better nowadays.

“With the inauguration of the National Shippers Association of Nigeria recently, the public will witness a new dawn in the sector. The move coincides with appointment of a new Chief Executive Officer for the Nigerian Shippers Council who will pilot the affairs and to whom we will offer our unflinching support and cooperation,’’ he said.

Nichol said indiscriminate port charges would be tackled by stakeholders in the sector under the new port order.

“Shippers will engage and work harmoniously with all the government agencies, especially with NIMASA who have in recent times kicked against war risk insurance; the Nigerian Ports Authority (NPA) and Standards Organisation of Nigeria (SON),” he added.

 

Change at the ports

The removal of the Managing Director,  the Nigerian Ports Authority (NPA), Hadiza Bala-Usman in  May, by President Muhammadu Buhari came as a surprise to many stakeholders in the sector and Nigerias in general.

Her removal followed the acceptance of the recommendation of the Ministry of Transportation under Mr Rotimi Amaechi to set up an Administrative Panel of Inquiry to investigate the Management of the Nigerian Ports Authority (NPA) under Ms Bala-Usman.

The President also approved the then Executive Director Finance and Administration of NPA, Mr Mohammed Koko,  to take charge in acting capacity

The President of the National Association of Government Approved Freight Forwarders (NAGAFF), Increase Uche and other stakeholders, said Ms Usman’s removal was a setback in the campaign for women inclusion in government and the maritime industry in particular.

 

 

Stakeholders have expressed their grievances over the new exchange rate introduced by the Central Bank of Nigeria (CBN), Correspondent OLUWAKEMI DAUDA reports

WHATEVER the good intentions of the Central Bank of Nigeria (CBN) to increase the exchange rate, stakeholders in the maritime industry say it does not go well with them. They claimed that cargo clearance, which was N381 per dollar has jumped to N404.97 per dollar after the increase, leading to an apprehension among the importers, clearing agents and consumers of a possible inflation.

In 2019, the naira rose from N345 to N361 to a dollar and to N381 last year.

Since the new exchange rate regime, findings have shown that it has affected maritime charges.

The naira gets weaker when its exchange rate is lower relative to other currencies like the dollar, Chinese yuan and the European Union’s (EU) euro.

In an interview, Vice President, Association of Nigerian Licensed Customs Agents, Dr Kayode Farinto explained that the increase would lead to geometric rise in the cost of clearing vehicles and other items at the ports.

”A strengthening dollar and weak naira spell trouble for companies that import a lot of goods from countries. Since their imports are priced in dollars, those imports like cars, trucks and other equipment become more expensive for the local consumers and businesses that have to pay for the imported goods at the exchange rate at the port. The value of the profits they make on import sales falls, as well, when they convert their local profits back to dollars.

“But the dollar’s unfavourable exchange rate can also boost firms at home. That’s because when the dollar is strong, consumers may decide to buy indigenous used vehicles for fewer dollars, making the foreign used vehicles more costly in comparison.

“While this makes it appear that Nigerian car users benefit when the naira weakens, reality is not so simple. When the naira falls in value compared to dollar, the price of imported raw materials like steel go up in price and products like cars that are manufactured outside the country will cost more to buy,” he said.

The exchange rate is defined as “the rate at which one country’s currency may be converted into another. Typically, these rates fluctuate daily in response to the forces of supply and demand for different countries’ currencies. Nigeria, for instance, is an exporter of crude oil. If global demand for crude oil goes up at the international market, demand for the country’s currency, the naira, will also rise since companies will also need naira to buy but the oil. That would increase the naira’s value compared with other currencies where the crude oil is exported to. If demand for oil falls, the naira value will also take a hit.

Other important factors that affect exchange rates include: Inflation rate. Inflation is a major determinant of exchange rates. Countries with low inflation usually see the value of their currency rise compared to others. Those with higher inflation, meaning each unit of their currency buys fewer goods and services over time, usually see their exchange rates fall.

Interest rates are also closely tied to foreign exchange and inflation rates. If the rate a country pays when it borrows rises relative to other countries, more money seeking higher returns will flock to that country, demand for its currency will rise and the currency’s value will rise with it. Likewise, if interest rates fall, money will flee in search of higher returns and the exchange rate will drop.

Also, an importer, Mr Gboyega Adebari, expressed surprise at the sudden increase without recourse to the stakeholders.

He said this would further increase the price of goods at the market while adding to the already tensed economic atmosphere in the country.

“When we went to assess a job this morning, we were told that the exchange rate has been increased, though we have been expecting it, but we don’t expect that it would be so sudden. The implication of this on cargo clearance is that cost of clearance would increase by N24 difference.

“The cargoes that are already en route Nigeria would also be affected; the jobs that we wanted to clear were affected.

“When you go back to the importer and request for money, they will tell you there is no notification of increase from customs, so the freight forwarders are the ones that would bear the additional cost,” Adebari said.

 

Worries

 

Other importers and clearing agents said the new decision to add N23. 97 to the old rate would further lead to high price of consumer goods in the market and have negative impact on the fragile economy.

An importer, Mr Felix Alexander, explained that it would add to the cost of doing business at the seaports.

Also, the Managing Director of Sceptre Consult, Mr Jayeola Ogamode, said NCS was using the new rate to clear cargoes, noting that this was not the right time for the government to introduce any rate for importers.

He said further that some importers, especially the manufacturers, would pay more for the goods which were not cleared before the introduction of the new rate.

Ogamode, a cargo consolidator, stressed that the development would lead to inflation and weaken the purchasing power of the consumers.

He said: “If, at N381 per dollar, it was difficult for importers to clear their cargoes, I am worried about the new rate; Definitely the cost of doing business will go up and consumers  will bear the cost.”

 

Implication 

 

Also, a clearing agent, Lekan Ajisafe, explained that many imported goods would be abandoned at the port and that this would lead to congestion.

He noted that Customs had no control over the new rate, saying that its responsibility is to facilitate trade, generate revenue and implement government policies.

He said: “They have uploaded the new rate in their system. So, no importer could do declaration based on N381 because it has been changed to N404. 97 per dollar and naira is depreciating every day and our import volume increasing.”

He lamented that some importers, who borrowed from banks to import raw material would be affected, saying that while they would be paying back the loans, they would also be operating at a loss because of the N23.97 increase.

He stressed that some finished product were holed at the various warehouses in Lagos due to lack of patronage by consumers, who could not afford the high price.

A senior officer at the one of the terminals in Lagos, who craved anonymity, said: “In the next few months Nigerians will feel the negative effect of the CBN’s policy. This is a wrong signal to the genuine importers, manufacturers and investors operating in the country.

 

Complaint

 

Also, a Customs agent, Richard Eze, said there was no proper communication with stakeholders before the CBN increase import tariff, noting that the idea of CBN to, unilaterally, decide the direction of Nigeria’s economy was not good.

He said: “These economy policy makers are driving us out of business. They are chasing us out of this country. This is why importers divert cargoes to neighbouring countries where there is conducive business environment to operate. We will ship our cargoes to where they make business easy for people.

“At present, 80 per cent of Nigerian bound cargoes are being diverted to port of Cotonou, Togo and other West African ports because of the harsh operating environment. We are helping the neighbouring ports to boost the economies of their countries. What importers do is that, they will divert their cargo and cleared them and do transshipment by trucks through the road.”

He added that no responsible government would continue to hike import duty when there is tension in the country, noting that while people were struggling to survive, the government was making life difficult for them.

Also, Managing Director of Homeland Delivery Limited, Otunba Bamidele Abraham, explained that the increment would lead to high inflation, which would affect the purchasing power of ordinary Nigerians.

He said: “This week, I have already signed my Form-M and opened a transaction for the building materials I imported, but Customs said the previous transaction could not work because of the new import exchange.

Nevertheless, he urged the Federal Government to order CBN to reverse the import duty to N381, before it was increased to the new rate.

Meanwhile, the President, Africa Association of Professional Freight Forwarders of Nigeria (AAPFFN),Otunba Frank Ogunojemite, has described the increase as unfortunate because the CBN did not consult stakeholders before making it. He agreed that the new rate would bring an increment in the sales of goods..

The president said since the outbreak of COVID-19, there had been no basic increase on per capita income.

 

Suggestion

 

An importer, Mr Gboyega Adebari expressed surprise at the sudden increase without recourse to the stakeholders. “When we went to assess a job, we were told that the exchange rate had been increased. Though we have been expecting it, we don’t expect that it would be so sudden. The implication of this on cargo clearance is that cost of clearance would increase by N24 difference.

“The cargoes that were already en route Nigeria would be affected. The jobs that we want to clear were affected.

“When you go back to the importer and request for money, they will tell you there is no notification of increase from Customs. So, the freight forwarders would bear the additional cost,” Adebari said.

He added that importers and clearing agents need to be guided earlier whenever such increases were coming, so that they could advise their importers.

Also, a clearing agent, Mr Ibrahim Babatunde urged the CBN and the NSC to carry the stakeholders along, adding that the increase would lead to high cost of clearing goods and inflation.

He said there was the need by the CBN to review the import tariff because of the harsh operating environment, inflation and poor state of the economy.

The Management of the Nigerian Ports Authority (NPA) has met with Lagos State Governor, Mr Babajide Sanwo-Olu on how to end the intractable gridlock on the access roads leading to the nation’s two busiest ports in Apapa, and develop new strategies that will remove the pain from port users, residents and stakeholders by the security operatives operating at the ports. OLUWAKEMI DAUDA reports.

Two issues topped discussions when the management of Nigerian Ports Authority (NPA), led by its Acting Managing Director (MD), Mr. Muhammed Bello-Koko, few days ago, visited the Lagos State Governor, Mr Babajide Sanwo-Olu: how to end the intractable gridlock on the access roads leading to the nation’s two busiest ports in Apapa and boost their business.

The NPA Acting MD said there was the need to strengthen the enforcement of traffic laws along the Apapa and Tin Can Ports roads to boost businesses at the port.

Bello-Koko added that the NPA has been inundated with complaints of extortions from truckers, especially by security operatives, including the Military, the Police and NPA Security staff members, demanding bribes from drivers before accessing the ports. He described the practice as a disincentive to the smooth implementation of the electronic truck call-up system, popularly known as ETO, introduced by the agency.

 

 30 illegal toll-points

 

Bello-Koko said no less than 30 toll-points had allegedly sprung up around the Apapa and Tin Can Ports, where bribes were being collected before trucks were allowed into the port.

“One of the complaints of the truckers has to do with extortion by security operatives, the Army, the Police, the Nigerian Navy and even NPA Security staff. This is one of the areas we require the intervention of government, in this case the Lagos State Government because we have Police officers deployed from the state Command who are allegedly involved in this.

“We, at the NPA, have resolved to take the right punitive measures against any of our staff involved in this. We have moved some of them out of Port locations, and we will do further reviews, whoever is found involved, would be appropriately sanctioned.

“Because of the involvement of several security units, many checkpoints have been created, we believe there are over thirty checkpoints within the Apapa and Tin Can Port axis, and we believe that this is a major issue causing delays and a whole lot of problems. This was one of the concerns we raised at our meeting with His Excellency,” he said.

The NPA boss acknowledged that the state government had been an ally, especially in providing security operatives and monitoring of the call-up system. He however said called for more collaboration.

 

Effects of the gridlock

 

Experts say the gridlock is affecting the maritime sector. Apart from adding to the cost of doing business in the area, it has made the ports unattractive, hurting the trade facilitation programme of the Federal Government. It also ridicules the status of Lagos as Nigeria’s commercial nerve centre.

The deplorable state of access roads to the ports, they added, had exposed the complacency of successive administrations in resolving a major issue and wondered why the administration had not considered it expedient to fix the access roads to the ports six years after mounting the saddle.

They, therefore, called on President Muhammadu Buhari, the Federal Executive Council (FEC) and the governor to fix the roads within Apapa area of the state.

For instance, one of the residents of Apapa, Mr. Francis Adeyemo, a lawyer, bemoaned the deplorable state of the roads.

His words: “The situation on the two major roads leading to the Lagos ports is so bad that motorists accessing the ports and adjoining areas get trapped in the traffic congestion for over four and five  hours.

“Workers, residents, importers, port users and other stakeholders going to and from work or businesses at the ports and its environ lose vital main hours translating to huge financial losses.

“It is appalling that the Federal Government allowed the traffic crises on the roads leading to the Lagos ports to degenerate to this shameful stage. This has eroded the competitiveness of the two ports compared to the neighbouring countries.”

 

Access to the ports paralysed

 

When The Nation visited the ports last week access to the two Lagos ports was non-existent. Road and rail transit to and from the ports remained paralysed. This was despite the efforts of NPA to collaborate with the private sector to salvage the situation.

 

Manufacturers’woes

 

Clearing agents of some manufacturing firms said they were finding it tough at the Lagos ports to clear their consignments.

Some of them told The Nation that their goods had been trapped because of the traffic gridlock on the roads and that they suffer unnecessary delay in moving their goods out of the ports

“To move a container from Apapa to Ikeja, Agege and Iyana-Ipaja costs as much as N500,000 if not more because of the extortion and the gridlock on the road.This explains why goods from the seaports are some of the most expensive in the world because of the difficulties we face in clearing and moving them out,” Mr Kayode Ogunsanu said.

Ogunsanu said goods worth billions of naira belonging to some firms were trapped at the Tin Can Island and Apapa ports.The delay, he said, had serious implication for the firms’ production, if the government failed to address the issue.

“Already, the delay has led to the payment of huge demurrage to shipping companies and rent to terminal operators. It is also affecting their targets for the last quarter of the year. The firms’ agents are shuttling from office to office, in and outside the ports, to speed up clearing.

‘’Importers and clearing agents are also in the same boat because banks are on their neck to service their loans and that is why we  are urging the Federal Government to exercise its power under Section 152 of CEMA to waive demurrage and other charges on the affected goods.,” Ogunsanu added.

He lamented, for instance, that banks have been pursuing his principals for part payments, which was due last month and the demurrage is huge.

 

Sanwo-Olu assures

 

Sanwo-Olu assured that the government would work with the NPA in ensuring that that truck call-up system is successful. He called on port users to be alert to their responsibilities in ending the gridlock in Apapa.

He said there was the need for port service providers, security agencies and NPA to adhere to their Standard Operating Procedures (SOP) as well as invest in the needed infrastructure which would galvanise the ETO system to heightened performance.

He assured that the government would commence engagements with the stakeholders to ensure that they were factored into the ETO call-up system.

The National President, National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said the neighbouring ports have  positioned their ports as millennium ports, preferred, transshipment or load center, adding that most West African ports built their ports to accommodate Nigerian- bound cargo, knowing about the country’s poor infrastructure.

He cited Cotonou, Benin Republic, Lome, Togo, Accra, Ghana and Cameroun ports, urging the Federal Government to design a deep-sea/transshipment centre to accommodate large E-Class vessels/mega-ships of 8000-20000 TEUs, that are demanded regionally and globally, which is the only solution to the diversion of goods to neighbouring ports.

He said with international best practices, Nigeria must design the National Guarantee system to cover the payment of import duty taxes at the time of transit; Custom seal that ensures the physical integrity of the goods while in transit, making sure that the goods start and exit the transit in its original state; implement electronic tracking system enabling Customs to track and locate transit vehicles and guide intervention force including Customs staff; a document system to enable transit document issued at the start of transit journey to be accepted by transport and Custom authority along with transit.

 

Truck drivers’ concern

 

Truck owners across various unions and associations have also called on the Federal Government to restore the disbanded Presidential Task Team (PTT) on Apapa gridlock.

The distraught truck owners, who are reeling under the agony of resurgent traffic gridlock, lamented that the much-vaunted ETO platform has been compromised and riddled with corruption which has made it fail to address the vexed traffic logjam.

They, theerfore, appealed to the government to recall Kayode Opeifa-led task team to come to their rescue.

They affirmed that the system was effective within the first two weeks of operations before it collapsed, leading to the clamour for the return of the disbanded PTT.

The Coordinator, Committee of Maritime Truck Unions and Associations (COMTUA),Olaleye Thompson, bemoaned the harrowing experience of members of the union over the traffic in Apapa after the disbandment of PTT.

He added that as a result of the failure of the e-call-up system and lack of solution, the group has issued a 21-day ultimatum to the government to either solve the problems or the members would embark on industrial action.

Olaleye said members of the group from various unions and associations that make up the body have started approaching the leadership of the union to prevail on the federal government to bring back the Opeifa-led task team.

According to him, the team was already getting it right before it was asked to quit. He accused the government of not allowing the operators of ETO to learn from the team before it was disbanded.

 

Terminal operators

 

Also, the Managing Director of Port and Terminal Multi-Services Limited (PTML), Ascanio Russo, has called on the Federal Government to address insecurity and bad roads causing impediments to 24-hour port operations in the country.

Russo, who made the call in Lagos, said insecurity and deplorable port access roads were the major obstacles to operations at the ports.

According to him, PTML provides 24-hour service, but that insecurity had discouraged other agencies involved in cargo clearance to work at night, adding that freight forwarders could not work at night for the fears of being attacked by armed robbers or exposed to other threats around the ports.

However, he appealed to the government to address the insecurity and take action on the construction of the port access roads.

 

Reduction in haulage prices

 

Investigations have shown that the charge for taking cargoes from ports has dropped drastically from the N1million being collected last December to as low as N210,000 this month.

But when NPA launched ETO, there were criticisms and skepticisms about its workability.

Stakeholders, however, agreed that it had been effective in trucking haulage prices.

Other factors that have led to the decrease in truck haulage fee is the ongoing construction of the port access roads and the recent speed in the pace of construction.

A clearing agent, Mr Felix Mba, confirmed that that transportation of cargoes that crashed to N250,000 and N210,000 were going up.

He however lamented that due to down time of ETO Call up system portal, the fees were now  N300,000 and moving to N400,000.

“It came down to as low as N210,000 and I loaded so many trucks. But by yesterday, the ETO Call-Up system had not been running for three days and this caused the fee to rise again to N450,000.

“The reduction in price was necessitated by the increase in the pace of the road construction, as well as the ETO electronic call-up system by the NPA working effectively,” he added.

 

 

A few days ago, the House of Representatives opposed the bid by the Nigeria Customs Service (NCS) to buy new scanners because the 22 old ones procured at the cost $120 million are lying fallow. In this report, OLUWAKEMI DAUDA looks at the reasons the old scanners were abandoned and why boosting efficiency and trade facilitation at the seaports has become imperative.

 

Do we really need new scanners at the port? Should the scanners be provided by the government? Is physical examination good for our ports?

These questions and more are what importers, exporters, other port users and stakeholders want the House of Representatives to answer before taking a decision on the issue.

Many importers and exporters believe that it is easier for the camel to pass through the eye of the needle than to clear goods at the ports.

The Vice-President, Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayide Farinto, rooted for the provision of modern scanners to end the cumbersome manual process.

Farinto urged the government to address the situation.

An importer, Mr Felix Friday, exporters, clearing agents and other port users, who spoke with The Nation, said they were facing stringent requirements that have made goods clearance irritating.

Over 14,000 Customs officers were trained to take over scanning from the former service providers at the ports, The Nation has learnt.

The scanners were purchased in 2006 and handed over to the Nigeria Customs Service on December 1, 2013. But the Service alleged then that most of the scanners bought by the three suspended service providers were obsolete.

Since then, the Customs had been planning to import 50 new  scanners to ensure success and efficiency in container scanning by its officers, under the Pre-Arrival Assessment Report (PAAR) introduced at the ports by the late Comptroller-General of Customs, Alhaji Dikko Abdullahi.

Addressing reporters at the Federal Operations Unit (FOU), Zone ‘A’ in Ikeja, Lagos, the Comptroller-General of Customs (CGC), Alhaji Abdullahi, had said: “In the last seven years, the service providers were only able to provide 21 scanners. During the transition, we hired a consultant to help us ascertain the condition of these scanners. We also went to the manufacturers again to verify the status of these scanners. We discovered that the scanners are actually obsolete. They are not scanners that will deliver the vision of the Comptroller-General, but we still have to take over what we met on ground.”

The former SGS spokesman, Mr Lanre Badmus, however, denied the story. He said the mobile and the fixed scanners they left at the ports were new and working well.

But Abdullahi insisted that of the 21 scanners they inherited from Cotecna, SGS, and Global Scan Systems, only few were working.

Lamenting that the functional ones were not working well, he assured importers and clearing agents that new ones would be provided by the Customs.

To ensure efficiency in containers scanning under PAAR, the CGC expressed the readiness of the Service to import 50 modern scanners that would be deployed at the ports nationwide.

Dikko, however, said as part of the efforts and strategy to make Customs independent; the service had trained more than 14, 000 officers in readiness for the take-over.

He said: “But these service providers have been in and around us for over 30 years, and at the end of every contract, they come out with statements that Customs are not ready. You are very much aware this is a long battle fought and we must succeed. It is a fight from top to bottom and I want to thank Mr. President and also the Minister of Finance and Coordinating Minister for the Economy for being behind us to take over.”

 

Why Reps opposed Customs’ bid to buy new scanners

 

The House of Representatives said it was not disposed to the buying of  new scanners for the NCS when the 22 old ones procured at the cost of $120 million were lying fallow.

Minister of Finance Mrs Zainab Ahmed, who was represented by the Director, Home Finance of the Ministry of Finance, Stephen Okon, had told the lawmakers that arrangement was being made by the government to procure three scanners for the Customs as a stop-gap measure.

According to him, the unavailability of the spare parts was also responsible for the abandonment of the scanners.

He noted that the then Minister of Finance constituted a transition implementation committee with the mandate to collaborate with the manufacturers of the scanners to conduct an acceptance procedure test on them to make them operational before handing them over to the Customs.

He added that the faults detected were handed over to the service providers to rectify at the end of the exercise.

But, the representative of Smith Detection, manufacturer of the scanners, Manoj Jagtiani, claimed spare parts for the scanners were available.

Jagtiani said the scanners were still of good quality. According to him, the scanners at the National Assembly and the Presidential Villa were manufactured by them and they have been maintaining them for over 20 years, adding that it would be out of place to say the scanners had no spare parts.

At this juncture, the members of the committee alleged sabotage, wondering why the government would be thinking of buying new ones when the old one could be fixed.

”I am forced to believe that there is some element of sabotage somewhere because it does not make sense to abandon 22 scanners and made no effort to repair any of them and you are going to buy three or four. Why can’t we explore the option of repair and modernisng the existing ones?” a member of the Committee, Hon. Oluwatimehin Adelegbe queried, wondering why there was an MoU.

The representative of Comptroller-General of Customs, ACG A. Saidu intoned that the scanners were handed over to Customs without the consumables.

He said the Global Scan System was responsible for the consumables but regretted that the company while operating the system failed to fulfill its side of the deal.

The Speaker of the House of Representatives, Femi Gbajabiamila, regretted that the scanners were not functioning.

Represented by the Chairman of the House Committee on House Services, Wale Raji, Gbajabiamila charged the Committee to do a thorough probe.

He said: “In 2006, Nigeria acquired cargo scanners worth more than $120million, and retained the service providers on build, own, operate and transfer (BOOT) terms. The contract also provided that the service providers would provide training and technical support services to the Nigeria Customs Service on risk management, valuation and classification.

“By the end of 2013, the transition from COTECNA, SGS Scanning Nigeria Limited, and Global Scan Systems Nigeria Limited, the former service providers, was completed and the scanners handed over to the Nigeria Customs Service.

“However, within a year of the handover, the scanners had stopped functioning and Nigerian Ports and Borders were once again returned to the analogue process of physical examination.’’

On his part, the Chairman of the House Committee on Customs and Excise, Leke Abejide, said: “It is very easy to go undetected because scanners that should detect arms and ammunition were non-functional and left to decay. If we really want to secure our country, scanners must be allowed to function.

“It is my firm belief that this has nothing to do with our inability to purchase scanners, but everything to do with poor maintenance culture, lack of accountability, and deliberate economic sabotage.

“Therefore, the idea of purchase of new scanners or the revamp of existing but moribund scanners, without an attempt on the part of the Federal Government to get to the root of failure of the past scanners regime, will not be the case at this critical time. The status quo, I must say, is a national embarrassment and corporate crime against our national interest.”

 

In search of efficient port

 

For more than 12 years, Customs has promised that modern scanners would be installed at the seaports and 100 per cent physical cargo examination would be a thing of the past “by June”, “by May,”  or by just any month, as though tomorrow never comes. The un-kept promises pile up and build a deep-seated resentment in importers, exporters and the public, so much so that people are actually surprised when the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Shippers Council (NSC) say they are working to bring efficiency to the port without asking the Federal Government to stop Customs from doing 100 per cent physical examination of goods in the port.

But a senior Customs officer, who did not want to be named, said the public had refused to note the reason Customs failed to keep its promises to provide scanners. The service failed not for lack of trying. The service needs the money the politicians are embezzling to bring modern scanners to the port. The country, according to the official, “is bedeviled by a daunting array of problems that can dispirit any chief executive handling such an impossible set up like Customs. In the view of Customs, fraudulent importers are the greatest enemies of the country’.

Importers,he added, were blamed for their resentment of Customs. Such name calling or buck passing, investigation has shown, will not wish away the other problems. Perhaps, most serious, if the service would accept, is the dire shortage of  IT-compliant officers in Customs.

“If modern scanners are provided for them, how are they going to install new spare parts because the majority of them are old and not IT compliance? The majority of them that should have retired from the Service are still there. They are afraid of the new blood among them and that is why they prefer manual analysis to computerised system of analysing homogeneous and heterogenous goods when they are inside containers.

“The scanners they need have to be imported. Officers have to be trained on how to repair them when they are faulty. The scanners will surely need spare parts.

“The spare parts would not be picked up from the shelves. They have to be purchased abroad. But the much needed foreign exchange is not available in the desired amount. That may the reason the House of Representatives is opposed to purchase and importation of the new scanners.

“When officers are not well trained and there is no money to buy the spare parts, there cannot be maintenance of the equipment,” said a maritime lawyer, Muhammed Oluwaseyi.

An importer told The Nation that the physical examination and Customs billing system were like a hole in the Service’s wallet, through which billions of naira are lost monthly because of human contact, lack of transparency and non-provision of scanners at port. At most terminals, many goods were abandoned for years and, in many cases, Customs have forgotten them at the port.

A resident of Ojo in Ojo Local Government Area of Lagos State, Isiaka Owolabi, saw the bill of lading of two containers his brother imported from United States more than a year ago, before his sudden death.  He went to Apapa Port to meet a Customs officer on the issue. He was asked to wait. For almost six months, the wait was in vain.

“I went to meet another officer to help get the containers out, but the officer told me to tell them if the containers are not laden with arms and ammunition. I had to abandon the original bill of laden with him when I started receiving pressure from him to bring more money to speak to his Oga,’’ he lamented.

Another retired civil servant in Ogun State, long used to the past days of honesty when the NPA was in charge of the port, was surprised with what he saw when he came for the wedding of his uncle’s daughter in Amuwo Odofin, Lagos State. The road leading to the port was blocked by trailers fering containers. He spent more than three hours between Jakande Gate and the bridge linking Amuwo Odofin and FESTAC.

The recent statement by the Ministry of Transportation that the Nigerian Ports Authority (NPA) spends about N60 billion to maintain the channels leading to the port has provoked reactions from stakeholders in the industry. In this report, OLUWAKEMI DAUDA traces the high cost to the Joint Venture (JV) channel management contract agreement signed by NPA and its foreign partners.

 

Years after the contract on channels’ management was signed, the Federal Ministry of Transportation (FMoT) has decried the huge cash the Nigerian Ports Authority (NPA) is spending to maintain the channels leading to the ports.

The ministry, which was part of the deal, has, however, refuted the claim that its Minister, Rotimi Amaechi, requested that two Chinese firms be selected by the NPA to manage the channels leading to Bonny and Warri ports.

In a letter signed by the ministry’s Permanent Secretary, Dr. Magdalene Ajani, reads inter alia: “It is necessary to place on record that while ‘Channel Management’ contracts have been routinely awarded over the years by the Nigerian Ports Authority at a cost of between N50 billion and N60 billion on an annual basis, the Minister has adopted a firm position that the NPA should undertake the job of channel management on an in-house basis through the acquisition of the necessary machinery and professional capacity, given the humongous annual sums paid to dredging contractors by the authority.”

However, stakeholders in the industry have blamed the ministry and questioned its leadership for refusing to end the contract when it became obvious that it was skewed in favour of the foreign partners.

NPA, stakeholders said, by virtue of its enabling Statute, NPA Act Cap. No 126, laws of the Federation of Nigeria, 2004, is charged with the maintenance of the channels that provide access to the ports and may carry out any of these responsibilities through any other person authorised by it in that behalf.

Findings have shown that it was in pursuit of the forgoing policy that the NPA and the Federal Government invited a proposal from competent private sector operator to carry out capital and maintenance, dredging, bathymetric surveys, buoy maintenance, surveillance, visual pollution monitoring and reporting and other functions.

It was in line with the policy of the Federal Government, then, that the NPA, recommended that a Joint Venture Company be managed by the Lagos Channels and Ports to enhance efficiency and viability.

Depasa, had through its proposal dated August, 2004, presented itself as a world-class private operator specialised in dredging, marine and port engineering, marine infrastructure and long-term marine project development and management and feasible financial structures to the benefit of its public partners.

NPA, investigations have shown, obtained the nod of former President Olusegun Obasanjo dated, June 7, 2005 to enter the JV partnership with Depasa.

Genesis of the agreement

NPA and Depasa Incorporated a limited liability company known as Lagos Channel Management (LCM)Limited with the Memorandum and Articles of Association. It was in pursuit of the objective of the JV that the parties agreed to pull their resources as follows: NPA 60 per cent, Depasa 40 per cent.

A maritime lawyer, Dr Dipo Alaka, said: “How can the NPA sign this type of agreement with a foreign firm when the agency knew that all the money generated by the company would be repatriated to their country? Who is the owner of the water? Who is the owner of the port? Who are the shippers? Are they Nigerians or foreigners? When you attempt to answer all these questions, you will understand the mistakes made by the proponents of the agreement.”

Investigation by The Nation shown that the then Managing Director of NPA, Mr Adebayo Babatunde Sarumi, Mr Felix Ovbude and Mr Abba Muritala Muhammed represented  the Authority during the formation of the JV while Mr Gadi Ilan and Mr Eshel Pesti represented Depasa.

The parties, findings further show, agreed that 50 per cent of the share capital of N270million, being the counter value of $2million then, should be subscribed  in cash by both parties, in accordance with their equity holding in the JV thus: NPA 60 per cent – N81million and Depasa 40 per cent – N54million.

“If you consider the amount contributed by Depasa, then, and the amount it takes in from the port every year, you will know that the agreement was signed in their favour.

“The agreement was also established on three years’ budget, including allowances for possible emergency, further based on the prices and rates submitted by Depasa. All these are errors in the agreement signed by the NPA which successive ministers, including Amaechi, should have corrected immediately he assumed office. Even the budget of the entire country and each state are based on yearly approval, therefore, what makes that of the LCM so special that it could not be corrected before now?

Confidentiality

To show that the process was done with hope of keeping it from many Nigerians, it is written on page 15 of the agreement obtained by The Nation: Each of the parties shall at all times use its best endeavours to keep confidential (and to procure that it’s employees, agents and representatives shall keep confidential) any information of a confidential nature, which it or they may acquire in relation to the company or in relation to the clients, business or affairs of every other party or of the company and shall not use or disclose such information except with the consent of every other party  or of the company  or in accordance with the order of a court of competent jurisdiction or other lawful authorities or in the case of information relating to the company, for the advancement of the business of the company.

*The parties shall ensure that the company and its subsidiaries use all reasonable endeavours to endure that the officers, employees and agents of each of them observe a similar obligation of confidence as set our in clause 10.0 in favour of the parties to this agreement.

Termination

On page 17, the authors of the agreement wrote on termination as follows:

*This agreement shall continue be in force for 15 years from the effective date of this agreement or until sooner terminated  in accordance with the provision of this clause.

Renewal

The JV agreement shall have an initial duration of 15 years, which shall be renewable by mutual consent.

Therefore, if the Ministry of Transportation, which is the supervising ministry of NPA, is genuinely opposed to the renewal of this agreement, can the NPA alone, without the support of the Minister and the ministry official go ahead and renew it?

This is the question a former President, Association of Nigerian Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu wants Amaechi to answer. Amaechi, Shittu and stakeholders said, as the Minister of Transportation for almost six years, was aware that the Federal Government was hoodwinked in 2005, to sign an agreement that was done in favour of a foreign company that was engaged for the management and maintenance of the channel leading to the Lagos port but failed to address the situation until the recent quarrel between the ministry and NPA.

The 2005 JV agreement, signed by the NPA and Depasa and obtained by The Nation, shows that the agreement was skewed in favour of Depasa and the Ministry of Transportation was expected to have corrected the deliberate errors in the agreement before its expiration.

Dr Ajani wrote in the letter: “Indeed, following the expiration of the Channel Management contracts for the Lagos, Bonny and Port Harcourt Channels in 2020 and the initiation of the contractual process for the renewal of the said contracts early in 2021, the HMT on January 22, 2021, responding to a request for the NPA to provide requisite details related to the proposed transactions directed in the following words:

“There is the need for NPA to know that it should purchase their equipment and not award any contract. Pursuant to the above directive, the Ministry’s Maritime Services Department vide a letter No. T0160/S.30/T4E/T2/61dated February 2, 2021, to the Managing Director, NPA entitled: “Request for Information on the expired contracts: Channel Management and Managing Agent Contracts”.

The letter, inter alia, requested the NPA to provide the following information for the Ministry’s records and further action: ‘The status of the Managing Agent contract and the measures put in place to cover the vacuum created as a result of expiration of the contract to prevent revenue loss to the government; The status of the Lagos and Bonny/Port Harcourt Channel management Companies and the measures put in place to cover the gap created by the expired contracts to ensure the channels are maintained for safe navigation and efficient service delivery.

“The volume dredged annually from the channels and the depths achieved from inception management contracts to date and the amount expended. The number of wrecks removed annually by the Channel Management Companies from inception of the contracts and amount spent; and the total number of buoys replaced or maintained during the life span of the contract and the amount spent.

“I am to also convey the directives on the need for the Authority to procure its equipment for the service and cease from awarding any such contract,” the Permanent secretary wrote: Stakeholders said now is the time for the National Assembly to take proper action on the award of the channel management contract to foreign firms.

“After 15 years of allowing foreign operators, NPA, in collaboration with the Ministry of Transportation and other maritime agencies, must be able to handle the project, if truly some Nigerians were trained by Depasa as entrenched in the agreement it signed with the NPA,” said, an analyst, Mr Sesan Adenola.

 

By Oluwakemi Dauda

 

Rivers State Governor,  Nyesom Wike has given kudos to the Nigerian Maritime Administration and Safety Agency (NIMASA) for designing and pursuing a Blue Economy strategy to replace the oil economy in 10 years.

The governor requested the return of the agency’s Cabotage Department, which had earlier been moved to Lagos, to Rivers. He said his administration had procured gunboats for the security agencies, particularly the Nigeria Police and Nigerian Navy, to assist them to ensure security on the waterways and boost the maritime environment

Speaking in Port Harcourt, the state capital, when he received the Director-General of the agency, Dr. Bashir Jamoh, the governor said NIMASA’s plan for sustainable use of Nigeria’s abundant maritime resources was in line with the country’s economic diversification efforts.

The NIMASA chief appealed for greater involvement of the littoral states in the implementation of the Integrated National Security and Waterways Protection Infrastructure – also called the Deep Blue Project.

Addressing the governor and members of his cabinet, Jamoh appealed to the Rivers government to set up a committee to work with NIMASA to identify the state’s areas of comparative advantage in harnessing its vast ocean resources.

“The agency commenced the issue of Blue Economy to ensure that we have something that we will fall back on.  Let us give ourselves at least within the next 10 years, so we can develop our ocean resources,”Jamoh said.

The DG appreciated Wike’s effort in rebuilding Rivers into reckoning with tremendous investment in infrastructure, health, education, and the judiciary that had bettered the lives of the people.

The security scheme, which is domiciled in NIMASA and being executed in conjunction with the Nigerian Armed Forces and other security agencies, Jamoh said, aims to check piracy and armed robbery in Nigeria’s waters up to the Gulf of Guinea.

The NIMASA DG had visited many of the eight littoral states to seek more participation from them in the Blue Economy initiative and the Deep Blue Project. He urged them to set up committees to work with NIMASA in the execution of the economic and security plans.

Wike commended Jamoh for the new initiative of harnessing ocean resources to serve as an alternative revenue source that would end the mono-economy status of Nigeria.

He said: “Let me commend the DG for taking the bull by the horns; by coming to visit, regardless of whoever appointed you, to do the right thing.

“Let me thank you as one of those who have looked into the future that Nigeria cannot continue to depend solely on one product and that is oil. There comes a time that the wells will dry up, and when the wells are dried, what is the alternative? Is it at that time we will begin to seek for an alternative? So you are on the right track by identifying that we should go for the blue economy.”

The governor pledged to partner NIMASA in human capital development and proposed the adoption of the Government Sea School, Isaka, in Okrika Local Government  Area, as an institution for seafarers’ training.

“This will help the industry and create a lot of manpower for our people and employment,” he said.

The governor expressed the readiness of the government to partner NIMASA on the Deep Blue Project, saying it would help to enhance security and youth capacity in Rivers State. He promised that the state government would constitute a committee to liaise with NIMASA on the Deep Blue Project.

 

Stakeholders in the maritime industry have stressed the importance of human factors to shipping.

The stakeholders, who spoke with The Nation, said seafarers who move cargoes across the globe, need attention and protection by their employers.

A stakeholder, Mr Kehinde Adefeji, said:”Employees are the most critical factor that determine the success of a firm. This is even truer in the maritime industry that is capital intensive and where safety is paramount, so constant training and development as well as welfare of workforce must be taken seriously.”

Another stakeholder, Mr Aladejobi Ibrahim, urged African businessmen to pay great attention to workers’ welfare to compete favourably in the international market.

He commended the International Labour Organisation (ILO) for the review of Maritime Labour Convention (MLC) 2006 and advised that considerations should be given to peculiarities of the various geo-political areas of the world in the amendments of laws governing industry.