The Nation Newspaper

Category: Maritime

  • Licensed Customs agents rue high cost of clearing goods

    Licensed Customs agents rue high cost of clearing goods

    By Muyiwa Lucas

    Worried by the high cost of clearing cargoes at the ports, the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA) has sent a petition/appeal to the Federal Government to take proactive measures that will ensure a reversal of the situation.

    The letter, addressed to the Secretary to the Government of the Federation (SGF), dated July 15, 2020, was signed by the NCMDLCA National President Lucky Amiwero, was titled: “The High Cost of Doing Business in Nigerian Ports.”

    The body listed factors that contribute  to this to include gridlock on ports’ access roads; delay in scanning and physical examination; duplicated charges and charges not tied to service; cargo dwell time/cumbersome and lengthy port procedures; block stacking, and lack of infrastructure, among others.

    Describing clearing cargoes at the ports as “extremely costly, duplicated, lengthy and cumbersome procedures,” Amiwero said these have made the ports less preferred to other ports in the West African sub-region. He regretted that as a member of the lnter-Ministerial Task Force on the review of levies, charges and rates at the sea ports in 2001, there is a gradual failure in the country’s ports system. This, he maintained, has remained a sore point for stakeholders in the industry.

    For instance, Amiwero said the gridlock on the port access roads and environs has added an additional 500 percent increase to the cost of transportation of cargoes and empty containers.

    He added that extortion and entry fees into Apapa ports, for instance, cost between N140,000 and N155,000 for 20 feet (TEUs); and N215,000 to N250,000 for 40 feet TEUs before being allowed to enter the port. The return of 20 feet and 40 feet empty containers to holding bays costs about N50,000 to N65,000 and N80,000 to N100,000

  • Apapa traffic: Need for stakeholders’ commitment

    Apapa traffic: Need for stakeholders’ commitment

    Can Apapa and its two arterial roads be rid of traffic congestion? Experts say while clearing Apapa, Lagos of traffic is near impossible, managing it is a possibility only if stakeholders want it stamped out, writes ADEYINKA ADERIBIGBE

    FOR many Nigerians, Apapa, Lagos has continued to be an embarrassment in terms of its dilapidated infrastructure and traffic nightmares which, they argued, have defied logic.

    But stakeholders of that axis are quick to say that Apapa is becoming saner, and things could really get better, if they are prepared to sustain the gains of the past 16 months.

    One of those who believed that a silent revolution had swept through Apapa in the past year is Brig.-Gen. Ayo Vaughan (rtd), chairman of the Apapa GRA Residents Association, who has watched the scenic beauty of Apapa distorted as the port city quaked under the yoke of international commerce.

    Brig.-Gen. Vaughan said the Presidential Task Team (PTT), led by Vice President Prof Yemi Osinbajo, assisted by the Executive Vice Chairman, Comrade Kayode Opeifa, had cleared the traffic and restored order despite the challenges of infrastructural renewal being embarked upon to complement the mop up going on in the area.

    Vaughan is a member of the PTT and he believes the ‘taskforce’ has done creditably well.

    A park operator, Alhaji Umar Danlami, said other truck operators and he would be grateful to the Osinbajo-led team for the ‘wonders’ it had performed in Apapa.

    Danlami, who owns the Danlami Park, one of the biggest nominated parks in Apapa, said it was a great relief that many operators spend seven days to enter the wharf or the Tin Can Ports, as against the months that each spent before the PTT intervention.

    The Executive Secretary, Nigerian Shippers Council (NSC), Hassan Bello, blamed the situation at the Tin Can Island Container Terminal to activities of “ports rats”. He said human traffic would be stamped out once terminal operators embraced automation.

    But Opeifa, who had been lamenting the gradual reversal of the gains of the PTT, said despite these, the Task Force would continue to remain focused, to accomplish the presidential mandate of making Apapa a functional port city with the least impact on those living there or along the corridor.

    Taking some reporters round the port, Opeifa carpeted what he called “corruption fight back”, who are bent on changing the narratives and craving a reversal to the era of confusion which had hitherto provided huge illicit cash.

    Opeifa, who said traffic would be at Apapa since the port, the nation’s second largest revenue earner was not shut, said the trucks flow into Apapa could be accommodated if stakeholders functioned optimally.

    He identified the Lagos State government, the NSC and the Nigeria Ports Authority (NPA), as critical to reducing Apapa traffic.

    Opeifa wondered why the electronic call up system (e-call up), which was said to have come up since August 1, last year was still in the cooler a year after, while the NSC had continued to treat with kid gloves infractions of terminal operators whose refusal to accept empty return containers have continued to cog the roads.

    Even more disturbing, according to Opeifa, is the proliferation of illegal barge and jetty operations at Apapa. He accused many residents with beach front homes of turning them to avenues for slush funds.

    Opeifa said he had been at the forefront of preventing such distortions of the Apapa plan, because the barges deposit the containers on the roads rather than take them to terminals inside the ports.

    Opeifa said the main cause of traffic jam in Apapa was the closure of roads as a result of the ongoing rehabilitation. He said the Lillypond Truck Park at the Wharf end and the Tin Can Truck Park had been shut to trucks as a result of rehabilitation. He added that the situation would improve once the roads were completed.

    He said the initiative by the Muhammadu  Buhari-led administration to farm out the four access roads to the ports to private contractors had been successful. He added that by December, when the roads, especially Liverpool, is handed over to the government, the stimulus for the graft culture, especially on that axis of the port, would have been snuffed out.

    Opeifa restated that the PTT had since completed its job of restoring law and order at the ports. He said consolidating on the successes of the PTT required more commitment of other stakeholders.

    “We need the port management and the Federal Ministry of Works to show more interest in the activities around the ports and they need to be more humane,” Opeifa further added.

    He said the PTT had chosen to remain focused and stop being distracted by the counter directives from the NPA and other stakeholders. He added that the PTT is doing its best to adhere to its terms of reference.  He said the PTT is not established to work for any terminal, or take over the responsibilities of any stakeholder.

    He said the coming of other initiatives, such as the take off of other ports across the country, the take off of the inland dry ports, the coming of the railways into Apapa, and the introduction of the barges, as well as the rehabilitation of the roads, would help address the crisis Apapa has constituted.

     

     

     

  • Survival options for local carriers

    Survival options for local carriers

    Global air transportation is going through its most challenging moments, following unfavourable travel statistics released by the International Air Transport Association (IATA).

    According to IATA, 55 per cent of passengers surveyed in the world said they do not plan to travel in the year. Besides the lowering passenger traffic airlines are grappling with, IATA said the sector might not rebound post-COVID-19 era until 2024.

    Its Director-General/Chief Executive Officer, Alexandre de Juniac, said while short haul travel was expected to recover faster, long haul flights would take longer.

    He said: “Passenger traffic hit bottom in April, but the strength of the upturn has been very weak. What improvement we have seen has been domestic flying. International markets remain largely closed. And, in many parts of the world, infections are still rising. All of this points to a longer recovery period and more pain for the industry and the global economy.”

    The IATA boss said the travel industry was going through a lull because of reduced business due largely to shrinking corporate travel budgets.

    Juniac said while pent-up demand existed for visiting friends and relatives, leisure travel and consumer confidence remained weak in the face of concerns over job security and rising unemployment, as well as risks of catching COVID-19.

    To keep airlines afloat, experts said various collaborations were open to operators, including alliances, codeshare, interline agreements, mergers and other convenient models.

    In Nigeria, three weeks after domestic travel resumed, operators are still struggling to have their aircraft filled. The development has called to question the aircraft type used by airlines and the need for them to embrace cooperation.

    To keep their operations afloat, experts have advised local carriers to initiate codeshare agreement to enable them maximise the use of their aircraft.

    Chairman, Association of Aircraft Maintenance Organisation of Nigeria (AAMON), Isaac David Balami, has called on domestic airline operators to work together to sustain their operations.

    He said there was no better time than now for operators to put aside their ego and save themselves from running into debts with the poor passenger load factor they are recording on the routes.

    Balami said in Lagos a situation where three airlines schedule to fly to the same destination carrying about 30 passengers each on an aircraft with over 100 seats did not make business sense.

    He said if the operators reach a codeshare agreement, the passengers could be taken to thier destination on a full aircraft operated by an operator, adding that this had proved to be a win-win for many airlines, which adopted the model.

    “The problem of domestic airlines is first and foremost that there is no unity;  like the way and manner Air France and KLM are working together. You hardly see two, three airlines coming to work together.

    “You see three airlines taking off at the same time with five passengers and they cannot say let us merge and they cannot say let only one person go because of pride and lack of unity,” he  added

    He said if the strategic plan was embraced by operators, they should be willing to avoid any default to sustain the agreement.

    local carriers

    Balami continued: “It is not their fault also. Sometimes, you want to collaborate with somebody and the person would want to take advantage of you. Sometimes you agree on a codesharing formula. Some people will default and that takes us back to what we are talking about.”

    According to the AAMON chairman, “So, the problem is that we need to look at that critically. We have issues. It is not easy. All hands have to be on deck. I look forward to airlines coming together as soon as possible to start code sharing; at some point an airline management would tell you that ‘my airline is a new generation, yours is old generation; how can you do code sharing? But there could be a balance.”

    Balami, however, noted that some airlines  were trying their best; airlines that have been there for over 15 to 20 years unlike the normal lifespan of 10 years, but no encouragement.

    A few years ago, operators disagreed on the merger option for airlines.

    Accountable Manager, DANA Air, Obi Mbanuzuo, said merger was not the solution to challenges operators were grappling with

    Although the proposal has worked in other countries, according to Mbanuzuo, it still remains a mirage in Nigeria because carriers are too weak. He said airlines could collaborate in many areas while maintaining their individuality.

    He said airlines in Nigeria were too weak to exploit the merger option because the weaker partner in the deal could pull the other down.

    Mbanuzuo said operational partnership, by pooling equipment and personnel on some strategic routes, could enhance the capacity of many airlines.

    But the operational environment, he said, is not yet ripe for such arrangements because each carrier has its structural template for operations, which differs from airline to airline.

  • World Bank: AfCFTA to boost Africa’s income by $450b

    World Bank: AfCFTA to boost Africa’s income by $450b

     By Collins Nweze

     

    The African Continental Free Trade Area (AfCFTA) will attract over $450 billion income to African economies, the World Bank report has shown.

    According to the report, the AfCFTA represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion, a World Bank report has found.

    “If implemented fully, the trade pact could boost regional income by seven per cent or $450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035,” it said.

    The report suggests that achieving these gains will be particularly important given the economic damage caused by the coronavirus (COVID-19) pandemic, expected to cause up to $79 billion in output losses in Africa in 2020.

    The pandemic has caused major disruptions to trade across the continent, including in critical goods, such as medical supplies and food.

    Continuing, it said most of AfCFTA’s income gains are likely to come from measures that cut red tape and simplify customs procedures.

    Also, tariff liberalisation accompanied by a reduction in non-tariff barrier, such as quotas and rules of origin, would boost income by 2.4 per cent, or about $153 billion.

    The  balance would come from trade facilitation measures that reduce red tape, lower compliance costs for businesses engaged in trade, and make it easier for African businesses to integrate into global supply chains.

    Other stakeholders see the AfCFTA as  a policy to accelerate regional and economic integration in Africa.

    The implementation of the AFCFTA is expected to help the continent have control of its economic future even as the  United Nations Economic Commission for Africa forecasts African Gross Domestic Product would decline by 3.2 per cent to -2.8 per cent in 2020 due to the effects of the COVID-19 pandemic hence the need to boost trade on the continent.

  • Towards a digitalised port system

    Towards a digitalised port system

    The Nigerian Shippers Council (NSC) recently hosted the chief executive officers of maritime agencies. OLUWAKEMI DAUDA reports.

     

     

    ONE major issue dominated discussions at the parley of the chief executive officers of maritime agencies hosted by the Nigerian Shippers Council (NSC): How to move the industry forward through digitilisation.

    At the forum were the Executive Secretary, Nigerian Shippers’ Council (NSC), Mr Hassan Bello; Managing Director, Nigerian Ports Authority (NPA), Hadiza Bala-Usman; and Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh.

    Others were Dr. George Moghalu, managing director, National Inland Waterways Authority; and Commodore Duja Effedua (rtd), rector, Maritime Academy of  Nigeria (MAN), Oron.

    Ms Bala-Usman said improved synergy among heads of maritime agencies was vital to enhancing operations in the sector.

    According to her, ‘’we have decided to hold monthly meetings among all the agencies that are under the maritime industry’’.

    ‘’We intend to have the meeting every month for the next four months and subsequently we will be having it quarterly,” she said.

    The NPA boss said they would sustain the engagement and provide regular briefings on areas that need improvement.

    Jamoh said the agreement followed the work of a ministerial committee, stressing that such meetings are necessary to build synergy and create the right atmosphere for the progress of the economy.

    He said there was no better time to improve synergy among agencies under the Federal Ministry of Transportation than  now ”When the COVID-19 pandemic and the accompanying disruptions to business and economy have placed a great deal of responsibility on the maritime sector as a vital support to the economy and key medium for the movement of essential supplies’’.

    He stated: “We have held the inaugural meeting for improved synergy and we hope to hold it on a monthly basis for the next four months.

    Due to the proximity of our corporate headquarters to each, a lot of gains will be achieved in a short while without the usual official bureaucracy.”

    The DG added: “From our discussions and deliberations, we have decided on so many issues that concern national development, overlapping functions, and others.’’

    Bello said NSC called for synergy to increase business value and enthrone transparency, speed up efficiency and safety in port activities and supply chains. He said the industry needed to leverage digitalisation to optimise operations.

    Nigeria, he said, needs to combine and evolve 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.

    Their collaboration, according to him, would open up the ports to meet the challenges of globalisation, demographic change and urbanisation.

    Digital solutions, Bello said, would simplify port processes, improve efficiency and safety along the entire maritime transport chain.

    Their collaboration would lead to  targeted exchange of information and data and the ports would develop to international standard by using  new business models, he said.

    Their discussion, the NSC chief  said, centred on how they could utilise the Internet of Things (IoT), Artificial Intelligence (AI), blockchain and big data to make the seaports more efficient and capable of handling greater volumes of goods.

    He said ports, terminals and vessels that carry the goods were critical to the  economy hence, their decision to synergise for the future.

    To meet challenges that might be facing the seaports, Bello said, the country needs to invest on infrastructure to redefine cross-border trade and accelerate the movement of products in addition to creating local and global environments.

     

    Digitalisation of the ports

    “We need 24/7 operations at the ports. But the cardinal thing is the digitalisation of ports’ system and processes. We want our ports to be contact less, paper less and digital ports. It is important.

    Digital ports, that means you are removing human contact and that will reduce corruption.  Which we cannot hide because it is affecting the performance of our ports.

    “So, how we are going to do that is to look and approach all relevant stakeholders. We know we have to talk with freight forwarders, we have to talk with Customs, we have to talk with the terminal operators and we have to talk with almost everybody in the sector so that we can start this  24/7 port operations.

    “Sixty per cent of the operation is done digitally, but we need it it to be 97 per cent. So, what is remaining is invoicing, people have to go to the port.

    No! You should be able to generate your invoice electronically. Therefore, we have to talk the banks, the terminal operators and the shipping companies and the Customs. Each one of them have their own system and we have to Integrate them.

    “By the first quarter of next year, there would be appreciable digitalisation of our ports. So, if we digitalise our ports, that means we can have 24/7 operations. Not many people will have to go to the ports to exit their cargo.

    “We have agreed  to work together. We need the synergy because we have realised that it is the synergy that is missing.

    All of us have our statutory responsibilities and sometimes it overlap. Therefore, what is needed is for us to come together and help each other or one another to make sure that all these things are done well in our ports,” he said.

    The industry, Bello said, is having to play catch up with aviation industry is the gap in technology and skills including costly implementation, time-consuming processes to visualise the data, and a negative experience with technical support resulting in an unruly amount of data

     

    24-hour port operations

    Bello also said the heads of  agencies have agreed to put in place a solid measure that will lead to 24-hour port operations.

    ‘’We need our ports to be there 24/7. Just like the airport, I will always say that at the airport, you can land at 3.00a.m, you can land at 5.00p.m  and you can land at 12 O’clock and the most important thing is that the workers are there. We want a replica of what is happening in our airport to happen in our sea ports,” he said.

     

    Intermodal delivery and evacuation of cargo

    Bello also said their collaboration would lead to intermodal delivery and evacuation of cargo.

    “There must be the road, the inland waters with the barges and the rail. The Nigerian Shippers Council has promoted the evacuation of cargo, bringing in empty containers and exports by rail.

    We are struggling to do this with the Standard Operating Procedure (SOP) with the APMT and Nigerian Railway,’’ he added.

  • ‘Barge, off-docks will aid port decongestion’

    ‘Barge, off-docks will aid port decongestion’

    By Muyiwa Lucas

     

    The Executive Director, SIFAX Off-Dock, Captain Ibraheem Olugbade, has urged  stakeholders in the maritime sector to adopt barge transportation for the movement of consignments from the Lagos ports.

    Olugbade said the challenges of congestion and traffic caused by bad access roads would reduce, if credible alternative to road transportation like barge, is encouraged by shipping lines and agents.

    He said: “Shipping lines and agents should be encouraged to key into the use of barges for transfer in view of the poor state of the port access road.

    Aggressive transfer of cargoes through barges to the various off docks in Lagos will help decongest the port in a way and help the port reach its maximum potentials.”

    He urged the Nigerian Shippers Council and other relevant agencies to execute the policy of establishing inland container depots in various parts of the country with more vigour as this will provide a very important leeway for the decongestion of the ports.

    “The idea of floating inland container depots or off docks in various parts of the country is a very good initiative by the government.

    Although it is yet to yield its desired result, there is a need to pursue its implementation with more commitment by all stakeholders.

    Off docks are still very much relevant in the maritime business model. They will always help to decongest the ports and bring about efficiency in port operations,” he said.

    Olugbade further noted that SIFAX Group’s belief in off- dock as a good port-decongestion strategy is responsible for the company’s massive investment in its off- dock facilities and acquisition of new ones in various locations across Lagos. This, he said, would enable agents to experience easier clearing and faster consignment movement.

    On the indiscriminate siting of off-docks in Lagos, Olugbade urged government agencies to  enforce the policies that guide the off- dock location in Lagos State to avoid environmental hazards.

  • Covid-19 takes toll on Kaduna Dry Port

    Covid-19 takes toll on Kaduna Dry Port

    By Muyiwa Lucas

     

    Barely five months into the outbreak of the Coronavirus (Covid-19), some operators in the sector are already feeling the heat on their operations.

    One  such operator is the Inland Containers Nigeria Limited (ICNL), operators of Kaduna Inland Dry port.

    The Managing Director of ICNL,  Ismail Yusuf, said the economic effect of the Covid-19 has taken a toll on firm’s projections for the year.

    This, he further lamented, had reduced its operations to less than 70 percent of its projections for the first half of the year. The implication of this is that it has become almost impossible for the dry port to meet its 2020 target, he added.

    “You may see that we are working, but in the next two or three months, we may have less work to do. Even though the Federal Government allowed the maritime sector to operate during the COVID-19 lockdown, it didn’t imply that all our customers made orders to purchase goods abroad.

    Normal importation is yet to resume. Importation has been affected during this period. What you see people bringing in now  are things  they have ordered before the covid-19 pandemic,” Yusuf lamented.

    His lamentations are hinged on the performance of the ICNL so far. Yusuf explained that the firm’s projection for the year was about 30,000-Twenty feet Equivalent Units (TEUs) of containers.

    However, so far, only about 70 percent of the 15, 000 TEUs projected for the first half of the year has been achieved at the beginning of the second half of the year.

    “We have done just about 10,000 TEUs and we are in the seventh month of the year and there is no hope that the volume will increase later in the year.

    Most of the jobs we did in the half year are those orders that customers have made towards end of October, November and December last year that they shipped, and they are just coming in.

    Most of our customers have not gone to the market to place orders because no flights, no transaction, banks are not working normally and even the exchange rate is going up every day because of scarcity of dollar.

    So, definitely the volume of activities will continue to drop until we are able to salvage the problem on ground ,that is the pandemic,” he explained, adding that the plan was to surpass last year’s target, but which this pandemic has made an illusion.

    Yusuf also rues the effect of the suspension of rail transport as a result of the Covid-19 pandemic on ICNL. He explained that owing to this, the firm spends N1.2 million to move a container by road from Lagos to Kaduna instead of N500,000 and N600,000 they  paid when such operation is carried out by rail.

    “The majority of our containers have been moved by road instead of rail and that has increased the cost of doing business.

    The truck that we used to hire N600,000, N700,000 before, we are paying N1.2million now and if you use rail you will not pay more than N500,000 or N600,000.

    Look at the gap from N600, 000 to N1.2million, we are losing about N600, 000; who pays for it? It is still Nigerians that are going to patronise what the importers has imported,” he said.

    According to him, the purpose of establishing the dry port is to serve the people at the hinterland that are very far away from the coastal area or the seaport so that they can also enjoy the facility and opportunities the people living around seaports enjoy.

    However, given that some of the support infrastructure for the effectiveness of this dry port has been hampered by this pandemic, the full benefits are not being felt.

    ICNL, Yusuf further said, had to engage third party transporters to move cargoes using their trucks, so it could savage the backlog of cargoes following the stoppage of the railway operation of cargo movement. This mode, he added, would remain in place until the return of the rail services.

    For now, stakeholders warn that Nigeria may lose more if a developing trend continues. This is because neighbouring countries like Niger Republic are taking advantage of the country’s inability to move cargoes from Lagos to Kaduna and Kano by routing  their transit cargoes from Benin Republic to Niger Republic.

    Yusuf said his firm has visited Niger Republic to seek their patronage for the Dry Port and that a reciprocal visit has been made by the neighbouring country so that an agreement can be reached because Kaduna Inland Dry Port is closer to Niger than Benin Republic.

    “We will go back to see how we can ensure that Niger Republic can move their goods through our dry port. We still have a lot to do in this area.

    We understand that the government is being careful over issue of border closure because they don’t want any country to bring in prohibited items into Nigeria through trans border trade. I am sure the government will solve these issues soon,” he added.

  • Analysts seek liberalisation of LADOL free zone

    Analysts seek liberalisation of LADOL free zone

    Our Reporter

     

     

    Maritime analysts have stressed the needs for the Federal Government to liberalise the LADOL Free Zone in Lagos to break the chain of monopoly.

    The monopoly, according to them, have hindered development of the over 121 hectares of land in the zone.

    Speaking to journalists in Lagos at the weekend, some of the stakeholders argued the purpose of setting up the free zones (FZs) was to attract Foreign Direct Investment (FDI), generate employment, encourage transfer of technical skills to Nigerians and boost the economy.

    A Lagos-based investment advisor in the maritime sector, Mr. Tunde Hamzat, lamented that rather than attract investments, the LADOL free zone has been enmeshed in controversies in recent years.

    He said such controversies scare reputable investors.

    “We remember the killing of a Korean working in the free zone in April 2019 by an operative of the Nigerian Security and Civil Defence Corps (NSCDC), Mr. Innocent Oshemi.

    “Activities in the zone are characterised by multiple litigations between the investors and the zone manager.

    “Very recently NPA alleged that LADOL shortchanged the Federal Government to the tune of N16 billion. Indeed, stories coming out from the free zone have become too scary for investors to stake their money.

    “The zone operator claimed to have received support from the Central Bank of Nigeria (CBN), Nigerian Content Development and Monitoring Board (NCDMB) and Bank of Industry (BoI) but those familiar with the zone know that there are no investments on ground to justify such huge support.

    “This has justified the popular call for the EFCC to probe the facility,” he added.

    Read Also: Urgent need to halt mismanagement at LADOL free zone

    Bayelsa -based oil services provider, Mr. Akpan Ekong, stressed the over 121 hectares of land is too big to be managed by Global Resource Management Free Zone Company (GRMFZC), an affiliate of LADOL.

    Ekong insisted that LADOL’s continued stranglehold on 121 hectares of land at Tarkwa Bay in Lagos has hampered the Federal Government’s efforts to attract investors to the Lagos Free Zone.

    Ekong disclosed that for over 20 years that LADOL has been managing the zone, a large chunk of the 121 hectares of land has remained undeveloped because of the operator’s lack of capacity to form alliances with local and foreign investors to boost developments at the FZ.

    He said these overlapping and conflicting roles have resulted to exorbitant charges that scared away investors, thus defeating government’s objective of making the FZ an investment hub.

    Warri-based analyst, Mr. Nelson Peters, also pointed out that as the agent of regulator (NPA), LADOL also exercises governmental and regulatory powers over all free zone enterprises within the zone.

    “It is evident that this monopolistic tendency has frustrated the free zone operator’s crucial role of attracting investors as it now focused on pursuing its pecuniary benefits at the detriment of the foreign and local investors in the zone and the Nigerian economy,” he added.

     

     

     

  • Ladol and NPA’s N16bn allegation

    Ladol and NPA’s N16bn allegation

     Ayo Lawson

    Nigerians and the international business community were shocked in late 2019 when the Nigerian Ports Authority (NPA) reportedly sanctioned the Lagos Deep Offshore Logistics (LADOL), operator of LADOL Free Zone in Lagos for shortchanging the federal government to the tune of N16 billion.

    NPA had late last year accused LADOL of economic sabotage and revoked its land lease agreement for violating the terms of the land lease at Tarkwa Bay, near Light House Beach in Lagos.

    NPA revoked the lease via a letter dated November 14, 2019 and addressed to the Managing Director of Messrs Global Resources Management Limited (GRML), the parent company of LADOL.

    The letter, signed by NPA’s General Manager in charge of Land and Asset Administration, Mr. Yusuf Ahmed accused LADOL of subleasing 11.2426 hectares of land out of the total 121 hectares leased to it at outrageous amount of money without recourse to NPA.

    NPA accused LADOL of collecting $45 million (N16.2billion) from a new tenant for the 11.2426 hectares of land for which it paid only $524,105 (N37.73 million) to NPA.

    Following these infractions, NPA terminated the lease agreement.

    However, NPA also granted a fresh lease under new terms to LADOL for 5.7574 hectares of developed land and 69, 2874 hectares of undeveloped land.

    LADOL ignored the weighty allegation for several months and did not explain why it collected N16 billion from a tenant for a small portion of land for which it (a caretaker) paid only N37.7million to the landlord (NPA).

    However, the company appears to have found its voice in the press in June 2019, when it claimed that it had bypassed NPA (its landlord) and successfully got presidential approval nullifying NPA’s sanctions.

    Following this display of what maritime stakeholders described as arrogance, the stakeholders have reportedly called on the Economic and Financial Crimes Commission (EFCC) to investigate NPA’s allegation.

    Rather than voluntarily submit to the EFCC to clear its name of the weighty allegations by the NPA, LADOL told barefaced lies against reputable investors.

    First, LADOL falsely claimed that it is the landlord in the LADOL Free zone, when it is actually the caretaker while the NPA, which represents the federal government, is the landlord.

    Second, LADOL claimed that before 2013, the LADOL Free Zone was fully operational, with established and functional facilities to attract investors.

    Read Also: NIMASA, NPA agree on wreck removal

    This claim was also found to be a blatant lie as the zone was a swamp with no facilities to attract investors, except its strategic location in Lagos.

    Can LADOL name the investment that had existed in the zone before 2013?

    Indeed, it can be verifiable that up till today, the only serious investment in the zone is the fabrication and integration yard, which LADOL acknowledged was built by a foreign investor as a “contractor”.

    Third, LADOL claims to be a champion of local content, when it is has never done any serious business in the zone, except to provide water, electricity and boat services for any investor that comes into the zone to promote local content.

    With workforce of less than 30, LADOL is not known to have executed any fabrication or construction projects for either the oil industry or the maritime sector so as to give Nigerians the opportunity to develop their capacity and be gainfully employed.

    The free zone operators merely just acts as a caretaker of an undeveloped swamp that is waiting for investors to develop.

    So, where are the jobs it has created or the projects it has executed to promote local content that it prides itself local content champion?

    In fact, instead of encouraging reputable foreign construction giants to invest in the zone and provide employment to Nigerians, it has reported in the media that it frustrated American Africoat  out of Nigeria and attempted to frustrate global shipbuilding giant, Samsung Heavy Industries of Nigeria (SHIN) out of Nigeria with its highhandedness and multiple litigations.

    This writer gathered that the reason SHIN refused to leave Nigeria is its faith in the Nigerian government.

    The fifth lie is that LADOL claimed that a foreign investor suddenly seized its land when it was NPA that legally allocated just a mere 11.24 hectares to the investor, and reallocated over 70,000 hectares back to LADOL.

    But if LADOL (a caretaker) can bypass NPA (its landlord) and obtain purported presidential approval, what is wrong with a tenant bypassing the caretaker (LADOL) to sign a legally binding agreement with the landlord (NPA), which represents the Nigerian government?

    Indeed, if shortchanging the government as alleged by the NPA and muzzling foreign investors qualify a company to be local content champion, then LADOL is indeed, a global local content champion.

     

     

    ….Lawson, a maritime investment advisor, writes from Warri

     

  • Making the ports competitive

    Making the ports competitive

    Oluwakemi Dauda

    In any economy, the maritime industry is akin to a cash  cow.  Nigeria’s is not an exception.

    Hence the Nigerian Ports Authority (NPA) has a very crucial role to play in economic growth and development.

    A top Federal Ministry of Finance (FMoF) official told The Nation at the weekend, that President Muhammadu Buhari appointed the Managing Director, Nigerian Ports Authority (NPA), Ms Hadiza Bala-Usman to unlock ports and sea potential to facilitate economic prosperity and generate employment.

    NPA, the official said, has made the seaports attractive for business by investing on equipment and port infrastructure in terms of loading and unloading cargo as well as reduction in the cost of doing business.

    Ms Bala-Usman was appointed four years ago by President Buhari.

    The NPA chief, the FMoF official and other maritime stakeholders said, had done well.

    The official, who asked not to be named, said the NPA, in the last four years, has generated a huge revenue in local and foreign currencies, which has made it possible for the Federal Government to invest part of the money generated from the industry in the economy because of  the dwindling oil revenue.

    The official lamented that there had been a reduction in cargo volume since the beginning of the year, blaming the problem on COVID-19 pandemic and some policies on importation.

    “It would be recalled that in 2006, $1 exchanged for about N130, but today, it is between N380 and N400 to a dollar, which implies a significant decline of about 70 per cent in the value of the national currency since port concession and that is why some of us are impressed with the positive initiatives of the current management of the NPA,” the official said.

     

    Strengthening the  ports

    Yearly, the ports handle over several million tons of goods. This, the FMoF said, makes seaports important to the economy.The management of NPA, he said, needs to be supported to strengthen the  ports across the country.

    “Every day, everyone in Nigeria even during this COVID-19 pandemic, Nigerians are using products and raw materials that enter the country through our seaports. This may not be possible if not for the consistent efforts of the NPA and collaboration with other maritime agencies.

    “ It is based on the usefulness of seaports, that we have various industrial companies – for example, chemicals, refineries and metal – raw materials processing that are paying enormous tax to the government. The main competition the seaports face comes from other neighbouring seaports, but the land borders have been under lock and key for so many months. This means our seaports have to be attractive in terms of loading and unloading cargo as well as being attractive places to establish businesses.”

    The Managing Director of NPA, a maritime lawyer, Mr Adekunle Onabanjo said, is strengthening the sector.

    To this end, the NPA, Onabanjo said, should ensure that the seaports are  accessible via waterways, rail, road and pipelines; optimise the use of the infrastructure, such as roads and railways, make optimal use of the limited space at seaports.

    Also, NPA’s General Manager, Corporate and Strategic Affairs, Mr Adams Jatto said the agency has drawn  an action plan aimed at strengthening the seaports and make it competitive.

    The plan, according to the image maker, focuses  on the following: the seaports and its neighbouring countries, accessibility and logistics, entrepreneurship and the labour market, sustainability and innovation, seaports and their surroundings, port collaboration and safeguarding public interests and information technology  IT, among others.

    According to the Vice President,  Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto, the Managing Director of NPA has performed.

    He said: “The seaport is a place where the ships are sheltered. It is also the place where the goods pass, or even where they are transformed. Therefore, anybody that had managed it successfully, the way Hadiza has done in the last four years deserves our support.’’

    Ports and shipping are foremost tools of international trade. There is a reciprocal growth, world trade in volume, tonnage transported by sea, tonnage handled in ports and the world fleet. This interdependence has been demonstrated empirically and theoretically,  other stakeholders told The Nation at the weekend.

    Investing in infrastructure, equipment

    After years of neglect and inconsistent government policies, the management of the Nigerian Ports Authority (NPA) has invested in equipment and infrastructure to ensure ports are efficient and competitive.

    Findings revealed that in the last four years, the NPA has invested over $300 million in equipment and infrastructure. For instance, as part of the efforts to attract vessels to the eastern ports, the NPA commenced the dredging of Warri port at the cost of $44.861million (N16.150 billion).

    READ ALSO: Assessing Lagos ports’ performance is virus times

    The dredging has since been completed and vessels have started calling at the port. Aware of the perennial gridlock in Apapa as a result of increased activity at the Lagos port due to the closure of land borders by the Federal Government, the NPA partnered terminal operators to acquire multimillion dollars state-of-the-art Mobile Harbor Cranes (MHCs).

    Nigeria’s biggest container terminal operator, A. P Moller Terminal Apapa, in April took delivery of the cranes valued about $80million (N33.6billion), to boost its service delivery at the Apapa Port.

    The investment brings A.P. Moller’s total investment by the company in Apapa since 2006 to N184billion ($438million).

    In 2018, the NPA deployed equipment worth over $30 million in Onne Port, the Rivers State.The measure, Ms Bala-Usman said, was to boost efficiency, security and make the port attractive for business.

    Onne Port Complex, as one of the key ports under the NPA, also got several equipment to boost activity at the port.

    According to Farinto, NPA should urge the Federal Government to review import policies, especially the foreign exchange (forex) restriction on 41 items.

    He added that there was the need for other maritime agencies to develop regulatory and legal frameworks like NPA that will properly manage maritime resources and address the challenges facing the sector

    He urged collaboration with NPA to tap into the huge resources in this nation’s oceans to boost the its economic development and provide jobs for Nigerians.

    Lagos State Shippers Association Chairman, Mr Jonathan Nicol, also advised the Federal Government to address the high exchange rate to enable many firms to produce most of the items that we use locally. He said the companies to do this must attain at least 80 per cent installed capacity.