Category: Maritime

The Nigerian Ports Authority (NPA) has cancelled the agreement it signed with the Lagos Deep Offshore Logistics Base (LADOL) for concealing the actual amount it sublet part of its land to a third party. OLUWAKEMI DAUDA, who spoke to experts, writes that they urged President Muhammadu Buhari to direct the anti-graft agencies to investigate the actual amount collected by LADOL from Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) and the amount paid to NPA by the firm.

The actual amount the Lagos Deep Offshore Logistics Base (LADOL) collected from Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) and how the Nigerian Ports Authority (NPA) and other regulatory agencies would carry out their mandates without any hindrance from the service providers were the focus of experts and practitioners who spoke with The Nation at the weekend, over the revocation of the agreement NPA signed with LADOL.

LADOL Free Zone

LADOL free zone was leased to it by the Nigerian Ports Authority (NPA). It is a significant free zone in western Africa as it provides logistics, engineering and other support services to member companies of the free zone region.

LADOL free zone is short for Lagos Deep Offshore Logistic Base and is on an island in the Port of Apapa, Lagos.

Although it is deemed as a free zone, it is a privately owned logistics and engineering facility designed to provide support services such as logistics and supply chain to companies dealing in offshore oil and gas exploration and production in West Africa.

The ultimate aim of the formation of such a free zone is to provide an opportunity for the locals to increase their knowledge and help in the growth of the economy of the country.

Experts and stakeholders urged President Muhammadu Buhari and the Federal Executive Council (FEC) to support the efforts of NPA and other regulatory agencies in the maritime industry in sanitising the sector to boost the economy.

A senior official of the Federal Ministry of Transportation (FMoT), who spoke under the condition of anonymity underscored the importance of robust engagement between the regulators and the service providers to generate wealth and create value for the advancement of the economy and the welfare of the citizens

He said the Management of NPA revoked the agreement it signed with the LADOL, as part of efforts to to create new business models that will engineer the maritime market.

But a senior official of LADOL who does not want his name in print condemns NPA’s decision: He said the decision by NPA to revoke their agreement was illegal and wrong. He also described it as “unconstitutional and should be null and void.”

But the FMoT official described the LADOL Free Zone as holding vast untapped potential for growth and wealth creation if properly harnessed by the Federal Government through the NPA and other regulatory agencies.

“The Management of the Nigerian Ports Authority (NPA) revoked the land lease agreement signed with the Lagos Deep Offshore Logistics Base (LADOL) because LADOL shortchanged the Federal Government and also violated the terms of the land lease at Tarkwa Bay, near Light House Beach in Lagos.”

NPA, the senior official said, 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, the FMoT official said, was signed by NPA’s General Manager in charge of Land and Asset Administration, Mr. Yusuf Ahmed and reminded LADOL that “Clause 4.5 (a) of the agreement prohibits the lessee (LADOL) from subletting any part of the premises without written approval of the Lessor (NPA) and stipulates that any contravention ‘shall result in the automatic cancellation of this lease.”

“But investigation conducted by the ministry through the NPA has shown that LADOL executed a sublease dated September 13, 2013 with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria) without the required approval or recourse to the Lessor (NPA).

The November 14, 2019 and addressed by the NPA and sent  to the Managing Director of Messrs Global Resources Management Limited (GRML), the parent company of LADOL reads in part:

“Your actions in that regard led to the current impasse with resultant negative attention within and outside the country.

Consequently, the authority has reviewed the events and decided to exercise its rights under the lease and hereby revokes it with immediate effect.”

In justifying the action taken by the NPA, the he FNoT official alleged that LADOL also shortchanged the federal government by subleasing 11, 246 hectares of land out of the total 121 hectares leased to it at outrageous amount of money without recourse to NPA.

“Our investigation revealed that LADOL collected a whopping $45 million (N16.2billion) from Samsung Heavy Industries Nigeria Limited (SHIN) for the 11.246 hectares of land for which it paid only $524,105 (N37.73 million) to NPA.

“In a letter dated November 22, 2013, GRML applied to NPA to sublease the 11.246 hectares to MCI-SHI FZE for the “purpose of expanding facilities at LADOL Offshore Support Facility in readiness to handle the integration of the Egina FPSO onshore in Nigeria for the Nigerian National Petroleum Corporation (NNPC) and Total Upstream Nigeria.

“While the NPA obliged in March 12, 2014, the agency suspected foul play when GRML failed to furnish it with the sublease agreement between it and SHIN throughout the five-year tenor of the sublease, so as to conceal the actual amount it collected from SHIN.

“During a period of five years, LADOL through GRML, charged SHIN $9 million as rent per year for the portion of land which it was paying $104,821.95 annually to the NPA.

“Apart from profiting at the expense of the federal government by collecting outrageous amount from SHIN and paying far less to the NPA, documents also showed that LADOL, through GRML had also entered into another sublease agreement with an American company called Africoat Nigeria Limited, without any recourse to the NPA contrary to the provision of the lease agreement it had with NPA.

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“It was based on these infractions that made NPA to terminate the agreement with LADOL before leasing the 11.24 hectares to SHIN in a fresh agreement of $219, 230,700.00 per year to save SHIN’s fabrication and integration yard for which it borrowed $270 million to build.

“After allocating the 11.24 hectares to SHIN, 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 for five years with effect from November 14, last year,” he said.

LADOL, the FMoT official said, was required to pay N112,269,300 per annum for the developed land and N57,177,000 per annum for the undeveloped land, in addition to VAT of N8,472,315.

Provision of logistical, engineering and other support services:

The Vice President, Association of Nigerian Licensed Customs Agents (ANLCA) Dr Kayode Farinto said the main purpose of the LADOL Free Zone is the provision of logistical, engineering and other support services for deep water offshore oil and gas exploration.

“After the concession of our ports to the terminal operators, NPA remains the landlord and has its core responsibility to perform. Part of it is the monitoring of the agreement it has with various service providers and it has mandatory obligation to ensure compliance.

If those that are saddled with the responsibility of making our ports attractive and competitive are violating the agreement they had with with the federal government through the NPA, President Muhammadu Buhari needs to direct the anti-graft agencies to carry out their statutory responsibility and in this fresh case between the NPA and LADOL, the President needs to do so.

“As a designated Free Zone, LADOL offers its clients numerous benefits, including:

Exemptions from federal, state and local government taxes. Therefore, if the allegation of concealment of the amount collected by the firm from SHIN is established, the federal government must impose the necessary sanctions to serve as deterrent to others,” Farinto said.

Also, a maritime lawyer and a university don Dr Dipo Alaka gave kudos to the Ministry of Transpirtation and NPA for carrying out the preliminary investigation before the anti-graft agencies would be asked to do their duty.

“LADOL Free Zone was authorised by the Nigerian Export and Process Zones Authority and established pursuant to the Nigeria Export Processing Zones Act (Act No.63 1992).

The Free Zone scheme, Alaka said,, envisions flying the nation’s economy away from oil, fast-tracking her industrialisation, stimulating export-oriented business enterprises and manufacturing, strengthening strategic national economic policies, streamlining administrative approval processes as well as providing a one-stop-shop service for businesses both within and outside the country.

An expert in the oil and gas industry, Mr Folagbade Adeyemo said LADOL zone is one of the largest port in Nigeria and has been constructed to help the companies dealing in offshore logistics.

He urged the company to protect its investment by resolving the crisis it has with the NPA amicably.

“No matter how powerful you may be, you cannot win the government when it comes to the violation of a subsisting agreement.

We want to believe that LADOL violated the agreement inadvertently and it must look for a way to resolve it  amicably, because the anti-graft agencies may be asked to investigate the amount collected by LADOL from SHIN and the amount it paid to NPA,” Adeyemo said.

At the Nigerian Ship Registry Interactive forum in Lagos last week, the Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Dakuku Peterside, spoke on the ongoing reforms in the Registry. But stakeholders, who spoke on the sidelines of the event, identified policy somersault, involving periodic reversals of policies generally deemed to support the growth of the sector, as the major inhibition to the growth of the sector and economic development. In this report, OLUWAKEMI DAUDA examines the effects of policy somersault on the sector and the economy.

The importance of maritime, particularly the shipping industry in development, cannot be over-emphasised. The experience of developed economies with successful policies attests to the fact that efficiency and productivity is key to the competitiveness and growth of the sector and the economy.

Speaking on the sideline of the Nigerian Ship Registry Interactive Forum organised in Lagos, last week, by the Nigerian Maritime Administration and Safety Agency (NIMASA), stakeholders identified policy somersaults, involving periodic reversal of policies deemed to support the growth of the sector, as the major inhibition to development.

At the forum, NIMASA Director-General, Dr Dakuku Peterside, said the organisation began the drive to restructure the Registry by setting up a Committee on the Review of the operations of the Nigerian Ship Registration Office in February 2018. Parts of the terms of reference given to the committee, according to him, were to examine the status of the Ship Registry in line with international best standards and recommend improvements.

The committee, Peterside said, submitted its report last year with far-reaching recommendations grouped into short, medium and long-term measures.

“Immediately after, the Implementation Monitoring Committee was inaugurated on 20th August, last year, to chart a course for the implementation of the recommendations.

“Our goal, as a Maritime Safety Administration, is to create a world- class Ship Registry, which will be attractive to shipowners with the aim of maintaining the influence of Nigeria in evolving international commercial and regulatory environment for shipping.

“Nigeria operates a Closed Registry with about 2,725 active vessels of various capacities. In 2019,  the International Maritime Organisation (IMO) ranked the Nigerian Ship Registry number two in Africa after Liberia (which operates an Open Registry) and 46 in the whole world. Our desire is to have Nigerian flag vessels involved in international commercial trade and that is why we are making every effort to build capacity and ensure that Nigerians acquire high-capacity vessels that will not only be involved in the lifting of our hydrocarbons but carry our cargos to other parts of the world.

“As you are all well aware, Nigeria operate a closed ship registry; however, most renowned ship registries in the world such as the UK Ship Register, today maintain a Second or International Register to attract tonnage while using the Closed Register to develop indigenous capacity and for domestic trade similar to our Cabotage regime.

“We are, therefore, considering establishing a second or international register to help grow our fleet and input our footprints in international commercial trade,’’ he said.

Between 2018 and last year, findings revealed that NIMASA attracted into its Register two high-index capacity vessels – Egina FPSO and MT Ultimate and there is no doubt that a lot more can be done by the agency to assist Nigerians in acquiring vessels and that is why it is making effort to disburse the Cabotage Vessels Finance Fund (CVFF) and partner the Nigerian Content Development and Monitoring Board (NCDMB) to drive capacity in the industry.

But a maritime lawyer and university don at the event agreed that policies were critical elements in determining the rate of growth, the levels of private investment and the magnitude of credit to the private sector. He urged NIMASA not to relent on its laudable efforts.

“Beside, NIMASA needs to create the rules and frameworks in which maritime traders are able to compete against each other. But it is sad that from time to time, the Federal Government has been changing these rules and frameworks, forcing maritime operators to change the way they operate, with unsavoury consequences to the economy.

“There are critical constraints in our country that impede the development of the non-oil sector. Some of the critical issues, which were also identified by the World Bank were inconsistency in government policies and competitiveness of our ports.

Alaka, therefore, called for urgent implementation of policies that would boost maritime/shipping development.

Other stakeholders also expressed worries that the various policies and reforms being adopted by the government in the last few years had not impacted the sector in terms of growth and development.

A senior official at one of the terminals at the Lagos port, who craved anonymity, said challenges facing the sector had continued to increase, owing mainly to poor policy implementation arising from the lack of political will to make them work.

The official complained about the inability of the Federal Government to ensure that many Nigerians were involved in lifting of its crude oil.

According to him, despite the Cabotage Law and the consistent efforts by NIMASA, the big maritime trade has, for several years, been dominated by foreign-owned shipping firms without a plan by the government to correct the anomaly.

Maritime trade

With a coastline of 852 kilometres bordering the Atlantic Ocean in the Gulf of Guinea and a maritime area of over 46,000 km2, Nigeria is, no doubt, a maritime destination.

Statistics have shown that a total freight cost of between $5 billion and $6 billion is estimated to be generated on export and import businesses yearly, while the maritime component of the oil and gas industry is worth an estimated $8 billion alongside sea-borne transportation, oceanic extractive resource exploitation and export processing zones.

But, inadvertently, the big maritime trade has, for several years, been dominated by foreign-owned shipping firms. As a result, the Federal Government in 2003 came up with the Coastal and Inland Shipping (Cabotage) Act, aimed at growing shipping through effective participation of indigenous vessels in the business.

The act restricted the use of foreign vessels in domestic coastal trade to grow indigenous tonnage. It also made provisions for securing jobs for qualified and upcoming Nigerian cadets being trained in various maritime institutions of the world.

Many years after, the act is yet to achieve its aim as many Nigerians still lack the capacity to acquire quality vessels to participate in coastal trade and foreign vessels still depend heavily on foreign seafarers for manning.

This is traceable to lack of affordable funding for vessel acquisition, owing to the inability of the Nigerian banking industry to develop a framework for financing ship acquisition, which has a long gestation period.

As a result, credit facilities received from banks by indigenous ship owners to fund vessel acquisition, usually come with interest rates that are in double digits, sometimes over 20 per cent. This makes it near-difficult for indigenous shipping firms to compete with their counterparts that operate with offshore loans of single-digit interest rates.

To bridge the gap created by insufficient vessel supply for shipping- related business, the Act further created certain clauses to accommodate granting of waivers of various categories to foreign-owned vessels in the event that Nigerians fail to produce the needed vessels or qualified manpower to man Cabotage vessels, own ship yards to build Cabotage vessels and acquire the specific vessels required for a particular Cabotage trade.

It is estimated that maritime industry can generate close to N7 trillion yearly because developing shipping comes with spin-off effects on other industries such as insurance, steel for the use of ship building and ship repair yards.

Unfortunately, over 80 per cent of Nigerian sea-borne cargoes are carried by foreign-flagged and registered vessels today because of the inconsistency in government policies over the years.

Efforts by NIMASA

Following the concerns, NIMASA recently rolled out plans to put an end to granting waivers to foreign-owned, manned, built and flagged vessels.

The new strategies are to address issues around growing capacity in ship building by encouraging the establishment of shipyards; creating affordable credit facilities to enable Nigerians acquire vessels; creating tax incentives for importing built vessels by Nigerians and building of qualified seafarers.

Peterside said the agency was  engaging with the Federal Ministry of Finance and the Nigeria Customs Service (NCS) to create a special tax incentive for Nigerians bringing vessels into the country.

The plan would involve creating special incentives that can enable shipbuilding yards to bring in components for building vessels in-country, adding that the government is also determined to ensure that Ajaokuta Steel Mill and Aluminum Steel Company in Akwa Ibom State, come on stream to provide the needed raw materials for ship building yards.

“The current tax regime makes it impossible for Nigerian ship owners to compete with their foreign counterparts. For instance, foreigners bring in vessels for a short period and they have a special tax regime that enables them pay little to nothing for their vessels and crew to work and live in Nigeria, whereas a Nigerian is charged a full range of all tax applicable (14 per cent), making it near impossible for their vessels to compete,” Peterside explained.

He said NIMASA was determined to ensure that, in the next few years, certain categories of vessels (yet to be listed) are built in-country. This, he said, will end issues around bringing in various vessels  with its attendant capital flight and job losses on the economy.

“NIMASA is engaging with the office of the Vice President on the possibility of creating incentives for shipyards. We believe it will encourage a lot of entrepreneurs to invest in shipbuilding. We are also working in partnership with the Nigerian Content Development Monitoring Board (NCMB) and have commissioned an audit of all shipyards in order to identify the level of support that will help revive them,” he said.

Ships cannot exist without cargoes to lift. Therefore, NIMASA is also working towards ensuring that ship owners have cargo support.

Stakeholders’ view

Stakeholders have commended the efforts of the NIMASA in addressing the shortcomings in shipping, especially in creating jobs for ship owners and seafarers.

Specifically, the Vice President, Association Nigerian Licensed Customs Agents by (ANLCA), Dr Kayode Farinto, applauded NIMASA for opening the Ship Registry and its plan to disburse the CVFF fund to boost the shipping sector.

“We are happy that NIMASA is set to help the ship owners with the CVFF fund and to find a single-digit interest rate to help raise money for the industry.’’

Conclusion

The stakeholders and the operators at the forum praised NIMASA for being on the right track to save jobs and create wealth for Nigerians and the economy at large. Therefore, they said, efforts should be doubled on consolidating on the laudable plans by the agency to ensure that milestones are achieved by it before the year comes to an end.

By Muyiwa Lucas

Nigerian Customs Service (NCS) Comptroller-General Hameed Ali (rtd) has urged officers and men of the Service to comply with  the rules guiding the NCS.

Ali, who spoke to officers and men of the Murtala Muhammed International Airport (MMIA) Command, Ikeja, Lagos, after inaugurating the Customs Processing Centre (CPC), advised the workers to step up the volume of seizures.

Read Also: How we aborted smuggling of $8.6m, by Customs boss

“In the last three to four years that I have been with you, we have tried to reorientate everybody and accommodated ourselves by constant engagement. But now, I want to tell you that the era of Mr. Nice is over. Henceforth, I want to be getting the names of officers who are revenue risks. Officers interested in building a career and earning a living to take care of their family can be assured that the Service is the best place for them to be, but those interested in earning an income outside their salary should leave the Service. If I catch anyone involved in corruption, then you are finished; otherwise you have nothing to fear,” Ali warned.

After previous inclusive attempts, the Senate is pushing to upgrade the Maritime Academy of Nigeria, Oron (MAN) in Akwa Ibom State to a university. MAN, formerly the Nautical College of Nigeria, was established in 1979 to train shipboard officers, ratings and shore-based management personnel. Upgrading the institution to a degree-awarding stage will enable it to stand tall among others on the global comity of institutions in its category, MUYIWA LUCAS reports.

Fresh bid to upgrade the Maritime Academy of Nigeria (MAN), Oron, Akwa Ibom State to Maritime University has resurfaced at the National Assembly.

In a bill presented on the floor of the Red Chamber by Senator Akon Eyakenyi, titled: “Bill for an Act to Repeal the Maritime Academy of Nigeria, Oron Act and to Establish the University of Maritime Studies, Oron and other Related Matters”, the senator, who represents Eket Senatorial District of Akwa Ibom State, noted that the Bill was read for the first time in the hallowed chamber on December 12.

In a well-accentuated presentation, Eyankenyi noted that MAN is the foremost maritime institution in Nigeria and has graduated about 5,000 merchant navy officers, ratings and others for shipboard and shore-based operations.

She further noted that the institution remains the only one in the country with the mandate and capacity/facilities to award certificate of competency to seafarers.

Sadly, she observed, the drawback of the academy has been that it was designed to produce technicians or low-level personnel, who were the country’s need in 1977 when it was established.

However, Eyakenyi submitted that as a developing country, there is a need for more than technicians to manage the sector. This need, she emphasised, makes the upgrade of the institution imperative.

”It is quite unfortunate that Nigeria first mooted the idea of upgrading its maritime institution into degree-awarding but others that started later have long executed it by upgrading their maritime colleges/polytechnics into universities/degree-awarding institutions, whereas we are still in the contemplation stage.

‘’In 1995, the then Head of State General Sani Abacha on a visit to the school, emphasised the need to upgrade the academy to a degree- awarding institution. In 2008, the then Minister of State for Transport, like his predecessor, harped on the need to upgrade the academy into a degree-awarding institution.

“His successor, Alhaji Yusuf Suleiman, who secured the Federal Executive Council’s (FEC) approval for the upgrade of the academy, had noted that the primary purpose was to put the graduates of the academy at par with their contemporaries,” she said.

Eyakenyi further said it was in line with the plan to transform the academy into a university that the Federal Government took steps to secure and formalise its funding. The National Assembly, in passing the Nigerian Maritime Administration and Safety Agency (NIMASA) Act, 2007, Eyankenyi explained, made provision for statutory allocation for the funding of the academy. This Bill seeks to maintain the full-funding as captured in the NIMASA ACT, 2007.

‘’Similarly, in 2013, following the International Maritime Organisation’s (IMO) approval for the upgrade of the institution, N2 billion was approved by the Federal Government to the academy to upgrade its facilities in preparation for the upgrade to university in 2013.’’

She also said two years later, the Federal Government issued an executive order for the upgrade into a university.

“It is also important to note that, the Eighth Senate had passed this same Bill; however, other processes were not concluded for assent of Mr. President before the winding up of the Eighth Assembly.”

Act now

Eyakenyi’s presentation is a timely intervention needed to further boost the feat already being recorded at least, in the last three years by the institution. Before this time students seeking proper training had to attend the Regional Maritime University in Accra, Ghana. For instance, Captain Thomas Kemewerighe, a graduate of the academy, said Nigeria does not have people qualified to provide proper training. He said most of the graduates ended up as okada riders.

Still, in September 2009, the government announced that a project launched by the Federal Ministry of Transport, the Nigerian Seafarers Development Programme, would send a first batch of 27 students to the Academy of Maritime Education and Training in India to study for Bachelor in Science and Bachelor in engineering in marine-related subjects. Sadly, products from MAN were not considered for this programme by the Indian institution.

Changing fortunes

Stakeholders in the industry have since said the fortunes of the institution, which have been on the rise in the last three years, needs to be sustained. They maintained that the appointment of Commodore Emmanuel Effedua, a retired Naval officer, as rector of the institution, has seen better values and fortunes smiling on MAN Oron.

For instance, before now, stakeholders maintained that the academy had suffered fallen academic standard with competent lecturers seeking jobs with oil companies and other government agencies. Now, efforts were said to be in top gear to increase the academy’s training curriculum in line with Manilla Convention (Standards of Training, Certification and Watch keeping, STCW).

There was also the issue of over bloated cadet enrolment that stretched the training of manpower and facilities beyond their limits. This led to fast infrastructural decay with little or no attention paid to maintenance.

Deplorable hostel facilities with crowded rooms not good for students’ habitation were part of the inherited order begging for intervention and change. About 18 students stayed in rooms meant for four. Today, hostels and better accommodation are available for students to occupy.

Indeed, a great deal of infrastructural improvement, human capital overhaul, improved teaching and learning backed with technological aids and unprecedented degree of discipline pervades the institution.What looked like a makeshift library being used with outdated literature has been rebuilt with up-to-date reading materials in addition to high quality free books given to cadets.

A modern lecturers briefing room and state-of-the-art lecture theatres fitted with teaching and learning aids have been put in place. Transportation and power system within the academy have also been boosted. The academy acquired one unit of 650KVA generator and two units of 250 KVA generator. These are, in addition, to solar lightings provided to illuminate the academy at night.

These efforts, Effedua said in an earlier interview with The Nation, were pointers to the readiness of MAN Oron to produce  ICT-savvy, studious and up-to-standard graduates to meet industry demands and international standards.”

He said: “There is a deliberate emphasis on quality of students above quantity. This is why cadet intake that used to be 1,800 was reduced to 256 for the 2018/2019 academic session.Cadets are enjoying free mandatory courses with newly introduced Onboard Seatime training for National Diploma cadets. Also, under this dispensation, cadets are insured and nautical science students are being enrolled as members of Nautical Institute, United Kingdom while marine engineering students are also members of Institute of Marine Engineering, Science and Technology (IMAREST), also of UK. The enrolment is a further boost to their professional certification.”

The Gains

Eyakenyi said the essence of the Bill is to create specialised institutions for specialised field of studies. According to her, with Nigeria as the economic hub of Africa, there is the need to have indigenous and better trained personnel to manage its maritime sector. The upgrade of the academy into a university, she maintained, would go a long way in solving the acute shortage of well-trained manpower in the maritime industry, which is quite worrisome.

“In 2018, stakeholders in the maritime sector declared that shortage of manpower in maritime specialties was a threat to maritime sector, this was contained in a communiqué titled “Urgent Call to Rethink Maritime Education and Training” issued in July, 2018. Year in year out millions of dollars are spent on training our nationals abroad; having University of Maritime studies would put a stop to such wastages of scarce resources. In line with our current developmental needs as a country, we need to upgrade the Maritime Academy to University status so as to accommodate more intake of students, more courses of studies and better training,” Eyakenyi said, adding that Nigeria is amongst countries without a functional maritime university or a university that offers maritime courses; while other countries, such as the United Kingdom, have over 10, USA – 10, South Africa – 3, Singapore -2, Philippines  -14 and Australia 2, among others.

The Eighth Senate had passed the bill to upgrade the academy into a university. But it was not concured by the House of Representatives. Also, it was not agreed if the academy should be a degree-awarding or a full-fledged maritime university.

The huge number of overtime cargoes at the Lagos ports has become worrisome because of its ripple effect on port operations. Stakeholders in the industry have called on President Muhammadu Buhari and the Federal Executive Council (FEC) to order the Comptroller-General, Nigeria Customs Service (NCS), Col Hameed Ali (rtd), to auction the goods and thereby free up the Lagos ports. Oluwakemi Dauda reports

Over 2500 overtime cargoes are dumped at the various terminals at the Apapa Port Complex (LPC) and the Tin Can Island port in Lagos State.

Stakeholders have called for measures to address the issue.

Investigation revealed that the efficiency of the two ports is being threatened by the overtime goods. At APM Terminal in Apapa, there are over 1,100 overtime containers.  The situation is not diffrent at Apapa and Tin Can Island port.

Cargoes are classified as overtime when they have stayed at the ports for more than 30 days without clearance and delivery.

Stakeholders, who spoke with The Nation at the weekend, appealed to President muhammadu Buhari and FEC to direct the Nigeria Customs Service to auction the cargoes as provided in the Customs and Excise Management Act (CEMA).

An exporter Mr Gbolahan Ajetunmobi, said: “The Customs Service is empowered by law to auction overtime cargoes to free up the space in the port and recover government revenue. Not auctioning those cargoes that have been in the port for more than a year does not serve the best interest of the people, government and of the operator.

I appeal to President Buhari to direct the Nigeria Customs Service to free up the space in the port by auctioning those overtime cargoes to bring efficiency to our port. Over N30 billion goods are rotting away at the port and the Federal Government is not doing anything about it.”

The National Vice President, Association of Nigerian Licensed Overtime Agents (ANLCA), Dr Kayode Farinto, confirmed that over 2000 cargo-laden containers worth billions of naira have been abandoned by some importers.

Findings revealed that overtime cargoes occupy over 30 per cent of the terminals in Lagos.

“Containers with very valuable items are not claimed for almost two years. This, to say the least, is very disappointing. This, to some extent, is irresponsibility on the  part of those who are supposed to do the needful.

“The Federal Executive Council must ensure that the Act that established the Nigeria Customs Service (NCS), which has also prescribed a procedure for disposal of overtime goods and seized cargoes, is  complied with. The only way to dispose the overtime cargoes is captured in the Act.

“Whatever that is defined in the Act is what should be done. It is the responsibility of the government to ensure that our ports are free of overtime cargoes and empty containers. We are talking of how to boost the economy and multi-billion naira goods are rotting.’’

Overtime cargoes

Before the ports were concessioned about 15 years ago, the issue of overtime cargo was rife. The NCS has the power to auction any cargo, which spends over 90 days at the ports without being cleared.

Before the concession, such cargoes could be found at any port and they stayed until the owners were ready to clear them. The demurrage was small then, and the owners could afford to play with time. Some importers falsified the date the goods arrived at the ports to reduce the demurrage.

But this changed when the terminal operators took over the ports. Any importer who delays in clearing his goods pays heavy demurrage. In some cases, some terminals have been accused of causing delays to create more room for the cargoes to stay at the ports and attract demurrage. But agencies-owned containers could be granted waiver on the intervention of the government.

A senior Customs officer who craved anonymity said the failure to clear them after a year might be as a result of bureaucratic bottlenecks in government departments. ‘’Some importers may have lost interest in clearing them because of the cost involved.

Sometimes, an importer may decide to forget some goods if the clearance will lead to more losses. This is when some trade goods enter overtime and accumulate more demurrage that clearing them will be expensive. The worth of overtime cargoes in the ports within and outside the Lagos ports is over N30billion.

“There is no doubt that the importers, particularly those who own the goods that are under prohibition list, may no longer be interested in the goods apparently because there is no way they can move them out of the port because of the eagle eyes of security officials at the ports.

“Also, there are some goods that have lost their value as a result of time. Although it is the duty of Customs to auction goods, the experience has been that only items that are valuable were sold off as quickly as possible to some highly placed Nigerians in the past.

“This does not appear to have been the same trend since the tenure of Col. Hameed Ali (rtd) as a Customs boss. And the reasons are obvious.

A highly placed source said Ali cannot carry out auction sales because he would need the approval of the Minister of Finance and that is why the President and the FEC must give an instruction to the ministers of Transport and Finance to ensure that the overtime cargoes are auction in no time.’

Why importers abandoned cargoes

Investigation show that many importers abandon their containers for various reasons. An importer, for example, may run out of funds to clear his goods. This often leads to more demurrage. Some cheat the government on any consignment.

In the process, they lose the goods as they are not able to settle the issue within the time allowed to clear the goods. Paying the amount on the Debit Note and the demurrage on the goods could be difficult. Some importers resort to bribing to buy the same goods at auction from the Customs.

It does not appear that such arrangement exists under the change mantra of the leadership of the Customs. Some importers even bring in prohibited goods, which are seized and left to rot at the ports.

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NPA sources said there is hardly any port where there is no overtime cargo because of the unwholesome attitudes of importers.

Way out

Worried by the huge overtime cargoes, stakeholders said it was time for the Ministry of Finance to  act.

A clearing agent, Mr Segun Ogunsanu, said the government should take stock of such items  and empower the Service to auction them.

Ogunsanu said this would help decongest the areas where the goods were kept.

Another freight forwarder, Mr Sunday Albert, advised importers to shun any fraudulent practice that is responsible for seizure of goods at the ports.

He added that importers should be on top of any situation when their goods arrive to ensure that they are cleared on time before entering demurrage and overtime status.

The Chairman, Seaport Terminal Operators Association of Nigeria, (STOAN), Princess Vicky Haastrup, called on the government to intervene on the matter, saying if the issue was not tackled on time, terminal operators would be running their business at a loss.

Haastrup said because there were  many laden containers at the terminals, the space for empty containers had be taken over. He explained that terminal operators make more money when they have more space for containers.

She stated: “Let the Nigeria Customs Service auction these overtime cargoes because they occupy commercial spaces at our terminals.

If that is taken care of, we can dedicate a large space for empty containers. Right now, because our members have so many laden containers, there is a limit to the number of empty containers they can take.”

Also the President, National Council of Managing Director of Licenced Customs Agents (NCMDLCA), Lucky Amiwero, said that there was need to ensure that overtime cargoes were transferred from the ports to government warehouses to decongest the terminals and bring efficiency to the port.

Ahead of its report, a delegation of the International Monetary Fund (IMF), on a visit to the Lagos Ports, restated the challenges affecting the growth of the maritime industry. The visit, which forms part of the body’s yearly checkup to determine the performance and challenges in its yearly Economic Outlook Review,  afforded a firsthand contact by the IMF with reality at the ports, MUYIWA LUCAS writes. 

When will the good days of the ports return? This was the question on the lips of stakeholders who joined the International Monetary Fund (IMF) delegation to tour the Lagos ports at the weekend.

The team, led by the IMF Mission Chief and Senior Resident, Representative for Nigeria African Department, Amine Mati, was on a tour to get materials for the publication of the IMF Economic Outlook Review.

The team will cover the three ports: APM Terminals, Greenview Development Terminal (GDNL) and Port Terminal Multiservices Limited (PTML).

The team lamented the absence of the National Single Window, scanners, poor logistics and the parlous state of access roads , saying they are major constraints to the development of the ports.

Mati, who explained why the delegation came to inspect the ports, sought speedy resolution of the problems.

“Port congestion and the clearance time still remain challenging. We are trying to determine the different policies and priorities put in place, particularly the scanners, national single window, which is very important to accelerate the process.

The roads outside the port is also important for efficiency increase. As trade is picking up, the port is an important aspect of  the economy, particularly in Lagos where the activity is,” Mati said.

The host of the delegation, the Executive Secretary of the Nigerian Shippers Council (NSC), Hassan Bello, described the IMF Economic Outlook review as “very important to Nigeria, especially now that the country is facing challenges for diversification of source of revenue”.

Bello described the ports as major in the North and Central African sub-region and the largest economy in Africa. He said the ports attracts between 40 and 60 percent of all the cargoes in the sub- region.

However, he expressed dismay that over 12 years after the ports were concessioned to private operators, there was still lack of efficiency.

The NSC, he assured, is working with the shipping firms to reduce the cost to about 30 percent and that both parties would soon go into an agreement.

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He said for now, there is 100 per cent physical cargo examination due to lack of scanners. He however assured that by second quarter of the year, these challenges would be addressed.

“We are trying to build, first of all, a port community system so that we will have operational synergy and then, of course, the National Single Window, which is the simplification of all processes. We need to be transparent. We have to reduce the corruption and  automate the ports for faster clearance of cargoes.

“What we are doing is about  20-day cargo dwell time. We want to reduce it to seven. The ship turnaround time also is 4.1. We want to reduce it further. We want to attract more cargoes here, not only for imports, but also for exports and that is the whole issue.

“As we move to the ports, you will see that we lack efficiency at the ports. The ports are private sector driven, having been concessioned about 12 years back to the private sector, because we believe that the private sector should lead. However, there are logistics problems, one of which is infrastructure.

“The roads in and out of the port is a challenge and the government is working – constructing all the roads leading to the ports.

Besides, the government is also going to introduce rail services into the ports, because the problems have been that we are using one mode of transportation. The ports have been stretched beyond their capacity.”

“They are handling more cargoes than their intended capacity, so we have short-term, medium and long-term solutions for the ports,” Bello said.